Tyson Foods expands global footprint in deal with Malaysian-based firm

by Kim Souza ([email protected]) 1,349 views 

Tyson Foods has acquired a minority 49% stake in Malayan Flour Mills Berhad (MFM) that will vertically integrate the Malaysia-based poultry business and add more supply flexibility for both companies.

The transaction announced Wednesday (Feb. 10) is subject to approval by MFM shareholders and others. Tyson did not disclose the cost of the deal.

“Once completed, the poultry deal will optimize our existing Malaysia business and expand MFM’s poultry business,” said Chris Langholz, international president of Tyson Foods. “This partnership will add more supply flexibility for both companies in serving halal-certified poultry to consumers and customers in the country and across priority export markets.”

Tyson’s Malaysia business operates one plant and one innovation center, it’s new partner operates a poultry business that includes feed mills, hatcheries, farms and processing facilities.

“We are pleased to partner with Tyson Foods to expand MFM’s long-established poultry business,” said Teh Wee Chye, managing director for MFM. “Tyson Foods is one of the world’s largest food production companies with a strong global manufacturing and distribution footprint. Malaysia is one of the key poultry markets in Southeast Asia, with a high per capita consumption of poultry. Together with Tyson Foods, we look forward to increasing our halal poultry product offerings in the country, especially in the further processed poultry segment, as well as exporting to demand markets with the help of Tyson Foods’ global network.”

Tyson began expanding its global footprint about three years ago with several poultry acquisitions, including Keystone Foods. The Keystone deal completed in 2018 included assets in China, South Korea and Malaysia in addition to six U.S. plants. Tyson said at that time the assets in Malaysia and Asia were strategic to the company’s long-term growth. Tyson acquired the Thai and European operations of Brazil Foods in 2019 for $340 million.

“It’s estimated that approximately 90% of global protein consumption growth will occur outside the United States, with 60% of the volume growth coming from Asia over the next 5 years,” said Donnie King, who was international president in 2019. “Increasing our international footprint with in-country operations and export capabilities will help Tyson Foods strategically access new markets and better serve the growing global demand for our value-added protein.”

With respect to the MFM deal, Tyson said Malaysia’s halal – Muslim practicing – market value is expected to reach $147.4 billion by 2015. The country also exports about $9 billion in halal-certified products annually, according to the Halal Industry Development Corp.

“Our global resources and robust innovation capabilities paired with MFM’s more than 30 years of expertise as a leading poultry player in the country, enable both companies to make halal-certified products more readily available and affordable,” said Tan Sun, president of Tyson Foods APAC.

Tyson Foods generated $6 billion in international sales in the recent fiscal year, which included U.S. export sales. Analysts expect international operating income to be down in Tyson’s first-quarter results which will be reported prior to the market opening on Thursday. Shares of Tyson Foods (NYSE: TSN) traded lower on Wednesday, at $69.14, down 37 cents in the afternoon session. Over the past 52 weeks the stock has traded between $42.57 and $81.70.