Smithfield bets on small Romanian farmers

23-07-2008 | |

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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