News 224 views last update:6 Aug 2012

Smithfield bets on small Romanian farmers

Smithfield Ferme, the Romanian farm division of the US-based Smithfield group, will seal partnerships with small farmers in Romania to support the company's development.

Smithfield uses a business model commonly used on foreign markets, but also promoted in Romania by dairy producers.

"We currently have 50 contracts in various stages of negotiations with small farmers. Under this partnership, Smithfield provides the expertise, the technology and the raw materials, while farmers handle the investment part, and access structural funds. Ultimately, Smithfield buys the livestock reared by the farmers," said Bogdan Mihail, general manager of Smithfield Ferme.

He added that the project was dedicated to farmers and that 8,000 pigs could be reared per production cycle.

Although swine fever affected the business of the American group last year, company representatives say production outside their farms does not incur the risk of the disease returning; a disease that cost the Americans 11.5 million euros in 2007.

American giant Smithfield, with a global turnover worth around €9 billion, has investments underway worth around €100 million on the local market, in the construction of new farms and in the modernisation of old ones, as well as in the construction of a feed mill.

This is part of the overall investment conducted by Smithfield on the Romanian market so far, worth 600 million dollars (€381m). By the end of this year, investments in Smithfield Ferme will amount to 500 million dollars (€318m).

Smithfield is involved in pig rearing, as well as agriculture and livestock feed. The farm division of the American group owns 10,000 hectares of land and has rented plots that cover another 10,000-15,000 hectares in Western Romania.

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