020822 Tyson Restructures Swine Division

Springdale, AR (AP) - Meat-processing giant Tyson Foods Inc. plans to close its company-owned and leased hog farms and end contracts with 132 contract hog producers in Arkansas and eastern Oklahoma.

The move to restructure Tyson's live swine division will result in about 200 job cuts, the company said.

"We've been running this division at an operating loss," Tyson chairman and chief executive officer John Tyson said. "Therefore, it is now time to do what we must to try and ensure the long-term viability of the remaining part of this business."

Tyson, the world's largest processor and marketer of beef, chicken and pork, has been in the live-swine business since the 1970s. The company left the pork-processing business in the mid-1990s, then re-entered it after acquiring meatpacker IBP for $3 billion in September 2001.

The company said 159 farms would be affected.

The restructuring will begin this week, and should be completed in the second quarter of the 2003, Tyson said.

The move will reduce fourth-quarter pretax earnings by $20 million to $30 million, but "it is expected to have a positive impact on the future earnings potential for the company's pork operations," Tyson said.

Tyson said transportation costs were a big factor in the decision to carry out the restructuring. Competing companies have pork processing operations closer to packing facilities, avoiding higher transportation costs for both finished hogs and grain, Tyson said.

RETURN TO HOME PAGE

E-mail: sflanagan@sprintmail.com