USA – Smithfield Foods has announced the acquisition of a Nashville, Tennessee-based dry sausage facility from agri-food giant Cargill in a financial deal whose terms are yet to be disclosed.
The acquisition is set to significantly enhance Smithfield’s production capacity, adding an impressive 50 million pounds per year to support its well-known dry sausage brands: this includes Margherita, Carando, and Armour.
This expansion aligns with Smithfield’s strategy to grow its value-added packaged meats segment.
Smithfield, a subsidiary of China’s WH Group, emphasized that this purchase will not only increase its production capabilities but also strengthen its market position in the rapidly growing dry sausage category.
The company plans to extend formal employment offers to the approximately 160 current Cargill employees, ensuring continuity in their roles with no changes to their base pay.
Additionally, Smithfield has committed to providing a comprehensive benefits package that includes medical coverage and a free-tuition program.
The transaction is anticipated to be finalized by the end of July.
Steve France, Smithfield’s president of packaged meats, highlighted the strategic importance of the acquisition, stating, “This deal underscores our dedication to expanding our packaged meats business by meeting and exceeding our customers’ expectations. Dry sausage is one of our fastest-growing segments, and acquiring this facility from Cargill will enable us to enhance sales, drive volume, and increase our capacity to deliver high-quality products to various sectors including foodservice, industrial, and retail.”
This move comes as WH Group Ltd., the parent company of Smithfield Foods, reported a 37% increase in operating profit for the first quarter, reaching US$501M, despite a decline in revenue and sales volumes.
The significant improvement in its US operations was a key factor in offsetting the performance decline in its home market of China.
Following the announcement, shares of WH Group saw a rise of up to 3.5% before stabilizing.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. HERE
