According to unnamed sources cited by Reuters, Tyson Foods, the US-headquartered meat giant, is planning to sell its China poultry business. The company has hired investment bank Goldman Sachs to advise on the potential sale and has sent preliminary information to potential buyers, including private-equity firms.
At an early stage, Tyson Foods’ China poultry business is reported to generate annual sales of about $1.1bn, as per one of the sources. However, in its 2022 annual report, the company did not quantify sales in China. When approached for comment, Tyson Foods declined to respond.
Last week, Tyson Foods announced the closure of four domestic poultry plants due to a decline in revenue and profits in the third quarter. The company’s CEO, Donnie King, mentioned that they are evaluating their assets and considering further plant closures as part of their automation and modernization efforts.
Tyson Foods entered China in 2001 and currently has its headquarters in Shanghai. The company recently inaugurated its Nantong Smart Factory in Jiangsu province, which serves the retail and foodservice channels in China. In addition, Tyson Foods has three R&D centers, four large industrial chain base layouts, and dozens of breeding farms in China.
In the financial year 2022, Tyson Foods witnessed a 13% rise in group sales of beef, chicken, and pork. Chicken sales specifically increased by 23.3% to $16.9bn. However, in the third quarter, chicken sales dropped by 4.5% to $4.2bn. Despite this decline, year-to-date chicken sales amounted to $12.9bn, showing a 4.9% increase.
Another major meat processor, Brazil’s JBS, also reported falling sales in its second-quarter results, resulting in a net loss.
