Tyson Foods, Inc. TSN is on track to strengthen its overseas presence, serve foodservice and widen its retail business with innovative products. The company took another step in this respect when it unveiled plans to construct new manufacturing facilities in China and Thailand. Along with this, the company plans to expand its production unit located in the Netherlands. The envisioned expansions will add more than 100,000 metric tons of fully-cooked poultry capacity.
Management believes that global population and income growth will continue to drive the demand for protein. Markedly, such investment plans help the company enhance its in-country operations as well as export capabilities worldwide.
Moreover, the newly-announced expansion plan is likely to generate numerous direct and indirect jobs. Notably, the new facility located in China is anticipated to create more than 700 jobs, while expansion in Europe will add more than 150 jobs. Further, the new plant in Thailand is a part of a long-lasting joint venture with GFPT Public Company Limited. This plant is likely to generate over 1,000 jobs. The company’s new expansion plans bode well with its aim to become the leader in protein category by serving emerging markets and strategic consumers.
Growth Efforts on Track
Recently, Tyson Foods announced the expansion of Raised & Rooted— a plant-based protein brand— in Europe. The European Raised & Rooted range that will offer five types of plant-based products will be launched via foodservice customers across Europe. Management believes that its capabilities in R&D and innovation coupled with international footprint and infrastructure places it well to be a market leader in alternative protein category in Europe. Moreover, management expects to leverage its deep capabilities to make plant-based protein more readily available at affordable prices worldwide.
Also, the company launched the Tyson brand across key markets like European foodservice and in Thailand retail via e-commerce. In an attempt to meet consumers’ demand amid the coronavirus outbreak, Tyson Foods augmented its online platforms in Malaysia and Australia.
Apart from these, Tyson Foods’ recent buyouts and joint ventures have helped in bolstering its international presence. This gives the company access to demand via in-country production and exports to several overseas markets. Including U.S export revenues, Tyson Foods generated international sales of $5.4 billion in fiscal 2019.
Notably, the Zacks Rank #2 (Buy) company’s exports to several parts of the world performed well in the third quarter of fiscal 2020. During the quarter, the company witnessed major strength in exports to Japan and Mexico. The company noted that lower hog supplies stemming from African swine fever present solid opportunities for U.S. exports as well as in-country production to cater to international demand. Also, a major part of the company’s export sales includes items, which don’t fit in traditional Americans’ diet. Thus, exports help the company undertake optimum livestock utilization.
Shares of Tyson Foods have gained 0.6% in the past six months compared with the industry’s growth of 1.1%.
More Solid Food Bets
United Natural Foods UNFI, with a Zacks Rank #1 (Strong Buy), has a trailing four-quarter earnings surprise of 4.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Blue Apron Holdings APRN, with a Zacks Rank #2, has a trailing four-quarter earnings surprise of 30.3%, on average.
Pilgrim’s Pride PPC, with a Zacks Rank #2, has a long-term earnings growth rate of 2.6%.
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