Tyson Foods is progressing with the refurbishing of its beef processing plant in Finney County, Kansas, that was badly damaged during an August 9 fire, the company’s CEO said.
Noel White, CEO of Tyson Foods, addressed the situation with that plant, as well as other topics related to Tyson Foods, while speaking on September 4 at the Barclays Global Consumer Staples Conference.
White praised the Finney County communities of Holcomb and Garden City for their “tremendous” response to the fire.
“Not only was everybody safely evacuated, but they were successful in minimizing damage,” White said.
The part of the plant most badly damaged by the fire was the electrical system and two large panel rooms, White said, and most of the time spend repairing the building will be spent rewiring that portion of the plant.
Fortunately, White said, the further processing portion of the plant was “untouched.”
“We are operating that portion of the plant and doing some further manufacturing from some of our source plants and shipping products,” he said.
However, White is optimistic the plant will return to full production in the coming months, although the timing of that is still somewhat uncertain.
“By the time we get through our Q1, which will be December, we expect the issue to be behind us and resume business as usual,” he said.
Short-term challenges
One day prior to Tyson’s presentation at the conference, the company issued a press release that cautioned Tyson Foods was experiencing some “short-term challenges” that are adversely affecting earnings during the fourth quarter of fiscal year 2019. The fire was one of the challenges mentioned.
However, White said despite the fire, the company is still able to service its traditional suppliers and long-term customers of the Finney County plant through other facilities. Hourly workers continue to be paid while portions of the plant are down.
Other challenges during the fourth quarter mentioned in the press release include margin compression related to a reversal of a gain on mark to market grain derivatives recognized in Tyson’s third quarter, commodity market volatility, implementation of enhanced food safety initiatives, and slower than expected operational improvements in the chicken segment.
