MEAT+POULTRY - September 2015 - 10

BUSINESS NOTES

SMITHFIELD TO EXPAND SAUSAGE FACILITY
Smithfield Foods broke ground on the second major
expansion of the company's Cudahy, Wis., dry sausage
facility this past month. The project will add 12,000 sq. ft.
Expected to be finished by March 2016, the expansion
features four new smokehouses and two dry rooms. The
company said the investment will advance the facility's
processing capacity by 3 million lbs. annually and will
allow for four additional dry rooms to accommodate
future demand and volume.
In April, Smithfield broke ground on a new $12 million
bacon slicing plant. The 17,000-sq.-ft. facility is located on
the same site as a previous facility that was destroyed by
fire in 2009. Smithfield expects the bacon plant to be fully
operational by October.

KRAFT HEINZ RECALLS TURKEY
BACON, ANNOUNCES LAYOFFS
More than 2 million lbs. of turkey bacon produced at a
Kraft Heinz Foods Co., Newberry, SC, plant are subject to
recall after the company received consumer complaints
of spoilage before the "Best When Used By" date, the
Food Safety and Inspection of the US Dept. of Agriculture
reported. FSIS said Kraft Heinz has received reports of
illness related to the consumption of the turkey bacon.
The company discovered the problem during its own
investigation of the spoilage-related consumer complaints.
In other news, the Kraft Heinz Co., Pittsburgh,
announced plans to lay off
2,500 employees working
for the company in the
United States and Canada.
Approximately 700 positions will be eliminated at the
company's co-headquarters in Northfield, Ill.
In early August, the new company issued its first
quarterly earnings report. The Kraft Heinz Co. said sales
fell 4.9 percent at Northfield, Ill.-based Kraft Foods Group
Inc. and 4.1 percent at H.J. Heinz Holding Corp. prior to
the completion of the merger in July. Lower prices and
weak demand hurt Kraft in the quarter, while Heinz's
results were affected by unfavorable currency translation.

TYSON CLOSES DENISON, IOWA, BEEF PLANT
When Tyson Foods Inc., Springdale, Ark., announced
the expansion of its beef-processing facility in Dakota
City, Neb., in 2012, there were plenty of reasons to
believe the company's aging beef plant in Denison, Iowa,
would close shortly thereafter. A dwindling cattle herd,
widespread drought and rising production costs for cattle
led other competing companies to close beef operations

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between 2012 and 2014, which allowed Tyson's Denison
plant and its 400 workers to remain open for business.
However, tight cattle supplies ultimately led to the Aug. 14
announcement by Tyson Fresh Meats officials to announce
the closure of the Denison plant, effective immediately.
A reduction in production capacity of its beef
operations in response to today's market conditions was
the reason behind the decision to close the plant, which
opened in 1961 as part of Iowa Beef Packers. Tyson
acquired the plant when it purchased IBP in 2001.
Because of a production-capacity glut in the region
around Iowa, Tyson officials believe removing Denison
from the system will ensure the success of the company's
remaining beef operations. Approximately 20 employees
will continue working at the by-product operation at
the Denison plant, where other Tyson plants will send
products for rendering.
Tyson Fresh Meats is required by law to provide the
400 employees at the Denison plant 60 days of pay and it
is also encouraging workers to apply for positions at its
other facilities. Tyson's other beef plants are located in
Amarillo, Texas; Dakota City, Neb.; Finney County, Kan.;
Joslin, Ill.; Lexington, Neb. and Pasco, Wash.
In the wake of this news, a nearby processor is
awaiting approval of expansion plans that would create up
to 200 jobs and another announced it would be hiring 80
new workers in the next two months.

JBS TO ACQUIRE STAKE IN NZ COMPANY
JBS SA, São Paulo, Brazil, announced the company,
through its subsidiary JBS Australia Pty. Ltd., made a
conditional offer to acquire a 50.1 percent stake in Scott
Technology Ltd., an automated technologies manufacturer
based in Dunedin, New Zealand.
Terms of the deal include placement of 10 million
shares at NZ$1.39 to provide the capital Scott needs.
Shareholders of Scott who want to reduce or sell all
their shares would receive an offer price of NZ$1.39 per
share. Shareholders who don't want to sell or would like
to increase their shares would receive a 1-for-8 nonrenounceable rights issue at the same price. The offering
represents NZ$63 million ($42 million).
Scott Technology previously notified its shareholders
of the need to raise capital and reduce debt following
recent acquisitions.
JBS has an existing business relationship with Scott
Technologies, and many of Scott's current meat-processing
developments were undertaken in conjunction with JBS
Australia and globally. Scott Technology manufactures
automated lamb deboning and beef and lamb boning
systems, among other technologies.

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MEAT+POULTRY - September 2015

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