Tyson Foods buys stake in chicken supplier

6 September 2019

US food company Tyson Foods is set to buy a 40% stake in Brazilian poultry producer Grupo Vibra.

Tyson said in a statement that the deal would give it a more flexible supply chain and would help it serve customers in key global markets.

Tyson did not disclose the terms of the agreement and the transaction is still subject to approval by Brazilian regulators. However Tyson confirmed that Grupo Vibra will spin-off its genetics multiplication business, Agrogen, into a separate company.

“This investment will enable us to access poultry supplies in Brazil to meet the growing needs of Brazilian customers and of priority demand markets in Asia, Europe and the Middle East,” said Donnie King, group president, international & chief administration officer for Tyson Foods.

“It’s part of our strategy to develop a more flexible supply chain and mitigate the volatility of our previous model, which relied primarily on US exports.”

Grupo Vibra, which serves customers in Brazil as well as more than 50 countries around the world, said it expects the tie-up will allow it to capitalise on Tyson’s distribution network to reach more customers.

Over the last year Tyson Foods has been expanding globally. The strategy has led to the acquisition of Keystone Foods, which operates in countries including China, South Korea, Malaysia, Thailand and Australia.

It also led to acquisition of BRF’s poultry businesses in Thailand and Europe.

Tyson Foods has international sales of $7bn annually, including $5bn in US export sales and around $2bn of in-country revenues. 

The company said it believes that over the next five years nearly 98% of protein consumption growth will happen outside the US.

“That’s why we’re growing our business outside the US,” said King. “As the world population continues to grow, Tyson will grow with it.” 

Gerson Luís Müller, CEO of Grupo Vibra, said: “This partnership will be important to further develop our businesses in Brazil and foreign markets, granting access to new technologies and investments, mainly in R&D.

“We will capitalise on a global distribution network to reach new markets. We trust that this agreement will strongly contribute to improve the quality of our services, adding new products to our portfolio offered to clients and consumers.”

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