Romania: pork giant bets on small farmers

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

Contracts
"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.

Classical Swine Fever
Although Classical Swine Fever (CSF) 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 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.

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

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.

Related websites:
• Smithfield Foods 

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