Smithfield Ferme, the farm division of the US-based Smithfield group, which posted turnover worth 100 million euros last year, will seal partnerships with small farmers in Timis county and neighbouring counties in order to support the company's development. It will use 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 in Timis, Arad, Caras, and Bihor county, 24 of them being in advanced stages. 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.
Mihail took over at the helm of Smithfield Ferme at the beginning of this year, after he left his positions as vice-president and chief executive of local spirits producer Prodal '94.
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.
"This type of partnership is widespread worldwide, while locally it has already been tried out by players on the diary market, such as LaDorna and Danone. It cannot have a negative impact on Smithfield's business," said Mihail.
American giant Smithfield, with a global turnover worth around 9 billion euros, has investments underway worth around 100 million euros 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 (381 million euros). By the end of this year, investments in Smithfield Ferme will amount to 500 million dollars (318 million euros).
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 the Banat area (Western Romania).
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