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Smithfield to Cut Hog-Feed Additive to Boost Exports to China

Smithfield Foods Inc., the world’s largest hog producer, said it will reduce the use of a feed additive that makes pork leaner as it seeks to win more business in China.

The U.S. company, acquired by Hong Kong-based Shuanghui International Holdings Ltd. in a $4.7 billion deal last month, has the capacity to ship “large quantities” of ractopamine-free pork to China, Chief Executive Officer C. Larry Pope said in an interview yesterday in Hong Kong. China bans the use of the additive.

Smithfield’s takeover by Shuanghui, the largest Chinese purchase of a U.S. company, will “certainly boost exports” to the Asian nation, Shuanghui Chairman Wan Long said in the same interview. Shuanghui will promote Smithfield products and brands to Chinese consumers, Wan said.

Wan also said the company had “no specific plan” for a stock exchange listing.

About 40 percent of Smithfield’s production is ractopamine-free, Pope said. “We have the ability to expand that,” he said.

While Smithfield’s exports to China have been mostly offal, parts shunned by U.S. consumers, the company will boost exports of higher-priced cuts of meat, Pope said. ‘

“The merger’s objective is to go beyond the offal into the muscle meat,” he said, adding that the company has been selling prime cuts to Shuanghui for nearly a year.

The purchase drew criticism from some U.S. lawmakers who raised concerns that it may transfer food-safety issues from China to the U.S. The bid for Smithfield underscores the increased demand for meat, particularly pork, from China’s expanding middle class.

To contact the reporter on this story: William Bi in Beijing at wbi@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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