Smithfield Foods, a US-based pork producer, has formed a strategic alliance with Argal Group, a Spanish packaged cold cuts company.
In this partnership, Smithfield will acquire a 50.1% stake in Argal, while the existing shareholders will retain the remaining shares. The collaboration is described as a “medium-term plan” and will involve joint management between the two companies.
Argal’s product portfolio includes charcuterie products such as cooked and cured ham, bacon, turkey, sausages, fuet, and pâté. Through this alliance, Argal will gain access to Smithfield’s European distribution channels and other assets, including a vertically integrated supply chain.
Smithfield currently operates across Europe, with various plants, hog processing sites, and corporate offices located in Poland, Slovakia, Hungary, and Romania.
Argal has production centers and distribution facilities in Catalonia, Navarra, Extremadura, and other parts of Spain. The company exports its products to over 30 countries through subsidiaries and distributors.
Antonio Escribá, Chairman of Argal, and CEO José María Orteu believe that Smithfield’s investment will enhance the company’s growth possibilities through internationalization, technological evolution, sustainability, and overall competitiveness. They also see the partnership as an opportunity for the professional and personal development of their team.
According to the statement, Argal expects to generate €440m ($468.8m) in revenue for the fiscal year 2023.
Luis Cerdan Ibanez, Executive Vice President of European Operations at Smithfield, states that this investment is aligned with the company’s strategy to strengthen its packaged meats portfolio in Europe. Ibanez praises Argal’s product quality, employees, and management team, seeing them as a solid platform for Smithfield’s growth in Spain and Europe.
In recent news, Smithfield’s US meat business announced the closure of its pork processing plant in Charlotte, North Carolina, which will affect 107 employees. Smithfield has been owned by China’s WH Group since 2013.
Smithfield’s investment in Argal Group is a significant move within the food and beverage industry. This partnership brings together the expertise of a US-based pork producer and a Spanish packaged cold cuts company, allowing both companies to leverage their resources and expand their market presence across Europe. The agreement is expected to drive growth for Argal through increased access to distribution channels and a vertically integrated supply chain. It also presents opportunities for the professional development of Argal’s team and strengthens Smithfield’s presence in Spain and Europe. This strategic alliance sets the stage for further advancements and collaboration within the industry.
