If you’ve ever enjoyed a delicious Smithfield ham, you might be curious about the company behind it.
Smithfield Foods is a Virginia-based pork producer and food-processing company that has been around since 1936. But did you know that the company was acquired by a Chinese firm in 2013 for nearly $5 billion?
This surprising purchase caused some lawmakers to wonder if there might be a hidden player. In this article, we’ll take a closer look at the ownership structure of Smithfield Foods and explore what this acquisition means for the company and its products.
So, who really owns Smithfield Ham Company? Let’s find out.
Who Owns Smithfield Ham Company?
Smithfield Ham Company is owned by WH Group, a Chinese multinational conglomerate. WH Group acquired Smithfield Foods in 2013 for nearly $5 billion, making it the largest Chinese acquisition of an American company at the time.
Before the acquisition, Smithfield Foods was a Virginia-based pork producer and food-processing company that employed over 40,000 Americans and partnered with thousands of American farmers. The company was founded in Smithfield, Virginia, in 1936 and had become the largest pig and pork producer in the world.
After the acquisition, Smithfield Foods became a subsidiary of WH Group, which is headquartered in Luohe, Henan province. WH Group is a publicly traded company with shareholders around the world and is known for its meat processing operations in China.
The History Of Smithfield Foods
The history of Smithfield Foods dates back to 1936 when Joseph W. Luter Sr. and his son, Joseph W. Luter Jr., opened the Smithfield Packing Company in Smithfield, Virginia. The company started as a small pork-packing plant and gradually expanded over the years through acquisitions and highly industrialized pig production.
Smithfield Foods grew significantly in 1981 with the purchase of Gwaltney of Smithfield, followed by the acquisition of nearly 40 companies between then and 2008. The company became known for its highly industrialized pig production, which involved confining thousands of pigs in large barns known as concentrated animal feeding operations and controlling the animals’ development from conception to packing.
As of 2006, Smithfield raised 15 million pigs a year and processed 27 million, producing over six billion pounds of pork and, in 2012, 4.7 billion gallons of manure. The company sold its products under several brand names, including Cook’s, Eckrich, Gwaltney, John Morrell, Krakus, and Smithfield.
In addition to owning over 500 farms in the US, Smithfield also contracted with another 2,000 independent farms around the country to raise its pigs. Outside the US, the company had facilities in Mexico, Poland, Romania, Germany, Slovakia, and the United Kingdom.
Smithfield Foods was acquired by WH Group (formerly known as Shuanghui International Holdings) in 2013 for nearly $5 billion. The acquisition made WH Group one of the largest overseas owners of American farmland with Smithfield’s 146,000 acres of land.
Today, Smithfield Foods is still headquartered in Smithfield, Virginia and is a subsidiary of WH Group. The company is led by Shane Smith who became the president and chief executive officer in July 2021.
The Acquisition By A Chinese Firm
The acquisition of Smithfield Foods by WH Group in 2013 raised concerns among some lawmakers about the involvement of the Chinese government in the deal. The purchase was surprising, as it valued Smithfield Foods at more than its market value, and made it the largest Chinese acquisition of an American company at the time.
WH Group, formerly known as Shuanghui International Holdings, is a multinational conglomerate that specializes in meat processing operations. It is headquartered in Luohe, Henan province, and has operations in China, Europe, and the United States.
The acquisition of Smithfield Foods by WH Group was seen as a strategic move to expand the company’s global reach and secure a steady supply of pork for China’s growing middle class. However, it also raised concerns about the impact on American jobs and food safety.
Since the acquisition, Smithfield Foods has faced criticism for its operations, including allegations that hogs are raised in the U.S. and sent to China to be slaughtered and packaged before coming back to the U.S. for sale. The company has also been in the news recently for shutting down plants in three states after a rash of coronavirus cases hit its Sioux Falls, South Dakota operation.
Despite these challenges, WH Group remains committed to its investment in Smithfield Foods and its operations in the United States. The company sees its ownership of Smithfield Foods as an important part of its global strategy and a key driver of growth in the years ahead.
Concerns And Controversies Surrounding The Purchase
The acquisition of Smithfield Foods by WH Group was not without controversy. Critics of the deal pointed out that the Chinese government has a heavy involvement, if not outright control, of the country’s industries. Some argued that “food security is national security” and expressed concern that American food processors being owned by China could pose a threat to national security.
Others raised concerns about the impact of the acquisition on American farmers and the environment. While Smithfield Foods products are still made in the U.S., the company exports a large amount of products to China, where pork consumption rates are much higher than in the U.S. This has led to exorbitant transportation costs and emissions from flying so much pork to China.
Moreover, some farmers and those affected by polluted water and air argue that by stationing all of the factories in the U.S., China gets the benefit of receiving pork without the pollution that comes from mass pork production. This puts the U.S. at a major disadvantage.
Despite these concerns, Smithfield’s CEO at the time of the acquisition, C. Larry Pope, assured customers that there would be no changes in how the company does business operationally in the United States and throughout the world. And according to one expert, Smithfield has done a better job of taking care of its problems under Chinese ownership than expected.
The Current Ownership Structure Of Smithfield Foods
Currently, Smithfield Foods is still a subsidiary of WH Group, and its operations are overseen by the conglomerate’s leadership team. Shane Smith is the current president and CEO of Smithfield Foods, taking over the position in July 2021.
Under WH Group’s ownership, Smithfield Foods has continued to expand its operations globally. In addition to its 500 farms in the US, the company has facilities in Mexico, Poland, Romania, Germany, Slovakia, and the United Kingdom. The company also contracts with over 2,000 independent farms in the US to raise its pigs.
Despite the ownership change, Smithfield Foods has maintained its brand names, including Cook’s, Eckrich, Gwaltney, John Morrell, Krakus, and Smithfield. The company has also stated that it does not import any products from China to the United States and that no Smithfield products come from animals raised, processed, or packaged in China.
Impact On Smithfield’s Products And Operations
The acquisition of Smithfield Foods by WH Group had a significant impact on the company’s products and operations. Prior to the acquisition, Smithfield Foods had facilities in the US, Mexico, Poland, Romania, Germany, Slovakia, and the United Kingdom. The company also owned over 500 farms in the US and contracted with another 2,000 independent farms around the country to raise its pigs.
Under WH Group’s ownership, Smithfield Foods continued to operate its facilities and farms in the US and around the world. However, there were concerns about the impact of Chinese ownership on American jobs and food safety. Some critics also raised concerns about the environmental impact of Smithfield’s highly industrialized pig production, which involved confining thousands of pigs in large barns known as concentrated animal feeding operations.
Despite these concerns, Smithfield Foods continued to produce and sell its products under several brand names, including Cook’s, Eckrich, Gwaltney, John Morrell, Krakus, and Smithfield. The company remained the largest pig and pork producer in the world and reported an annual revenue of $14 billion in 2016.
However, in 2020 Smithfield Foods made headlines for shutting down plants in three states after a rash of coronavirus cases hit its Sioux Falls, South Dakota operation. The plant employed 3,700 people and produced nearly 130 million servings of food per week. The closure of the facility had a significant impact on pork production in the US.
Despite these challenges, some experts have praised Smithfield Foods for its response to the coronavirus outbreak. According to one analyst quoted in a news article, “to some extent, Smithfield, under Chinese ownership, has done a better job of taking care of its problems than I thought it was going to at the time.”
Future Outlook For Smithfield Foods
The future outlook for Smithfield Foods under the ownership of WH Group is uncertain. The company has faced criticism for its highly industrialized pig production methods and the environmental impact of its operations. In recent years, Smithfield Foods has also faced challenges in California, where it is withdrawing from the market due to high costs and over-regulation.
However, Smithfield Foods remains a major player in the global pork industry, with facilities in multiple countries and partnerships with thousands of farmers. The company has also made efforts to improve its sustainability practices and reduce its environmental impact.
Under the leadership of Shane Smith, who became CEO in July 2021, Smithfield Foods may continue to focus on sustainability and innovation in the pork industry. However, it remains to be seen how the company will navigate challenges such as changing consumer preferences and regulations related to animal welfare and environmental impact.
