WASHINGTON (DTN)--Tyson Foods, Inc. announced Dec. 5 that it will be closing two poultry operations and has entered into negotiations for the possible sale of a third facility as part of its on-going plant rationalization efforts, according to a PRNewswire release.

The poultry operations to be closed are located in Stilwell, OK, and Jacksonville, FL. The Stilwell poultry operation employs approximately 400 people and currently produces de-boned leg meat targeted primarily to international markets. The Jacksonville poultry operation employs approximately 550 people and includes a hatchery, feed mill, live production and processing facility. The live production operation has capacity for 650,000 broilers a week from 89 contract farms and five company-owned farms. Some operations may be curtailed immediately, but all team members will be paid in accordance with the 60-day period required under federal law.

The poultry operation being considered for sale is located in Berlin, MD. This operation includes a hatchery, feed mill, live production and processing facility. The operation employs approximately 650 people and processes 1 million chickens per week. Allen Family Foods, Inc., a Delaware based company, will begin the due diligence process necessary to purchase the facility.

"The closure of Stilwell and Jacksonville along with the anticipated sale of Berlin will reduce our production by over 1.5 million birds per week and in no way will affect our ability to serve our customers," said Tyson Chairman and Chief Executive Officer, John Tyson.

Opportunities will be given for employees to transfer to other Tyson locations. Contract growers in Jacksonville will receive payment pursuant to the terms of their contracts and offered an additional settlement payment.

The company expects to take pre-tax charges to earnings of $60 to $70 million, or $.11 to $.13 per share, in its first quarter of fiscal 2003 ending Dec. 28, 2002 related to these activities.

The company also announced it will be eliminating approximately 560 general and administrative and shared services positions in its operations across 29 states over the next two years as part of continuing integration efforts identified by team members. Many of these positions will be eliminated as a result of normal attrition and turnover.

In addition, the company announced revised earnings guidance for the first quarter of $.14 to $.18 excluding those charges noted above, as well as revised guidance for the full fiscal year of $1.00 to $1.10, excluding those same charges.

"Market conditions continue to be challenging going into the holidays, especially in beef processing," Tyson said. "In addition, the winding down of our live swine group is taking longer than expected, and is continuing to generate losses. We continue to expect improved markets in the last two quarters of our fiscal year. We also expect the changes we've announced today to have a positive impact on our future operating performance as we continue to streamline and improve our businesses."

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