Neither Smithfield nor Butterball plans to leave North Carolina with the CEOs of both companies emphasizing that the Tar Heel State is a great location for both meat giants to do business.
Rumors began circulating that Smithfield would completely abandon North Carolina after the company announced on Oct. 9, 2023, that it would close its Charlotte pork processing plant and transfer production to its Tar Heel facility to better increase efficiency and better utilize existing capacity. Shane Smith, Smithfield’s CEO, said the pork giant is committed to remaining in North Carolina.
“We’re not going anywhere. We’ve been here a long time, and we’re committed to the state of North Carolina. I think what maybe the argument misses are what are the benefits of being in North Carolina. The U.S. industry needs to export about 30% of what it produces. We have a very, very established proximity advantage to the ports on the east coast,” Smith said in a panel discussion at the NC Chamber’s Ag Allies Conference held at North Carolina State University’s McKimmon Center in Raleigh Oct. 11.
Committed to NC long term
Smith said this proximity advantage provides Smithfield a real advantage over its competitors that do not have North Carolina operations. He said Smithfield is committed to North Carolina for the long term.
“North Carolina is home to our biggest asset base. Just in the last 10 years, we’ve invested, between the Tar Heel Plant and the Clinton plant, a little over $500 million. We’ve built new distribution centers; we’ve invested in technology; we invested in infrastructure. You don’t walk away from those things. If any of you are concerned about Smithfield being here for the long term, you shouldn’t be because we are committed to being here, and we’re not going anywhere else.”
Jay Jandrain, president and CEO of Butterball, stressed that the turkey giant, like Smithfield, is “very committed” to remaining in North Carolina. The company is headquartered in Garner. Jandrain said being based in North Carolina gives Butterball a significant advantage in the turkey business.
“We’re a partnership. Half of our partnership started with what was originally Carolina Turkeys in Mount Olive, N.C. Our roots are here. A tremendous amount of our infrastructure is here. You can’t just go and pick up and move a plant, and you can’t go and just find people to grow turkeys,” Jandrain said.
Both Jandrain and Smith said their companies try to buy as much local corn as possible to feed their animals. Jandrain said the strategy is not a one-sided equation to find ways to get input materials as quickly as possible. The goal is to efficiently grow animals and bring those animals to market with North Carolina being ideal for that goal with its workforce, geographic location, and farmers.
“We have a competitor in South Dakota, in the middle of corn and soybeans. The problem is there are also no people there. Labor is quite a challenge these days. A big part of their labor is immigrant labor, and they struggle with that. We have a very good situation in North Caroliana and don’t plan to leave,” Jandrain pledged.
‘Local people should run local businesses’
Smithfield’s Smith also discussed concerns raised about Smithfield becoming a Chinese-owned company when it was purchased for $4.7 billion in 2013 by the WH Group, a publicly traded company on the Hong Kong Stock Exchange.
“I would argue with anyone in here we’re more American now than we were in 2013. We are 35,000 people strong here in the U.S. Our supply entirely comes from the U.S. Our output is for the U.S. consumer. We work with thousands of U.S. farmers. None of that has changed. In fact, it has only gotten stronger,” Smith told Ag Alliance conference attendees.
“In the 10 years that we’ve been a part of the WH Group, we’ve invested $3 billion in our U.S. infrastructure. We’ve continued to focus on the philanthropic side of our business. We’ve invested $300 million in education, $500 million in hunger relief, and we’ve spent 100s of millions of dollars to bring our pension plans up to 95% fully funded,” Smith added.
“The WH Group has invested a tremendous amount of money in the U.S. infrastructure that is supporting U.S. agriculture. Our relationship with WH Group is just as it would be with any other investor, whether they or Canadian, European. We talk about the global business. They expect a return just like any other investor would,” he said.
“But it’s not a scenario where we take direction from. Our entire management team in the U.S. is American, our entire management team in Europe is European. The WH group believes local people should run local businesses.”
Smith said a major benefit of being part of the WH Group is access to the China market.
“The China market is the largest consumer of pork in the world. We’re sending stomachs, aortas, and intestines and heads and tails. I was actually in a debate with a congressman not too long ago. I told him I am more than happy to deliver a 40,000 container of aortas to his home. Just let me know where you want it shipped,” Smith said to laughter from the audience.
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