Smithfield subsidiary to close Iowa hog processing plant

John Morrell & Co., a subsidiary of Smithfield Foods, will permanently close its hog processing and fresh meat fabrication plant located in Sioux City, Iowa, effective April 20, 2010.

The Sioux City plant processes hogs and produces boneless loins and other fresh pork products.

Joseph Sebring, president of John Morrell, said the plant is one of the oldest, most outdated and least efficient plants in the Smithfield system.

The plant would require significant investments to outfit it with new processing technology, and those capital needs cannot be met in this adverse business environment, said Sebring.

He said the plant's design, layout and footprint also severely limit operating and sales flexibility, and the ability to produce value-added packaged meat products and maximise production throughput. The refrigeration system is antiquated and inefficient and the plant lacks significant refrigerated storage space.

The company said that three other Smithfield plants - located in Sioux Falls, South Dakota; Denison, Iowa; and Crete, Nebraska - have the capacity to partially absorb the number of hogs that are currently being processed at Sioux City and that it will transfer some of the Sioux City production to those plants in the near term.

The Sioux City plant closure will affect approximately 1,450 employees.

Smithfield has no further plans for plant closures in the foreseeable future.