Tyson Consolidates Beef Plants to Operate Fresh Meats Business More Efficiently

18/08/06 Tyson Foods, Inc. is consolidating its beef plants in the Pacific Northwest as part of a comprehensive plan to operate its fresh meats business more efficiently, the company announced today.

Effective October 16, 2006, Tyson Fresh Meats, Inc., a subsidiary of Tyson Foods, will permanently close its beef slaughter plant in Boise, Idaho, and scale back processing operations at its Pasco, Washington, complex. The Pasco plant has historically operated one shift of beef slaughter and two shifts of beef processing. After October 16, 2006, Pasco will continue to operate one slaughter shift; however, because the plant will no longer be receiving beef carcasses from Boise, it will operate only one processing shift instead of two.

"This consolidation is part of a much broader strategy designed to return Tyson Foods to profitability, while positioning our business for long-term success by ensuring our operations are cost-effective," said Richard L. Bond, president and CEO of Tyson Foods. "In addition to cost savings, we also remain focused on creating product demand, improving product mix and achieving maximum price for the high quality foods we produce."

The changes involving Boise and Pasco are also part of an initiative aimed at improving the performance of Tyson's beef and pork business. As a result of this initiative, Tyson consolidated beef plants in northeast Nebraska earlier this year, continues to improve production line and staffing efficiency at other plants and has been simplifying and streamlining its beef and pork product mix.

"The Boise plant has performed reasonably well for many years, however, market and economic conditions have changed," said Jim Lochner, Tyson senior group vice president. "There's more beef slaughter capacity than available cattle, while the cost of transporting beef carcasses from Boise to Pasco for processing has increased significantly.

The closing of the Boise plant means the elimination of beef slaughter capacity of 1,600 cattle per day or approximately 470,000 cattle a year. It also results in the elimination of all 270 jobs at Boise and approximately 500 positions at Pasco. This will reduce the total workforce at Pasco to about 1,200 Team Members.

"While it's always difficult to eliminate operations and jobs, we believe it makes economic sense to take these steps," Lochner said.

"These steps are expected to result in a more efficient use of Pasco's production capacity because more cattle should be available for slaughter at the facility." Tyson will continue to buy cattle in the Boise region for slaughter at Pasco. Company officials expect the closing of the Boise plant to increase Pasco's beef slaughter capacity utilization by four to five percent.

Affected Boise and Pasco Team Members will be encouraged to apply for openings at other Tyson locations. The company will offer cash relocation incentives to workers willing to move to select Tyson plants in the Midwest. In addition, the company will work cooperatively with state workforce development officials who will provide employment assistance.

Much of the production equipment and cooling components will be removed from the Boise plant for use at other Tyson facilities. Company officials expect to explore the sale of the property, which includes approximately 1,500 acres, for possible use by real estate developers. Due to the estimated fair market value of the Boise property the company does not anticipate incurring any charges as a result of the Boise closure.

The Boise plant has been part of Tyson Foods since September 2001, when the company acquired IBP, inc. IBP had owned the plant since 1976.

In addition to Pasco, Tyson operates domestic beef plants in Denison, Iowa; Joslin, Illinois; Emporia and Finney County, Kansas; Dakota City and Lexington, Nebraska; and Amarillo, Texas. The company also owns Lakeside Packers, a beef complex in Brooks, Alberta.