Tyson to Increase Capacity Poultry, Seafood Businesses

Down Jones News Service

SCOTTSDALE, Ariz. _ Tyson Foods Inc. expects double-digit sales growth as it aggressively expands its chicken-production capacity and acquires more poultry and seafood businesses.

With the outlook for continued growth in chicken consumption, Tyson is seeking to add to its already formidable processing capacity. U.S. companies process about 135 million chickens a week now, and the government forecasts annual growth of at least 4 percent to the year 2000. "We intend to be half of that," Tyson Chief Executive Leland E. Tollett said in an interview this week.

Such an expansion could mean $260 million to $300 million in additional sales, Tollett said.

In Scottsdale to address a midwinter meeting of securities analysts and portfolio managers, Tollett estimated half of Tyson's growth might come via acquisitions. He said Tyson, which made four acquisitions last year, is "in hot pursuit of two or three" possibilities.

Rebuffed in its efforts for a hostile takeover of turkey producer WLR Foods Inc. last year, Tyson is "not out beating the bushes right now for a turkey operation _ though if the right one came along we'd take a look at it," Tollett said.

"We're still in the acquisition mood on the chicken side," he added. But because Tyson is such a large, efficient processor, its primary need is for more ready-to-process birds. Analysts estimate that Tyson, the largest domestic poultry company by far, has about 22 percent of the business.

Tyson also is fishing for more companies in the seafood business, in which it had a rocky start. "We've got it cleaned up and running a lot better," Tollett said of the $443 million acquisition of Arctic Alaska Fisheries in 1992.

"It's an industry where there's not a market leader ... (and) we want to become that market leader," Tollett said. Tyson is looking for companies that "will give us access to raw material," he said. "We need to broaden our offerings to the marketplace."

Copyright 1995
Provided by ProQuest Information and Learning Company. All rights Reserved.