Tyson Foods is looking for a buyer for poultry assets in China

The amount of the upcoming deal is not yet known, but according to a source familiar with the situation, annual sales of Tyson Foods in CHINA are approximately $1.1 billion. The situation in the Chinese market has become more complicated over the past two years. The reduction in margins on livestock farms was a consequence of the CORONAVIRUS pandemic and rising feed prices amid the tense military-political situation in Eastern Europe.

The Chinese full-cycle holding company New Hope Liuhe is considering the possibility of attracting strategic investors in the poultry segment of the business and MEAT processing in order to reduce accumulated debts. Some foreign players have sold their businesses in China or reduced their assets due to a drop in their profitability amid slowing economic growth, a tight competitive environment and high geopolitical risks. According to the Dealogic platform, in 2022, foreign companies from various sectors of the economy sold enterprises in China to local market players for a total amount of $13.5 billion, and this year - already for $8.4 billion.

Back in 2021, the British Reckitt Benckiser Group got rid of its baby food factories in China: they were bought by the investment company Primavera Capital Group, headquartered in Hong Kong, for $2.2 billion. The Dutch FrieslandCampina sold the infant formula plant to the industrial group Inner Mongolia Yili in July last year and is still looking for a buyer for the Friso brand. In May of this year, Cargill's Chinese poultry assets became the property of the investment company DCP Capital. The parties did not disclose the amount of the transaction. Tyson Foods opened its first plant in China in 2001. Now it owns four research and development (R&D) centers, several processing plants, dozens of breeding farms, that is, it is included in all parts of the supply chain in the Chinese market.

The range includes pork , beef , chicken and semi-finished meat products. In June 2023, a Tyson Foods plant for the production of ready-made meat dishes and semi-finished products was put into operation in the city of Nantong, Jiangsu Province in eastern China. Another deep processing plant was recently launched in Xiaogan City, central Hubei Province.

In early July, Tyson Foods headquarters released nine-month sales data: the total was $39.5 billion, with about $1.9 billion coming from international operations, including China. In August, Tyson Foods top management announced the upcoming closure of four poultry plants in the United States to optimize costs. The fact is that financial indicators in the third half of 2023 do not justify the forecasts of Wall Street financial analysts.