Printable Version
Tyson Foods and Syntroleum Launch Renewable Fuels Venture
Companies to build United States’ first commercial
synthetic fuels plant
Springdale, Arkansas – June 25, 2007 – Tyson Foods, Inc. (NYSE: TSN) is taking
another strategic step in its quest to be a leader in renewable energy. Tyson and
Syntroleum Corporation (NASDAQ: SYNM), a Tulsa-based synthetic fuels technology
company, will today announce the formation of Dynamic Fuels LLC, which will produce
synthetic fuels targeting the renewable diesel, jet, and military fuel markets.
The two companies will hold a 1:30 p.m. (CDT) news conference
today at Tyson World Headquarters in Springdale.
The 50/50 venture intends to construct and operate multiple
stand-alone commercial facilities capable of producing ultra-clean, high quality,
next generation renewable synthetic fuels using Syntroleum’s patented Biofining™
process, a “flexible feed/flexible synthetic fuels” technology. Feedstock primarily
derived from animal fats, greases, and vegetable oils will be supplied by Tyson.
The first facility will produce about 75 million gallons
of synthetic fuel annually. Construction of this initial facility is expected to
start in 2008 at a yet-to-be-determined site in the south central United States,
with production targeted for 2010. The $150 million project will generate approximately
250 short-term construction jobs and 65 highly skilled permanent jobs.
Dynamic Fuels will leverage Syntroleum’s proprietary
work done in producing synthetic fuel and developing synthetic fuel standards for
the U.S. Air Force and the Department of Defense. The fuel produced by the venture
will offer the same benefits of synthetic fuels derived from coal or natural gas
while providing substantial advantages over petroleum-based fuels. These benefits
include higher cetane levels, which are a measure of combustion quality; significantly
lower Nitrogen Oxides (NOx) and near zero sulfur. In addition, it will provide superior
thermal stability, making it effective for advanced military applications.
The fuel will offer the additional benefits of higher
energy content, better cold flow properties enabling it to function effectively
in cold weather and reduced carbon dioxide emissions. The unblended fuel can be
used in existing diesel engines with no engine modifications required and also can
be upgraded into ultra-clean, high quality synthetic jet fuel.
The fuels are expected to be completely compatible with
existing pipelines, storage facilities and other conventional fuel infrastructures.
Further, the synthetic fuel produced by Dynamic Fuels may be blended with petroleum
based diesel and/or conventional biodiesel to help those fuels achieve superior
environmental and performance characteristics.
“Tyson’s venture with Syntroleum represents another
significant step forward in our strategy of leveraging Tyson’s access to animal
by-products, our trading skills, and industry relationships to become a premier
player in renewable energy,” said Richard L. Bond, Tyson president and CEO. “We
believe this venture will add value to our business, give animal agriculture another
opportunity to participate in the production of renewable fuels and is also an environmentally
sound way to contribute to America’s energy security.”
“Our venture with Tyson affords us the opportunity to
apply part of our established portfolio of technologies to produce next generation
ultra-clean renewable synthetic fuels that contribute to our nation’s energy independence
while helping reduce greenhouse gas emissions,” said Jack Holmes, CEO of Syntroleum.
“The Tyson organization is a world class company committed to establishing a new
benchmark in the renewable fuels industry, and we are proud to combine our Biofining™
technology with their resources in this new venture.”
As the world’s largest producer and marketer of chicken,
beef and pork, Tyson produces large by-product volumes of various grades of animal
fats, such as beef tallow, pork lard, chicken fat, and greases which can be utilized
as renewable feedstock for this venture. Drawing on Tyson’s decades of applied protein
chemistry experience, the feedstock mix will be pre-processed and optimized for
the facilities.
Tyson also intends to use its significant procurement
capabilities, industry relationships, and experience in commodity trading and risk
avoidance to access feedstocks from other sources. Tyson will also utilize its transportation
and logistics team, as well as its truck, rail and barge assets, to coordinate the
cost effective movement of the feedstocks to fuel production facilities.
Syntroleum’s research and development work, leveraging
its gas-to-liquid technology expertise, has already resulted in multiple patent
applications related to its Biofining™ technology for renewable feedstocks. The
company’s additional pioneering research has targeted an expansion into full biomass-to-liquid
fuel production, which could potentially incorporate cellulosic biomass, animal
waste and other organic materials.
The companies will each contribute
50 percent of the estimated $150 million dollar cost of the project over the next
two and a half years, with the primary contributions coming in fiscal year 2008
and 2009. Annual operating profits,
which are anticipated to begin in fiscal year 2010 for Dynamic Fuels, will be driven
by market fundamentals such as fuel markets, feedstock markets and government support,
and are forecast between $35 and $60 million.
To access a live audio broadcast of today’s news conference,
please go to
http://ir.tyson.com/ or dial
888-323-5256 and use the following
pass code: Tyson Foods. Questions from reporters
and analysts may be submitted before and during the news conference by e-mailing
questions@tyson.com. Additional information on the Tyson-Syntroleum venture can
be found at http://www.tyson.com/RenewableEnergy
or syntroleum.com.
About Syntroleum (NASDAQ:SYNM)
Syntroleum Corporation owns the Syntroleum® Process
for converting synthesis gas derived from biomass, coal, natural gas and other carbon-based
feedstocks, and the Biofining™ technology for converting animal fat and vegetable
oil feedstocks into synthetic liquid hydrocarbons. The Company plans to use its
technology to develop and participate in synthetic and renewable fuel projects utilizing
the Company’s technology in a number of global locations.
About Tyson Foods, Inc. (NYSE: TSN)
Tyson Foods, Inc. [NYSE: TSN], founded in 1935 with
headquarters in Springdale, Arkansas, is the world’s largest processor and marketer
of chicken, beef, and pork, the second-largest food production company in the Fortune
500 and a member of the S&P 500. The company produces a wide variety of protein-based
and prepared food products and is the recognized market leader in the retail and
foodservice markets it serves. Tyson provides products and service to customers
throughout the United States and more than 80 countries. The company has approximately
107,000 Team Members employed at more than 300 facilities and offices in the United
States and around the world. Through its Core Values, Code of Conduct and Team Member
Bill of Rights, Tyson strives to operate with integrity and trust and is committed
to creating value for its shareholders, customers and Team Members. The company
also strives to be faith-friendly, provide a safe work environment and serve as
stewards of the animals, land and environment entrusted to it.
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Forward Looking Statements
This document includes forward-looking statements
as well as historical information. These forward‑looking statements may include
statements relating to plans to use Syntroleum’s technology; commercialization of
that technology; costs, timing and production of fuels plants; job creation from
plants; fuel characteristics, benefits and uses; and the financial position of Tyson
and Syntroleum. When used in this document, the words “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “may,” “plan,” “project,” “should” and similar expressions are
intended to be among the statements that identify forward‑looking statements.
Although we believe that the expectations reflected in these forward‑looking
statements are reasonable, these kinds of statements involve risks and uncertainties.
Actual results may not be consistent with these forward‑looking statements.
Important factors that could cause actual results to differ from these forward-looking
statements include the potential that debt or equity financing for anticipated plants,
the schedule for development, construction and operation of proposed plants may
not be met, anticipated appropriation and expenditure of federal monies does not
occur, commercial-scale plants do not achieve the same results as those demonstrated
on a laboratory or pilot basis or that such plants experience technological and
mechanical problems, the potential that improvements to the Biofining™ technology
currently under development may not be successful, the impact on plant economics
of operating conditions (including raw material prices, tax credits and energy prices),
construction risks, risks associated with investments and operations in foreign
countries, dependence on strategic relationships with manufacturing and engineering
companies, volatility of energy prices, the ability to implement corporate strategies,
including the continued availability of adequate working capital, competition, intellectual
property risks, the ability to obtain financing and other risks described in each
company’s filings with the Securities and Exchange Commission.
Ò “Syntroleum” is registered as a trademark and service
mark in the U.S. Patent and Trademark Office
Contacts:
Gary Gamino
Syntroleum Corporation
(918) 592-7900
ggamino@syntroleum.com
Libby
Lawson
Tyson Foods, Inc.
(479) 290-3486
libby.lawson@tyson.com