June 10, 2011
The US' Smithfield Foods Inc. (SFD) has announced a Memorandum of Understanding with China's Dandong Port Group to explore business opportunities in Northern China.
The deal was formalized during Governor Bob McDonnell's recent visit to Asia with a trade and economic development mission.
The two companies will hatch out new methods to boost business in China through extensive exchange of information and market studies thereby maximizing the assets of both the companies.
The MOU represents a commitment on the part of both the parties to explore opportunities for having a stronger partnership in trade with the goal to create new success stories.
The deal could, although not very significantly, augment Smithfield's efforts to further penetrate the growing pork market in China, already the world's largest pork consumer. As per the data collected by the US Meat Export Federation, China imported US$45.2 million worth of US pork during the first quarter of 2011, making it the fifth-largest destination for US pork exports.
Smithfield's entry into China dates back to 2007, when the Virginia based retail giant had signed an agreement with a major Chinese trading company for the purchase of 60 million pounds of Paylean-free pork.
China had banned pork imports from the US in April 2009 following the outbreak of swine flu. The country had delisted eleven US pork plants, being skeptical about the trace levels of Paylean, which had been found responsible for causing swine in 24 countries.
The ban, which lasted more than a year, slashed US pork exports to China in 2009 by about 40%. In May 2010, the country begun buying US pork again, but was restricted only to internal organs and other parts that suit the Eastern palate.
