Tyson Food plans to open beef plant in Kazakhstan
Deal will allow US meat company to dodge high tariffs
The largest meat company in the US plans to open a beef plant in Kazakhstan, to gain access to Asia and avoid high tariffs.
Tyson Foods signed an agreement with the Republic of Kazakhstan and private holding company KUSTO GROUP to collaborate on a project that could lead to the construction of a beef processing plant.
Its international business currently accounts for 3 per cent of its $42.4bn (£32.18bn, €38.23bn) yearly revenue and it hopes this new agreement will help it expand into Asia – which represents a massive growth area.
Noel White, Tyson chief executive, said more than 98 per cent of demand growth for protein would come from outside the US, and mostly in Asia.
Kazakhstan is the ninth largest country in the world by geographic area and has identified the livestock and the multi-protein export industry as a key growth market.
“This initiative is to help satisfy that growth in demand that we see over the course of the next 10-plus years,” said White.
The anticipated harvest capacity will be 2,000 head per day, which will provide an annual agricultural income to Kazakhstan in excess of $1bn.
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Tyson reportedly discussed an initial investment of around $200m, which would form part of a total investment costing several billion dollars.
Kazakhstan also shares a border with China, where demand for imported meat has risen due to African swine fever, which killed over half its pig herd.
The US is currently subject to 47 per cent tariffs on its beef as part of the trade war with Beijing, and this new deal would mean Tyson could avoid the charges, by producing meat in Kazakhstan. With aims to scale up production to 5m tonnes of beef a year, this represents a massive saving.
Kazakhstan’s prime minister Mamin said: “Tyson is a world-class company with the expertise necessary to help Kazakhstan jump-start the transformation of our agro-protein capabilities and help us create an ecosystem that will increase our beef herd size and establish conditions to support thousands of new high-quality jobs in the country.”
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