SYSCO Corporation (NYSE: SYY) plans to invest $34.2 million at the I-275 Business Park in a distribution facility that will employ more than 300 people, Mayor Bill Haslam announced today.

 The new company is expected to be operational by the first quarter of SYSCO's fiscal year 2008 and will serve restaurants, hospitals, schools, colleges, retirement homes, hotels and other foodservice operations in eastern Tennessee and portions of Georgia, Kentucky, North Carolina, Virginia and West Virginia, the company stated in a national media release today.

Due diligence is currently underway, including geotechnical and environmental studies. The approximately 300,000-square-foot complex will include refrigerated, frozen and dry warehouse space, as well as administrative offices and a truck maintenance facility. SYSCO's operation will utilize all 44 acres the City of Knoxville owns in the I-275 Business Park and an adjacent 35 acres currently owned by Norfolk Southern. "SYSCO's plan to build a first-class facility that will provide high-quality jobs is great news for Knoxville," Mayor Haslam said. "SYSCO is a global leader in its industry that scores high marks on virtually every national business ranking published.

We welcome the company to our community, and look forward to working together as the project progresses."Foodservice customers in the market area are currently being served by SYSCO's operating company in Nashville, Tennessee, as well as SYSCO broadline operations in Atlanta, Georgia; Charlotte, North Carolina; Harrisonburg, Virginia; and Louisville, Kentucky. Richard J. Schnieders, SYSCO's chairman, chief executive officer and president, said, "The Knoxville fold-out will allow SYSCO to provide more localized service to our customers in that market, as well as in the markets of the existing SYSCO companies in Tennessee and surrounding states. Our growth in that region has been consistently strong, and with this new operation we expect to continue that trend." Mr. Schnieders added that the Knoxville operation is the 17th 'fold-out' announced by SYSCO.

The 'fold-out' concept involves the construction of a new distribution facility in a marketplace that contains an established sales base but is currently being serviced from a distant SYSCO company. In addition to the City of Knoxville, other organizations providing assistance to SYSCO include the Tennessee Valley Authority, the Knoxville Area Chamber Partnership, the state of Tennessee and Steven W. Wright Co. "We congratulate and wish SYSCO every success as they pursue growth opportunities at this major new Knoxville facility," said John Bradley, TVA Senior Vice President of Economic Development. "This is a win-win for the company and community that results from a team effort by our regional, state and local economic development entities." Tennessee Economic and Community Development Commissioner Matthew Kisber, said, "Sysco is a respected company within the food distribution industry and we are pleased that they have made Tennessee a pick for their new regional distribution center. Tennessee enjoys a positive business climate right now, and this project is a reflection of the momentum we've been building and the teamwork attitude that has helped make us successful in attracting projects." Mike Edwards, president and CEO of the Knoxville Area Chamber Partnership, stated, "When we began to market this property, Mayor Haslam and City Council asked us to focus on companies that would provide a great corporate presence at the entrance to Knoxville and great jobs and benefits in our community. SYSCO is the perfect fit.

 The teamwork among the individuals and organizations that worked to make this project happen has been outstanding." SYSCO is the global leader in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. Its family of products also includes equipment and supplies for the foodservice and hospitality industries. For the fiscal year 2005 that ended July 2, 2005, the company generated $30.3 billion in sales. For more information about SYSCO visit the company's Internet home page at www.sysco.com. Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include statements regarding continued growth in the Knoxville region, and the expected location, benefits, operations and timing for completion of any 'fold-out'. These statements involve risks and uncertainties and are based on current expectations and management's estimates; actual results may differ materially. Those risks and uncertainties that could impact these statements include the risks relating to the foodservice distribution industry's relatively low profit margins and sensitivity to economic conditions, SYSCO's leverage and debt risks, the risk of exposure to product liability claims, the risk of interruption of supplies due to lack of long-term contracts, work stoppages or otherwise, potential disruption of construction timetables, and other risk factors detailed in SYSCO's Form 10-K for the fiscal year ended July 2, 2005 filed with the Securities and Exchange Commission. In addition, the decision to pursue the Knoxville fold-out could be impacted by the results of the due diligence that is currently underway, including geotechnical and environmental studies.