Meat + Poultry - March 2006 - 15

Business Notes
Swift expanding value-added
capabilities at Greeley plant

Tyson consolidates beef
operations in Nebraska

Swift & Co., Greeley, Colo., has
announced plans to introduce new
value-added processing equipment and
line configuration upgrades to the Greeley
beef production facility. These enhancements are the next
phase in the company's investment in its
value-added products,
which began in December 2004, and are
designed to increase
the plant's operational efficiency.
Expected
operational improvements
resulting from the upgrades will allow the
company to reduce its
primary fabrication and value-added
processing from two shifts into a
single shift beginning this month.

As part of its strategy to operate more
efficiently and maintain best cost management practices, Tyson Foods, Inc.,
Springdale, Ark., is consolidating beef
operations in northeast Nebraska.
Tyson has permanently closed its
beef processing
plant in Norfolk,
Neb., and beef
slaughter plant
in West Point, Neb.
Production has shifted primarily to the company's beef complex
in Dakota City, Neb., which is completing a new beef processing addition.
The new 84,500-square-foot structure at Dakota City was scheduled
to begin production in February and
will be capable of absorbing the
production previously performed at
Norfolk. Officials say the plant closings will increase the company's beef
production capacity utilization by approximately 6 percent.
"Given the expected efficiencies of
the new processing floor at Dakota
City and the anticipated improvements in capacity utilization, we believe this is the right strategic decision," said Noel White, group vice
president of Tyson Fresh Meats. "The
consolidation will enhance the performance of our beef business, both
now during this time of challenging
market conditions and later when
these conditions improve."
The more efficient use of beef processing capacity, together with reduced
costs from the facility closings, are estimated to generate annual pre-tax cost
savings of approximately $40 million,
a portion of which is estimated to be
generated in the last six months of the
current fiscal year.

Eliminating the shift was expected to
temporarily displace approximately
300
employees,
with some being
transferred to different plants. Other workers may be
recalled at a later
date.
"The enhancements announced
today better position our Greeley
beef facility for
the eventual return
of more historical
market conditions,
as we now have the
ability to conduct
balanced double
shift
operations
- harvesting, primary fabrication and value-added
processing," said Sam Rovit, Swift's
president and C.E.O.

"Operational
improvements
resulting from the
upgrades will allow
the company to
reduce its primary
fabrication and
value-added
processing from
two shifts to one."

Premium Brands merges with Hempler Foods
Premium Brands Income Fund, a producer, marketer and distributor of specialty branded consumer food products, has announced plans to merge
its U.S. meat snack operation with
Bellingham, Wash.-based Hempler
Foods. Hempler's is one of the Pacific
Northwest's leading specialty sausage
and premium processed meats brands.
Hempler's has a line of natural processed meat products.
Both companies will move their
U.S. production facilities into a new,
state-of-the-art 28,000-square-foot
facility located in Ferndale, Wash.
In addition, Premium Brands will
acquire an additional 10 percent

interest in the merged entity for
$580,000, giving Premium Brands
a 60 percent share in the new company. The remaining 40 percent
ownership will be held by Hempler's C.E.O. Richard Hempler and
its vice president and general manager Stephen Bates.
The new combined entity will
operate under the name Hempler
Foods Group L.L.C. Annual sales
are expected to be approximately
$11 million, most of which will
come from customers in the Pacific
Northwest. Officials say expansion
into new U.S. markets is part of the
company's new business plan.

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Meat + Poultry - March 2006

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