Tyson Foods, Inc., recently announced the signing of a letter of intent to sell its plants in Ashland, Ala., and Gadsden, Ala., to Koch Foods Incorporated, Park Ridge, Ill. The sale will include a feed mill in Talladega, Ala., and hatcheries in Fair Knoll, Ala., and Empire, Ala. The companies said they anticipated completing the deal by the end of May.

Tyson began reassessing the future of these Alabama operations last year after fire destroyed the company’s poultry processing plant in Heflin. This led to a discussion with Koch, which has been a long-time, primary customer of the Heflin and Ashland plants, and more recently, the Gadsden facility, which has not been operating at full capacity due to production cuts Tyson initiated in 2006.

“Since both the Ashland and Gadsden plants are involved in the production of commodity chicken products, and Tyson has become more focused on value-added chicken production, we believe it makes economic sense to sell these operations,” said Bill Lovette, senior group vice president of poultry and prepared foods for Tyson. “While it’s difficult to leave these communities, we believe Koch is a good fit for these operations, especially since it’s already the primary customer of the fresh chicken produced at both plants.”

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Koch Foods is the ninth largest broiler company in the USA in the February 2007 WATT PoultryUSA Top Broiler Company ranking and currently operates four slaughter plants and has processing plants in Alabama, Tennessee and Mississippi. Tyson is the country’s second largest broiler company.

Koch Foods will assume production contracts with approximately 350 growers who currently raise chickens for Tyson. “We appreciate the outstanding work and support the poultry producers have provided Tyson’s operations over the years, and are confident they will have a positive working relationship with Koch,” said Lovette. The Gadsden and Ashland poultry complexes have been part of Tyson Foods for more than 20 years.

Approximately 1,200 Tyson team members are employed at the Tyson locations involved in the sale, and many are expected to be given opportunities to work for Koch Foods. However, 400 of the 675 positions at the Gadsden plant will be eliminated by late May, as Tyson shifts the facility’s further processing activities to other company locations. The further processing involves the production of refrigerated foodservice and deli products, as well as some frozen foodservice and retail items, which Koch does not plan to produce at Gadsden.