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Tyson Foods plans to spend $1.3 billion to automate meat plants -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO: Tyson Rooster Nuggets, owned by Tyson Meals, are seen on the market in Queens, New York, U.S., November 16, 2021. REUTERS/Andrew Kelly/File Picture

CHICAGO (Reuters) -Tyson Meals Inc plans to spend greater than $1.3 billion to extend automation in meat vegetation over the following three years, Chief Government Donnie King stated on Thursday, as a U.S. labor scarcity has restricted manufacturing whereas demand is booming.

Meat processors have been unable to search out sufficient staff for the previous two years because of the tight labor market and well being issues throughout the COVID-19 pandemic.

Tyson expects to spice up manufacturing and scale back labor prices by increasing automation, with cumulative financial savings of greater than $450 million projected by fiscal 12 months 2024, King stated on a webcast for buyers.

The corporate will more and more use machines, as an alternative of individuals, to debone hen, considered one of its most labor-intensive jobs and a place with excessive turnover, stated David Bray, group president of Tyson’s poultry division. A capital funding of $500 million within the space by fiscal 12 months 2024 will generate labor financial savings equal to greater than 2,000 jobs, he stated.

Profitability in Tyson’s hen unit has declined partly because of the labor scarcity and since processing vegetation are working beneath full capability, Bray stated.

“We aren’t servicing our prospects to the diploma that they anticipate us to,” Bray stated.

Tyson slaughtered about 37 million chickens every week on common in fiscal 12 months 2021, accounting for 80% capability utilization, and can improve processing to 40 million birds weekly in fiscal 12 months 2022, or 85% capability, Bray stated.

The corporate goals to slaughter 47 million birds every week over time, reaching about 98% capability utilization, to satisfy robust demand, he stated.

“Demand is outpacing provide,” he stated.

Tyson shifted manufacturing throughout the pandemic to adapt to hovering demand at grocery shops and decreased gross sales at eating places.

About 59,000 U.S. meatpacking staff have been contaminated with COVID-19 by January at vegetation run by Tyson and rivals, in accordance with a U.S. Home of Representatives subcommittee report.

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