Tyson Foods injects US$83m into expanding Kentucky sausage plant to meet burgeoning demand

US – Tyson Foods, the world’s second-largest meat processor, has operationalized its newly expanded cocktail sausage manufacturing plant in Kentucky to meet consumer demands.

According to the company, the US$83 million expansion will add 15,000 square feet to its 342,000-square-foot facility to increase production by 50% to better serve customers.

It added that the project was spurred by growth in demand for Tyson’s Hillshire Farm brand products whose sales have risen by more than 11%.

“The Claryville plant has been operating since 1984 and producing cocktail sausages since 1991 and employs more than 750 team members and produces more than 120 million pounds of protein yearly,” Tyson added.

“The two plants in Claryville currently produce 130 million pounds of hot dogs, sliced meats, and 70% of the world’s cocktail sausages, making Claryville the “Cocktail Sausage Capital of the World.”

At the beginning of last year, Tyson Foods inaugurated its bacon production facility in Bowling Green, KY creating 450 jobs in Warren County, and meeting the growing demand for the company’s product.

Research shows that since the start of 2020, new location and expansion projects within the sector were expected to create more than 2,600 full-time jobs with over US$1.8 billion in new investments.

In 2021, the Kentucky Economic Development Finance Authority (KEDFA) approved a performance-based incentive agreement with Tyson Foods under the Kentucky Business Investment program.

Additionally, KEDFA approved Tyson for tax incentives through the Kentucky Enterprise Initiative Act (KEIA).

“KEIA allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing,” analysts reported.

Tyson Foods cuts 2023 sales forecast 

Meanwhile, the company has lowered its forecast for full-year sales to US$53 billion to $54 billion from $55 billion to $57 billion, after adjusted operating income for the first half of fiscal year 2023 sank 80% to $518 million.

CEO Donnie King, who is seeking to cut costs, said that Tyson is in the unusual position of facing challenges in its beef, pork, and chicken businesses simultaneously.

He added that Tyson meat prices hiked last year to offset inflation, but average sales prices for its beef and pork fell 5.4% and 10.3%, respectively, in the first quarter.

“The rise in the prices reduced demand for beef is making it difficult for Tyson to pass on higher costs to consumers,” the company said.

Tyson also noted that elevated feed costs and drought have driven cattle producers to send animals to slaughter instead of keeping them for breeding, forcing meatpackers to compete to buy fewer livestock.

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