Smithfield consolidates central European base
market after buying up one of its biggest rivals and has also
expanded operations in Romania - pre-empting future EU enlargement.
Smithfield Animex already produces one the two most recognised brands in Poland, Krakus, and now it will own the other, Morliny, after purchasing local firm Morliny SA.
US-based Smithfield Foods bought a majority share in Poland's largest meat processor, Animex, back in 1999 and now believes its acquisition of Morliny, which has annual sales of more than €77.8 million, will create exciting new prospects in Poland and across Europe.
"The complimentary brands of Animex and Morliny, and the operating efficiencies between these two companies, make us the clear leader in the production and marketing of branded processed meats in this important market while continuing to enhance our export capabilities," said Animex president Morten Jensen.
And Smithfield Animex has another reason to be cheerful after making its second acquisition in Romania, buying the Comtim meat processing group in Timisoara. Comtim currently has about 10,000 sows producing 200,000 market hogs every year, but the facility has the capacity for 15,000 sows so there is adequate room for Smithfield to expand.
Expansion is certainly the plan for Smithfield, which paid a total of €64.5 million for the Polish and Romanian processors. "These acquisitions strengthen our presence to capitalise on marketing opportunities to develop the protein marketplace in Eastern Europe as these markets emerge," said Robert Sharpe II, president of international operations for Smithfield.
The company has also positioned itself to take advantage of further anticipated EU enlargement and the development of Europe as a cohesive market. Romania is currently on track to join the EU in 2007.
"By co-ordinating manufacturing and marketing advantages, we will be well-positioned as Europe continues to evolve toward one marketplace," said Sharpe.
If he is right, then Smithfield may be able to start mimicking existing success in the United States, where the company is the leading meat processor as well as the largest producer of hogs. Animex already has trading offices in a number of EU countries, including France, Germany, Italy and the UK.
But, there may be strong competition to Smithfield's aims, such as Polish meat processor Sokolow which is looking to raise exports after increasing net profit to €2.8 million in the first half of 2004, compared to €51,000 in 2003. Sokolow has recently been bought by food producers Danish Crown and HK Ruokatalo.
