USA – World’s second-largest meat  processor, Tyson Foods, is reportedly planning to sell its China poultry business.

The decision is part of the company’s efforts to lower costs and step away from the Chinese market as part of its strategy to lower costs and reevaluate its operations.

The struggling Chinese economy and increasing feed prices have also been termed to likely influence this decision.

Tyson Foods has also enlisted the help of Goldman Sachs as an advisor and has already started reaching out to potential buyers including private-equity firms.

Recently, Tyson has seen profits plummet amid an unusual combination of headwinds across all major protein markets, including a supply glut of chicken and pork.

The company earlier this year moved to shut 4 chicken plants in the US as part of efforts to streamline operations and boost capacity use.

According to the Jimmy Dean and Hillshire Farm brand owner the plan to close the operations following a drop in third-quarter revenue and profits, adding to the financial strains of the previous two quarters.

“We’ll continue to look and evaluate everything as we automate and modernise assets,” CEO Donnie King said giving an outlook for the potential closure of other plants.

Tyson Foods entered China in 2001 and has its headquarters in Shanghai. In June, the company announced the “commencement ceremony” for its so-called Nantong Smart Factory based in the city of the same name in Jiangsu province.

A statement from the company noted the facility integrates feed processing, poultry breeding, slaughtering, processing and sales, and would serve the retail and food service channels in China with chilled and frozen chicken products.

The Tyson Nantong Smart Factory is the third in operation after Tyson Rizhao Smart Factory and Tyson Xiaogan Smart Factory, according to the statement, which added Tyson Foods has three R&D centres, four large industrial chain base layouts, and dozens of breeding farms in China”.

Financial Report from the company highlighted that in Tyson Foods’ 2022 financial year, group sales of beef, chicken and pork rose 13% to US$53.2bn. Chicken increased 23.3% to US$16.9bn, with volumes up 0.7%.

However, in the most recent third-quarter reporting period, chicken sales dropped 4.5% to US$4.2bn. Year-to-date sales were US$12.9bn, up 4.9%.

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