Category: Food Industry

How OSI Group Uses its Firm Strategic Plans to Expand its Operations Globally

Since 1909 when Otto & Sons started as a small butchery and later re-branded to OSI Group in 1975 as an international company, many events have taken place to date. The stepping-stone of the company’s expansion took place in 1955 when Otto & Sons took the mandate of supplying McDonald’s restaurants. The deal was sealed through the agreement of Otto & Sons and Ray Kroc, the restaurant’s owner. The business flourished, and they opened a branch in Chicago in 1973. Other expansions were made in Germany and Utah before the company re-branded to OSI Industries in 1975. Not long after, the company’s long-term consultant, Lavin Sheldon became a partner, and OSI came into existence. Under his control as the Chief Operations Officer with the help of David McDonald the President, the company operates in around 17 countries.

Significant acquisitions done by OSI Group include the purchase of Chicago’s Tyson Food plant in 2017. The plant specializes in poultry production, but OSI aims at extending to other products too. In Europe, OSI Group took over the operations of Flagship Europe. The deal was reached on December 2016 with the aim of Improving sandwich, sauces, and dips to name but a few. The company does not only make more acquisitions but also improves the existing plants to improve production. One such move took place in Toledo Spain. The company invested heavily in expanding its poultry production plant, which would enable the double production of poultry production from 12,000 tons to 24,000 tons annually. The plant, which also produces pork and beef, would reach a total output of 45,000 tons of the entire product annually. The move was taken to handle the rising demand for these products from Portugal and Spain markets.

In line with the desire to achieve high productivity in the plant, OSI invested in new measures of reducing electricity cost. The heat produced by refrigerators and production systems would be recycled and retained heat water in the newly installed reservoirs. Additionally, refrigeration was improved, Nitrogen facility introduced, and for quality, a kitchen testing facility was added run by product development manager. To counter meat and other snack demands in Germany and Netherlands, OSI acquired Baho Foods. Through the existence of Baho Foods in over 18 countries in Europe, OSI Group was sure the acquisition was an added advantage in its operations. Baho Foods has five subsidiaries across Europe, and OSI Group would use them to improve its expansions in the European market.

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OSI Food Solutions: Expanding to Serve the World

From its start in 1909, in Aurora, Illinois, as Otto Kolschowski’s neighborhood meat market, OSI Food Solutions has grown to over 65 food processing facilities employing more than 17,000 people worldwide. With the demand for fast-food poultry products greater than ever before, supplying consumer demand for chicken nuggets and patties led OSI to double its worldwide production capacity for poultry. The company bought the former Tyson Foods plant in Chicago, increasing its ability to meet the demands of Burger King, McDonald’s, Papa John’s Pizza, and Starbucks coffee houses.

In 2017, OSI Food Solutions spent $20 million to increase poultry production at their facility in Toledo, Spain. Processing capacity doubled from 12,000 tons per year to 24,000 tons. The newly expanded poultry production line joins in increasing total production at the plant to 45,000 tons of beef, pork and chicken products, along with the 20 new jobs added to the existing 140 employee workforce. According to the Managing Director of OSI Spain, Jose Maria del Rio, demand for poultry nuggets and patties has grown 6 percent a year for the decade preceding three years ago, and 8 percent a year since. He declared that OSI Food Solutions in Spain anticipates a continued growth in demand and intends to be ready to meet it.

The OSI Spain expansion adds over 22,000 square feet of building space and an additional 20 employees. This includes new shipping, receiving, and production areas, as well as an employee social area. OSI President David McDonald added that the expansion allows OSI to support the growth of long-term customers as well as adding new items to their product line. The new high-efficiency equipment allows the expanded plant to use 20 percent less energy than before. To further increase their European presence, OSI Food Solutions bought out Dutch company Baho Foods, which expanded their reach into Germany and the Netherlands.

With OSI Food Solutions expansions and acquisitions, the company has positioned itself to supply future demand.

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