Tyson expects growth opportunity from US-China trade deal – LISTEN

By Aidan Fortune

- Last updated on GMT

Related tags Us China Poultry Tyson foods Processing equipment & plant design

In its latest podcast, GlobalMeatNews caught up with Tyson Foods group head of poultry Chad Martin to discuss the opportunity that the trade deal between the US and China is expected to present.

The trade deal between the US and China​ has been largely welcomed by meat processors looking to extend into that market, and Tyson Foods is no exception.

“This opening to US poultry is a great opportunity. It's the opening of a market where we have additional protein consumption as well as a market we haven't been in in the last several years. It allows Tyson to continue to execute on our global strategy.

“It's going to generate a lot of demand. We're already seeing a lot of interest from our customers and from the market. If we use USDA estimates, chicken imported into China from the US will double between 2018 and 2020, it's a significant opportunity for the entire industry.”

Martin also outlined how Tyson is ready to meet the additional demand that will be created in China.

“As China lifts its poultry ban, we [Tyson] are well positioned to meet demand for a variety of reasons. We have a diverse portfolio of protein products and that allows us to be a sustainable protein source for the global market. We have an extensive in-country presence to enable us to better meet this demand. We've got the teams in place to allow us to bring insights to our production methodologies to enable us to deliver.”

The business is not expected to make any significant investments to cater for the added demand but would rather "shift supply lines"​. 

Domestic performance

When asked how Tyson is performing in the US, Martin said: "We have a diverse poultry business in the US, and I'm very pleased with how we've been performing in the US over the past two years."

In its fourth quarter results (for 13 weeks to 28 September 2019) Tyson reported a that year-on-year sales volumes rose 8.9% during the quarter while its operating income dropped from $819m in 2018 to $604m in 2019. For the 12 months ending 28 September 2019, volume sales were up 8.8% but income dropped from $3.03bn in 2018 to $2.82bn in 2019.

Chlorinated chicken

Martin also discussed the controversy that has been playing out in the UK over the practice of chlorinated chicken. 

“The majority of our plants doesn't use chlorinated water as an antimicrobial rinse, we do use chlorine in our plants to sanitise equipment as part of the normal cleaning cycle. But the use of chlorine within chicken processing is safe. I believe it's a safe practice even though we don't use it in the majority of our plants.”

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