Jim Rice (centre), General Manager of Tyson's business in China, takes part in the announcement of the new joint venture.

Jiangsu Jinghai will raise and process chicken under the Tyson brand for sale to consumers in eastern China.

Terms of the agreement were not disclosed, however, Tyson officials have confirmed the company will have a 70 per cent stake in the business.

Tyson and Jinghai will build a new, fully integrated poultry operation in Haiman City in the Jiangsu Province near Shanghai.

It will be called Jiangsu Tyson Foods and will include development of live chicken operations and a chicken processing plant.

The operation will produce fresh, retail packaged chicken products sold under the Tyson brand name.

"Demand for high quality, fresh chicken in China is growing faster than the existing domestic supply," said President and CEO Richard Bond.

"We intend to help meet this need by becoming the first producer to deliver brand name, high quality fresh chicken to consumers in the eastern China market."

The two companies plan to start work on the new processing plant as soon as Chinese government approvals are received and currently expect to begin operations in 2009.

The companies will also be working to finish a feedmill currently under construction and to establish modern chicken farming operations in the region to supply the plant.

"We believe Jinghai’s extensive experience in poultry breeding will provide the foundation needed to successfully build a network of live poultry operations," said Rick Greubel, international president for Tyson.

The joint venture will initially start by producing 400,000 birds per week with plans to eventually increase production to one million birds per week.

Products from the processing plant will be sold to retailers serving the Shanghai, Jiangsu and Zhejiang Provinces, which have a combined population of 139 million people.

Tyson already has a presence in China. The company has a joint venture poultry operation involved in producing further processed chicken, including chicken nuggets and popcorn chicken sold under the Tyson name. Tyson also has part ownership in a pork processing plant in China.