990542 Smithfield Agrees to Mexico Pork Joint Venture

Smithfield, VA - Smithfield Foods Inc. said it has agreed in principle to invest $24 million to form a joint venture to own and operate a vertically integrated pork processing business in Sonora, Mexico.

The Smithfield, VA-based company is the largest U.S. vertically integrated producer and marketer of fresh pork and processed meat, which means their business encompasses the entire cycle from raising the hog to meat on the plate. Its brands include John Morrell and Patrick Cudahy. Their pork is exported to such far-flung markets as Russia and Japan.

Smithfield Foods said in a statement it will have a 50% ownership interest in Agroindustrial Del Noroeste, which will own and operate fresh and processed meats company Grupo Alpro. The Mexican company's location in the state of Sonora fits Smithfield's strategic plan because of its proximity to California, Arizona and Texas, Smithfield noted.

Agroindustrial Del Noroeste will be managed by Jorge Mazon and Fernando Hernandez, who control and operate Grupo Alpro. Mazon and Hernandez have been engaged in hog production in Mexico for more than 20 years.

Grupo Alpro, which is certified by the U.S. Department of Agriculture for export to the United States, will operate in Hermosillo, Guadalajara, and Mexico City. The joint venture also will own a hog production company, Agrofarms, which will be the main source of hogs for Grupo Alpro's fresh meat operations. Grupo Alpro is Mexico's largest federally inspected hog processor.

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