Smithfield will be owned by a Chinese company

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ces1948
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2013/06/02 14:51:00 (permalink)

Smithfield will be owned by a Chinese company

I read a story yesterday that Smithfield was being bought by the Chinese. I'm not sure why but this upset me. A lot of the story was about Smithfield, Va where the company is headquartered. In addition to having the oldest ham in the nation on display it seem most of the residents of the town either currently work or have relatives that work at the Smithfield plant. There were some typical "things aren't going to change" statements from the current ownership along with "We have to be a part of the global economy" etc but how long will it be before they decide they can produce these hams elsewhere cheaper.
I've never been to the town but it sounds like nearly the whole town revolves around Smithfield.
Here's the story:
http://www.timesnews.net/...ponders-foreign-buyout
#1

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    kland01s
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    Re:Smithfield will be owned by a Chinese company 2013/06/02 15:20:48 (permalink)
    It trickles down. This is an abbreviated article from my local paper. You have to free register to read the whole thing.
     
    http://www.kcchronicle.co...eat-processor/artu10a/
     
     
     
    #2
    ChrisOC
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    Re:Smithfield will be owned by a Chinese company 2013/06/02 17:25:27 (permalink)
    In the modern hi-tech world, traditions are dropping like leaves in the fall.  I think I'll go watch Fiddler on the Roof.
    #3
    Cosmos
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    Re:Smithfield will be owned by a Chinese company 2013/06/02 21:50:06 (permalink)
    I can't get too excited about this. Smithfield has the image of the small town ham maker but its a huge conglomerate, the type I tend to avoid buying food from in the first place.
    http://topics.nytimes.com...ex.html?inline=nyt-org
    #4
    DawnT
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    Re:Smithfield will be owned by a Chinese company 2013/06/03 01:33:24 (permalink)
    I too can't really get up in arms over this. I can't speak specifically about Smithfield, but most of the  meatpacking industry has displaced American workers for lower waged immigrants that they've even housed in some cases to attract them at wages that couldn't otherwise support a family. I have no idea about Smithfield, but the deal with the chinese makes for some interesting questions. First and foremost, why do they want a meat processor and physical plant in the states? China needs pork, and specifically pork belly. Why aren't they going after pig farminging/pork production in the states? Smithfield is a processor. Unless they also have a large vested interest in farming, there's really nothing a processor here in the states has to their home market advantage even if they took the plant down lock, stock,and barrel and shipped it over there. Nothing there that can't be duplicated in China and the home market has little interest in the types of products market here. Their insatiable demand for pork has driven market prices up already and one of the prime reasons we're paying over $6 for a package of bacon. Buying Smithfield makes as much sense as an italian or spanish company buying Oscar-Mayer from Kraft unless the buyers are truly interested in diversifying their portfolio and looking to invest outside of their country for economic reasons. Witness the buying spree in totally unrelated markets that some of the chinese electronics and high tech companies are making fearing an implosion of their primary product market. Lenovo last I heard is investing heavily in real estate. Should tell you something about their vision for the future computer market. It doesn't take a genius to realize that china's roll is coming to an end with higher labor prices, inshoring, lack of trust by foreign companies, our economy's slowdown and now Europe's. Internally lots of unemployment and infrastructure going to waste or unfinished. They're pretty spread thin with a global economy slowing down, their profitable companies are probably looking to invest elsewhere before their economy tanks.
    #5
    Foodbme
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    Re:Smithfield will be owned by a Chinese company 2013/06/03 01:42:50 (permalink)
    Smithfield Foods is a $13 BILLION dollar company despite it's folksy, little smokehouse in the woods image and has struggled financially lately.
    When the Chinese buy Tyson and Con Agra then they'll have us by the pocketbooks and the shopping carts 
    #6
    Foodbme
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    Re:Smithfield will be owned by a Chinese company 2013/06/03 01:52:28 (permalink)
    It is a world economy. American companies are realizing that in order to survive in the near future they must develop sales outside the USA. The demographics of the population of the USA prove that the US Consumer Market is declining.
    95% of the worlds consumers are outside the US.
    There's all kinds of studies that show that small to medium sized US businesses that have started developing international business are having greater success than those who are not. The easiest place to start is Mexico & Canada because of NAFTA.
    #7
    6star
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    Re:Smithfield will be owned by a Chinese company 2013/06/03 09:47:30 (permalink)
    The AP article today on the disastrous fire at the chicken-processing plant in China mentions the Smithfield plant:
     
    "The fire highlighted the lax safety standards at many Chinese workplaces, despite efforts to compel improvement through regular inspections and fines.
     
    It could also focus renewed scrutiny on China's biggest pork producer, Shuanghui International - unrelated to the poultry plant - as it aims to buy U.S. food giant Smithfield in what would be China's biggest takeover of an American company."
    #8
    DawnT
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    Re:Smithfield will be owned by a Chinese company 2013/06/03 09:58:26 (permalink)
    From what I've read since I posted is that the fed's review of the sale was more concerned with Smithfield's vast land holdings possible proximity to military bases and sensitive govt. installations. Also their IT/internal data network as a possible foreign cyber intelligence asset in the CONUS.
     
     
    #9
    tmiles
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    Re:Smithfield will be owned by a Chinese company 2013/06/05 05:55:40 (permalink)
    Foodbme

    It is a world economy. American companies are realizing that in order to survive in the near future they must develop sales outside the USA. The demographics of the population of the USA prove that the US Consumer Market is declining.
    95% of the worlds consumers are outside the US.
    There's all kinds of studies that show that small to medium sized US businesses that have started developing international business are having greater success than those who are not. The easiest place to start is Mexico & Canada because of NAFTA.


    I read that a major reason was food safety. Chinese people don't trust Chinese produced food, or the government to fix the problem. In this purchase they buy a brand name AND systems. Look to Smithfield to quickly become a major producer of Chinese pork, in China, for sale to Chinese consumers.  
    post edited by tmiles - 2013/06/05 05:57:00
    #10
    CajunKing
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    Re:Smithfield will be owned by a Chinese company 2013/06/10 17:00:44 (permalink)
    Not if the Midwest has anything to say about it they wont.
     
    Several midwest states have laws regulating the ownership of farm land in their states.
     
    Smithfield owns large amounts of farm land in the midwest, so therefore if the Chinese firm does try and buy them out they will be facing stiff penalty and fines.
     
    It would make more sense to buy the company, spin off the smithfield land holders as its own new corporation and keep it American owned and run, then proceed with their plans.
    #11
    tmiles
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    Re:Smithfield will be owned by a Chinese company 2013/06/28 11:25:09 (permalink)
    It looks like fun times in the pork biz. There are now more outstanding lean hog futures outstanding than cattle futures, for the 1st time ever. Lots of "smart money is moving into pork. In my opinion, look for a future bubble. Unlike beef (cows have only 1 calf per year), the pig population can quietly balloon, up to the point where, suddenly, all the "smart" money wants "out".
     
    In the meantime, if pork sausage becomes too expensive, I like turkey sausage too......
    #12
    MetroplexJim
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    Re:Smithfield will be owned by a Chinese company 2013/06/28 14:08:28 (permalink)
    Ho, hum.
     
    History repeats itself; 25 years ago the Japanese were "buying America" with some spectacular purchases including Rockefeller Center and Pebble Beach.  These two properties were subsequently re-purchased by Americans at huge discounts.
     
    In a few years, Altria will probanly buy Smithfield in a like manner.
    #13
    tmiles
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    Re:Smithfield will be owned by a Chinese company 2013/07/03 17:01:41 (permalink)
    I read that productivity is key too. Smithfield produces about 50 times the pork per man-hour as in China, which still produces pigs on small farms, and kills in small slaughter houses. Even if Chinese workers are making $5 per hr and US workers $40, the math works. If Chinese management can duplicate Smithfield productivity and quality control in China, it will be a home run. They may still have paid too much, though. A few $mil would buy consulting from experts, to build a "Smithfield" from the ground up in China. Either Jim is right, or the existing US Smithfield, alone is worth the price. I doubt that I'll be here in 25 yrs to see. If I am here in 25 years, though, I will not notice......
    #14
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