Springdale-based Tyson Foods Inc. is touting the recent opening of a brand new plant in Virginia as the company struggles with profitability and pushes on with its long-term growth strategy.
The company said the $300 million chicken plant in Danville, Va., is one of its most fully automated to date and leans into its investment in new technology and focus on efficiency. The 325,000-square-foot facility is capable of producing 4 million pounds of fully-cooked product a week to serve demand from the company's retail and food service customers.
During an interview with Bloomberg News Tuesday at a ceremony marking the opening of the plant, Tyson's President and Chief Executive Officer Donnie King was candid about the meat giant's latest struggles. King, formerly Tyson Foods chief operations officer, stepped into the top spot in June of 2021, becoming the fifth CEO for the company in a five-year span.
"Coming through the pandemic, we had gotten very inefficient," King said. "We got really comfortable. We got fat and lazy."
Through most of fiscal 2023, Tyson Foods has struggled with profitability and it has closed plants around the nation in a move to cut costs and become more efficient.
"We were not as good as we needed to be," King said during the interview, adding that "we're well on our way to being there again, and we will be there."
In response to emailed questions, Alan Ellstrand, a professor in management and associate dean of programs and research at the Walton College of Business at the University of Arkansas, said the new plant is a clear step in Tyson Food's continued efforts to turn the company around.
"Tyson's investment in the new fully-cooked plant ... reflects Tyson's interest in investing in and modernizing their facilities after several recent closures of older plants," he said. "It also demonstrates the commitment to and importance of processed foods to Tyson as it looks to the future in the protein industry."
The project brings 400 jobs to the area, Tyson said. It is the first new plant the company has opened since 2021.
During recent conference calls, company executives highlighted Tyson Food's moves to modernize and become more efficient across all its operating segments. Over the last year King has indicated the company will continue to push to improve its performance.
"Danville represents a significant commitment to the region and we take our responsibility to enhance the communities where we live and work seriously," King said in a statement. "This plant is also a significant step toward our ongoing goal of operational excellence by investing in innovative technology and automation."
Earlier this month Tyson Foods said it was closing two plants -- one in Jacksonville, Fla., and another in Columbia, S.C., cutting more than 450 jobs. Both plants are expected to close in early January. Tyson Foods has closed six plants this year that employed about 4,600 workers in total, including a plant in Van Buren and one in North Little Rock.
The new Danville plant has high-speed automated case packing lines and high-speed robotic case palletizing units. The facility will also be Tyson's first significant use of wearable armbands that house sensors that relay data to managers to identify risks with the goal of improving worker safety and productivity.
"The Danville plant incorporates the latest technology that brings real-time intelligence to our processes, products and workplace experience for team members," Wes Morris, group president, Poultry, Tyson Foods, said in a statement.
In mid-November Tyson Foods reported net loss for its fourth quarter of $450 million, or $1.31 per share, compared with net income of $538 million, or $1.50 per share, in the same period last year. This was Tyson Foods third consecutive quarterly loss.
The company saw a net loss this year of $649 million, or $1.87, compared with last year's net income of $3.25 billion, or $8.92 per share. For fiscal 2023, Tyson logged revenue of $52.88 billion, compared with $53.28 billion in 2022, a decline of 0.8%.
Tyson Foods shares closed at $47.09, down 90 cents or nearly 2% in trading Wednesday on the New York Stock Exchange. Shares have traded as low as $44.94 and as high as $66.79 over the past year.
Information for this article was contributed by John Magsam of the Arkansas Democrat-Gazette and Gerson Freitas Jr. of Bloomberg News.