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SPRINGDALE, Ark.-- Tyson Foods, Inc. here is on track to deliver more than 90 percent its goal in annual savings for fiscal year 2007, said company executives at a financial conference. However, the execs added that it would take more than cost cuts to take the company into the future.
What will it take? Growing Tyson's top line sales by leveraging its size to sell more products across all distribution channels, for one thing, said Richard L. Bond, who was promoted to chief executive in May, and who joined c.f.o. Wade Miquelon in a presentation earlier this week at the Prudential Equity Group's Annual Back-to-School Consumer Conference in Boston.
They noted the steps the company has taken in recent months to return to profitability, including the implementation of approximately $200 million in cost reductions and the consolidation of beef plants. "I'm proud of what we've done so far to right the ship, but there is much more we can do," Bond said. "To thrive, not just survive, we must respond better and faster ... and we will."
The world's largest producer and marketer of chicken, beef and pork, Tyson will "leverage our scale to create long-term, sustainable shareholder value," said Bond. "One of the ways we're going to do that is by thinking across channels, across customers and across proteins." Examples include the possibility of selling some new foodservice products to club stores, or marketing a product originally developed for school cafeterias to retailers.
"We see ourselves as a value-added food company with a commodity base, and we think this works to our advantage because we can internalize raw materials for our further-processed products," Bond said. For example, 70 percent of the company's mix of poultry products is value-added, with such items as chicken nuggets, breaded strips, and hot wings.
"The commodity side of our business needs to be cost-efficient and cost-conscious at all times," Bond added. "We recognize we compete on price in this business. We probably won't always be the lowest price, but we need to be close."
Tyson is preparing to open a new research, development, and training complex in early 2007 called "The Discovery Center." This new complex at the company's headquarters will include 18 test kitchens. In addition, the company will build a USDA-inspected pilot plant to provide a manufacturing environment for product development and new concepts, to improve "speed to market."
Bond also noted the recent addition of several new senior executives to Tyson Foods. New c.f.o. Wade Miquelon joined the company three months ago after working for 16 years at The Procter & Gamble Company (P&G). As part of the transition of leadership at Tyson, Miquelon now reports directly to Bond.
Rick Greubel joined Tyson in August as group v.p. of international and will oversee all of the company's international sales and operations. He was previously employed by Monsanto, where he was president, managing director and commercial acceptance lead for Monsanto Brazil.
Rob DeMartini also joins the company this month as group v.p./consumer products, overseeing operations, marketing and sales for all divisions within Tyson's Consumer Products business, including deli, processed meats, wholesale clubs and retail. He comes to Tyson Foods from The Gillette Co., where he was s.v.p./g.m. of the company's $2.2 billion grooming division.