Tyson seals Shandong poultry joint venture

Tyson Foods has sealed plans to buy a majority stake in Chinese poultry producer Shandong Xinchang Group. The US meat giant, which had signed a preliminary deal to buy a 60 per cent stake in the business, said that it had finalised the agreement and will see the firms set up a joint venture.

The deal still awaits government approval but the two sides plan to set up Shandong Tyson Xinchang Foods Corporatrion, a business consisting of the Chinese group's existing assets. The two companies also plan to buy another chicken processing site in Shandong province, which would take the venture's assets to four chicken processing sites and a duck processing plant.
Rick Greubel, group vice president and international president, Tyson Foods, said, ''Poultry is the second-leading meat protein source in China after pork and would continues to make significant gains in the consumption. This joint venture will enable us to help meet China's appetite for poultry, which has been growing faster than the existing domestic supply.''

Most of the chicken and duck products are sold through the foodservice and wholesale channels and Greubel added that the venture would look to expand its business in these sectors, as well as with major Chinese retail customers. The venture will be Tyson's third in China, a market that accounted for 9 per cent of the group's overseas revenue in fiscal 2007.