Tyson Foods' (TSN) New Tennessee Facility to Bolster Capacity
Tyson Foods, Inc. TSN is on track to strengthen its overseas presence to meet consumers’ rising demand. Progressing along these lines, the company opened a new poultry complex in Humboldt, TN. The complex, worth $425 million, consists of a processing plant, feed mill and hatchery. The project, situated in the Gibson County Industrial Park, will manufacture pre-packaged trays of fresh chicken for national retail grocery stores.
The company has already hired hundreds of workers to prepare them to begin production by the end of April. This 370,000 square foot processing plant is likely to provide jobs to more than 1,500 people by 2023. Well, the payroll and payments to farmers from the newly-opened facility coupled with purchase of grain and utilities is anticipated to contribute worth $150 million to Tennessee annually. Incidentally, this marks Tyson Foods’ biggest investment in Tennessee so far. In August 2017, the company had unveiled $84 million worth expansion across Union City operations in Tennessee. Currently, Tyson Foods runs five product plants that employ nearly 5,000 people in the state.
Other Growth Efforts
Tyson Foods has been strengthening the production of consumer-ready products. Recently, the company unveiled that it is solidifying its case-ready meats business by reusing its plant capacity in South Carolina. Incidentally, Tyson Foods intends to open an idle Tyson-owned facility in Columbia and transform it into a meat-cutting facility. This facility will make retail ready, portioned packs of sliced pork and fresh beef along with ground beef for grocery and club stores in the eastern parts of the United States. Management stated that this facility, with its premium quality, pre-cut, pre-packaged fresh beef and pork, is likely to help the company cater to the burgeoning demand from its retail customers.
In November 2020, Tyson Foods unveiled plans to construct new manufacturing facilities in China and Thailand. The company laid out plans to expand its production unit located in the Netherlands. These envisioned expansions are expected to 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.
Wrapping Up
Tyson Foods has been gaining on rising demand in its retail channel, thanks to increased at-home consumption amid the pandemic. In first-quarter fiscal 2021, the company’s retail core business lines saw share growth for the 10th consecutive time. Apart from this, Tyson Foods is benefiting from its brand strength, robust geographical reach and the ability to manufacture locally in its international markets and cater well to the evolving global demand.
Clearly, the newly-opened poultry complex in Humboldt will help Tyson Foods bolster its international presence and keep its growth story going. Notably, shares of this Zacks Rank #3 (Hold) company have gained 25.3% in a year compared with the industry’s growth of 18.4%.
Some Solid Food Stocks
The Hain Celestial HAIN, currently carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 26.7%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
United Natural Foods, Inc. UNFI, currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 13.6%, on average.
The J. M. Smucker Company SJM, currently carrying a Zacks Rank #2, has a long-term earnings growth rate of 1.7%.
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