Smithfield was founded in 1936 as a meat-packing plant in Virginia; it is currently a multi-million dollar industry and the nation’s number one producer of pork products. The idea that China, with its history of producing tainted products, may take over this American company is alarming. Hopefully, political pressure can stop the Smithfield deal which will face the scrutiny of the Committee on Foreign Investment in the United States, or CFIUS, a government panel that assesses national security risks.
China’s Shuanghui International plans to buy Smithfield Foods Inc (SFD.N) for $4.7 billion to feed a growing Chinese appetite for U.S. pork, but the proposed takeover of the world’s No. 1 producer has stirred concern in the United States.
The transaction, announced on Wednesday, would rank as the largest Chinese takeover of a U.S. company, with an enterprise value of $7.1 billion, including debt assumption.
As it stands. the deal is the biggest Chinese play for a U.S. company since CNOOC Ltd offered to buy Unocal for about $18 billion in 2005. The state-controlled energy company later withdrew that bid under U.S. political pressure.
PROMISE OF NO DISPLACEMENTS
In the town of Smithfield, which the local visitors bureau describes as rich in “hams, history and hospitality,” officials said they were shocked by the news.
“It was a total shock to us,” said Smithfield Mayor T. Carter Williams, who noted that his wife has worked for the company for a decade. “Right now, I don’t think anybody here knows what’s going to happen…the people in China say nothing is going to change. We would hope so.”
Demand for U.S. meat in China has risen tenfold over the past decade, fueled in part by a series of embarrassing food safety scandals, from rat meat passed off as pork to thousands of pig carcasses floating on a river. Public anxiety over cases of fake or toxic food often spreads quickly.
Shuanghui itself became embroiled in a scandal over tainted meat two years ago, when it was forced to recall its Shineway brand meat products from store shelves on fear that some of it contained a banned feed additive called clenbuterol.
In that respect, the Smithfield deal may help quell Chinese concerns over the use of ractopamine, a similar additive commonly used by U.S. hog producers to bulk up animals with muscle instead of fat, without increasing the amount of feed.
(please read the entire article)
And today from Fox News:
Fire raged through a poultry plant in northeastern China on Monday, trapping workers inside a cluttered slaughterhouse and killing at least 119 people, reports and officials said.
Several dozen people also were hurt in the blaze in Jilin province’s Mishazi township, which appeared to have been sparked by three early morning explosions, the official Xinhua News Agency said. The provincial fire department, on its microblog, attributed the blasts to a leak of ammonia, a gas that is kept pressurized as part of the cooling system in meat processing plants. (continued…)
Bold – my emphasis: we prefer Hickory Smoked over ammonia; just sayin 😉