Protein powerhouse Keystone Foods is a leading provider of
poultry, beef, fish, and pork to QSRs (quick-service restaurants),
retail outlets, and food service providers. It processes some 2
billion pounds of poultry into chicken nuggets, tenders, and wings
for customers such as McDonald's; in addition, the company supplies
hamburger patties, sausage and pork patties, and fish filets.
Keystone Foods operates primarily in the US and the Asia-Pacific
region, with the US market accounting for most of its
sales. The company, which began as a beef-boning business in
the 1960s, is owned by Latin American beef producer Marfrig
Alimentos. It is being acquired by US chicken giant Tyson
Foods.
Change in Company Type
Keystone parent Marfrig has been exploring ways to cash in on
the strength of its subsidiary for several years. In 2017 it began
the process of taking Keystone public, but that never came to
fruition. In mid-2018 Marfrig agreed to sell Keystone to US chicken
giant Tyson Foods for $2.16 billion. The deal strengthens Marfrig's
capital structure and focus on beef and gives Tyson a strong
foundation for international growth.
Geographic Reach
Pennsylvania-based Keystone Foods has about 25 facilities in the
US (Alabama, Georgia, Kentucky, North Carolina, Pennsylvania, and
Wisconsin), as well as China, South Korea, Malaysia, Thailand,
and Australia.
The US accounts for nearly 70% of total revenue with the
Asia-Pacific region bringing in most of the rest.
Financial Performance
Keystone in 2017 reported revenue of $2.8 billion, up about 3%
from the prior year. The results were powered by the Asia-Pacific
region, including growth in the foodservice channels in China,
Thailand, and Malaysia.
Strategy
The Asian market has been driving Keystone's growth the past
several years and is a major focus for the company. In late 2017
the company opened a new plant in Thailand, which expanded
production capacity in the Asia region by 10%. It also invested in
its Malaysian operations to expand production there.
Company Background
Keystone was founded in the early 1960s as a family-owned
beef-boning business. The company went public in the 1970s and
expanded into new product and geographic markets over the next few
decades. In 2010 it was acquired by Marfrig in Brazil. In mid-2018
Marfrig agreed to sell Keystone to US chicken giant Tyson
Foods.