Daily Management Review

Investment Of $1.3 Billion To Be Made By Tyson Foods To Automate Meat Plants


Investment Of $1.3 Billion To Be Made By Tyson Foods To Automate Meat Plants
Tyson Foods Inc expects to invest more than $1.3 billion in meat factory automation over the next three years, according to Chief Executive Donnie King, as a manpower constraint in the United States limits supply while demand is high.
Due to the tight labour market and health concerns during the Covid-19 outbreak, meat producers have been unable to hire enough staff for the previous two years. more info
Tyson intends to increase output and lower labour costs by extending automation, with a total savings of more than $450 million predicted by fiscal year 2024, according to King during an investor webcast.
According to David Bray, group president of Tyson's poultry division, the firm would progressively utilise robots instead of humans to debone chicken, one of its most labor-intensive occupations with a high turnover rate. He claims that a $500 million capital investment in the area through fiscal year 2024 will result in labour savings equal to more than 2,000 employment.
Tyson's poultry unit's profitability has dropped in part owing to a manpower shortfall and processing factories running at less than full capacity, according to Bray.
"We are not servicing our customers to the degree that they expect us to," Bray said.
Tyson butchered around 37 million hens per week on average in fiscal year 2021, accounting for 80 per cent capacity usage, and will boost processing to 40 million birds weekly in fiscal year 2022, accounting for 85 per cent capacity, according to Bray.
To fulfil high demand, the business plans to butcher 47 million chickens per week over time, achieving roughly 98 per cent capacity utilisation, he added.
"Demand is outpacing supply," he said.
During the epidemic, Tyson altered production to meet surging demand at grocery stores while decreasing sales at restaurants.
According to a U.S. House of Representatives subcommittee investigation, about 59,000 U.S. meatpacking workers were infected with COVID-19 at Tyson and rival operations through January.