Smithfield Foods Inc. / SFD

About Smithfield Foods Inc.

200 Commerce St., Smithfield, Va. 23430
www.smithfieldfoods.com | 757-365-3000 | Founded: 1962

Industry: Manufacturing | Category: Top Companies Headquartered in Virginia

The company had a challenging 2005, largely because of the ways in which its subsidiaries handle and process hogs.
In February, Smithfield subsidiary Carroll's Foods Inc. agreed to pay $39,000 in penalties for environmental violations at four of its farms. The violations were discovered just before Smithfield Foods pledged in May to spend about $3 million on improving the quality of its farms, the treatment of its animals, and how it contains and disposes of hog waste. Keira Ullrich, a Smithfield spokeswoman, said the violations were discovered while Smithfield was modernizing its plant.
In January of this year, Smithfield agreed to new environmental measures at its 275 hog facilities in North Carolina as part of a settlement to a lawsuit filed by Waterkeeper Alliance, a grass-roots environmental group led by Robert F. Kennedy Jr. Smithfield agreed to implement new measures to stop hog manure from polluting local waterways. Smithfield has tried to improve its environmental performance after a Virginia federal judge fined the company $12.6 million for environmental negligence.
"Our formalized training programs, compliance assurance programs and environmental management systems, which are in place throughout our subsidiaries, work together to identify and correct any violations that are identified, and to ensure that appropriate corrective actions are in place to prevent similar violations in the future," Ullrich said.
As the company deals with its environmental issues, Smithfield executives continue to wrestle with declining market prices for hogs. In December, Smithfield said that its hog prices were 10 percent below previous-year levels. Analysts said one of the reasons for the decline in hog prices was the overabundance of domestic chicken production, stemming from the fear of European chicken products linked to possible Avian flu.
Despite the company's struggles, Smithfield continues to enlarge its operations. In January, Smithfield agreed to buy ConAgra Food Inc.'s Cook's ham business for about $260 million. To grow the beef side of its business, Smithfield's subsidiary MF Cattle Feeding, Inc. in February entered into a joint venture cattle feeding business with ContiGroup Cos.' ContiBeef LLC. In December, Smithfield announced a $213.5 million expansion project at its facilities in Nebraska, Iowa and South Dakota, a move the company said should create some 679 jobs. In January 2006, the company began shutting down its 70-year-old Valleydale Foods pork-processing plant in Salem, Va., which eventually will cost 300 jobs.
As the company expands, it is also focusing on staying ahead of the latest trend: precooked bacon. Smithfield is planning a 50 percent increase in its precooked-bacon processing capacity, and will add six new products in that category, Smithfield said in its latest annual report. The company also plans to build what it called one of the world's largest precooked-ham plants within the next 18 months.

Chairman: Joseph W. Luter III

2005 Financial Data

Revenues: $11,354,200,000 | Net Income: $296,200,000
Asssets: $5,704,800,000 | Earnings Per Share: $2.64
Total employees: 51,290 | Local employees: None