Tyson Foods 2015 Annual Report Download - page 5
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Please find page 5 of the 2015 Tyson Foods annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.CUSTOMERS
Wal-MartStores,Inc.accountedfor16.8%ofourfiscal2015consolidatedsales.SalestoWal-MartStores,Inc.wereincludedinallofoursegments.Any
extendeddiscontinuanceofsalestothiscustomercould,ifnotreplaced,haveamaterialimpactonouroperations.Noothersinglecustomerorcustomergroup
representedmorethan10%offiscal2015consolidatedsales.
COMPETITION
Ourfoodproductscompetewiththoseofotherfoodproducersandprocessorsandcertainpreparedfoodmanufacturers.Additionally,ourfoodproductscompetein
marketsaroundtheworld.
Weseektoachievealeadingmarketpositionforourproductsviaourprincipalmarketingandcompetitivestrategy,whichincludes:
•identifyingtargetmarketsforvalue-addedproducts;
• concentratingproduction,salesandmarketingeffortstoappealtoandenhancedemandfromthosemarkets;and
• utilizingournationaldistributionsystemsandcustomersupportservices.
Pasteffortsindicatecustomerdemandcanbeincreasedandsustainedthroughapplicationofourmarketingstrategy,assupportedbyourdistributionsystems.The
principalcompetitiveelementsareprice,productsafetyandquality,brandidentification,innovation,breadthanddepthofproductofferings,availabilityof
products,customerserviceandcreditterms.
FOREIGN OPERATIONS
Wesoldproductsinapproximately130countriesinfiscal2015.MajorsalesmarketsincludeBrazil,Canada,CentralAmerica,China,theEuropeanUnion,Japan,
Mexico,theMiddleEast,SouthKorea,andTaiwan.
Wehavethefollowingforeignoperations:
• Cobb-Vantress,achickenbreedingstocksubsidiary,hasbusinessinterestsinArgentina,Brazil,China,theDominicanRepublic,India,Japan,the
Netherlands,thePhilippines,Russia,Spain,Turkey,theUnitedKingdomandVenezuela.
• TysonRizhao,locatedinRizhao,China,isavertically-integratedchickenproductionoperation.
• TysonDalong,ajointventureinChinainwhichwehaveamajorityinterest,isachickenfurther-processingfacility.
• TysonNantong,locatedinNantong,China,isavertically-integratedchickenproductionoperation.
• GodrejTysonFoods,ajointventureinIndiainwhichwehaveamajorityinterest,isachickenprocessingbusiness.
• TysonMexicoTradingCompany,aMexicansubsidiary,sellschickenproductsprimarilythoughco-packerarrangements.
Wecontinuetoevaluategrowthopportunitiesinforeigncountries.Additionalinformationregardingexportsalesandlong-livedassetslocatedinforeigncountries
issetforthinPartII,Item8,NotestoConsolidatedFinancialStatements,Note17:SegmentReporting.
RESEARCH AND DEVELOPMENT
Weconductcontinuousresearchanddevelopmentactivitiestoimproveproductdevelopment,toautomatemanualprocessesinourprocessingplantsandgrowout
operations,andtoimprovechickenbreedingstock.OurDiscoveryCentersincludea100,000squarefootresearchanddevelopmentfacilityinSpringdale,
Arkansaswith19researchkitchensandaUSDA-inspectedpilotplant.Wealsoleaseanapproximately78,000squarefootresearchanddevelopmentfacility
outsideChicago,IllinoisassumedinourHillshireBrandsacquisition,whichincludesfivetestkitchensandaUSDA-inspectedpilotplant.TheDiscoveryCenters
enableustobringnewmarket-leadingretailandfoodserviceproductstothecustomerquicklyandefficiently.Researchanddevelopmentcoststotaled$75million
,$52million,and$50millioninfiscal2015,2014and2013,respectively.
ENVIRONMENTAL REGULATION AND FOOD SAFETY
Ourfacilitiesforprocessingchicken,beef,pork,turkeyandpreparedfoods,millingfeedandhousinglivechickensandswinearesubjecttoavarietyof
international,federal,stateandlocalenvironmentallawsandregulations,whichincludeprovisionsrelatingtothedischargeofmaterialsintotheenvironmentand
generallyprovideforprotectionoftheenvironment.Webelieveweareinsubstantialcompliancewithsuchapplicablelawsandregulationsandarenotawareof
anyviolationsofsuchlawsandregulationslikelytoresultinmaterialpenaltiesormaterialincreasesincompliancecosts.Thecostofcompliancewithsuchlaws
andregulationshasnothadamaterialadverseeffectonourcapitalexpenditures,earningsorcompetitiveposition,andexceptasdescribedbelow,isnotanticipated
tohaveamaterialadverseeffectinthefuture.
Congress,theUnitedStatesEnvironmentalProtectionAgencyandsomestatescontinuetoconsidervariousoptionstocontrolgreenhousegasemissions.Itis
unclearatthistimewhatoptions,ifany,willbefinalized,andwhethersuchoptionswouldhaveadirectimpactontheCompany.Duetocontinuinguncertainty
surroundingthisissue,itisprematuretospeculateonthespecificnatureofimpactsthatimpositionofgreenhousegasemissioncontrolswouldhaveonusand
whethersuchimpactswouldhaveamaterialadverseeffect.
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