Romania: Smithfield estimates that 2021 will be a development year

Smithfield Group, the largest pork producer in Romania, growing about 1,3 million pigs per year, plans to invest in increasing the number of pigs, and in developing new innovative products, with added-value, based on the market demand, according to company representatives.

"We are starting with optimism the new year, in which we hope for a return to normalcy in the second half of the year, once the COVID-19 pandemic threat is removed thanks to the population's vaccination campaign. (...) 2021 will be for us a development year, throughout the production and capitalization chain of our integrated system. We intend to increase both the number of animals delivered by our farms, and the volume of 100% Romanian pork products", stated for ZF Goran Panici, general manager of Smithfield Romania.

Smithfield Romania is part of Smithfield Foods Inc., a company active in pork production and food processing, based in Virginia, United States of America, and owned entirely by WH Group, from China, with over 40.000 employees worldwide, according to the data on the group's website. The company on the local market reported in 2019 a turnover of 1,24 billion lei (262 million euros), an increase by 43% compared to the previous year, according to data from the Ministry of Finance.

The group has been present in Romania since 2004, when it bought the former COMTIM plant in Timișoara, that two decades ago was the largest pork processing plant in South-Eastern Europe, and Agrotorvis company. After taking over the Romanian companies, Smihtfield invested 600 million dollars both in animal breeding capacities and in the technologization of the slaughterhouse.

It currently owns 47 farms in Timiş and Arad counties, with over 2.300 employees, and has developed an integrated business model, operating with the farms division, the fresh meat division and Elit, a sausage producer that entered the portfolio in 2019.

"We are counting on maintaining the domestic demand in the context of the African swine fever (ASF) epidemic that has plagued many traditional pork exporters globally. It will be a challenging year, in which we rely on increasing production and sales, a year in which our products will reach as many Romanian households as possible.", says Goran Panici.

He claims that the increase in the number of ASF outbreaks affects directly the company's activity, but until the authorities solve the problem they have taken measures to limit the spread of the virus and to restrict the transport of animals between farms or to the slaughterhouse. "For our industry, the swine fever will continue to be a major challenge and to put immense pressure on production companies, which have to maintain the investments in special epidemiological safety and security systems and measures.“

The manager hopes that the HoReCa sector will return to normal as soon as possible, so that it can positively influence consumption and demand increase in this market segment.

In 2018, the last year for which there are data, Romania was the champion of pork consumption in the EU, with 77 kg of carcass meat per capita, according to INS data.

"For many companies, 2021 will mean regaining the economic balance, resolving the tensions accumulated in the last year, generated by the pandemic. In the context of a desirable legislative and fiscal predictability, at a global level we hope to return this year to a business level close to the one before 2020. We want this year, 2021, to bring more positive results", said the general manager of Smithfield.

As for the company he represents, he says it will reach the intended growth and it will maintain the leading position of pork production in Romania, but provides no figures. Smithfield is "fighting" on this market with the Danes from Premium Porc, and with the Romanian-Danish shareholding company Danbred.

Article published in the print edition of Ziarul Financiar