October 11, 2013

 
Shuanghui may buy more pork from Smithfield

Shuanghui International, China's largest meat processor, plans to import more ractopamine-free pork from its new unit Smithfield Foods, the biggest pig farmer in the US.

Shuanghui received clearance last month for the US$4.7 billion acquisition, the biggest of a US company by a Chinese firm.

Wan Long, chairman of Shuanghui, said at a media briefing that the mainland firm plans to boost the production capability of its low-temperature products - including sliced ham and spiral hams - to two million tonnes of packaged meat next year from 1.8 million tonnes this year.

He said Shuanghui will leverage Smithfield's technology in processing food and its know-how in food-safety improvement and production efficiency.

For quite a number of years, mainland China has struggled with food safety issues ranging from melamine-tainted milk powder to the use of the controversial growth-promoting food additive ractopamine with animals to be slaughtered for their meat.

As demand for quality meat rises in China, the takeover combines Shuanghui's strength - its sales and distribution channels on the mainland - with a supply of raw meat from its counterpart in the US, where the demand for pork is decreasing.

Shuanghui will pay US$34/share to Smithfield, a 30% premium to the price of the US firm's publicly traded shares before the deal was announced.