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Tesco deal drives Smithfield's growth in Poland

by 5m Editor
24 August 2006, at 11:13am

POLAND - Smithfield expects to double sales from its Prima Farms Group in Poland. This financial year it intends to increase from 61,000 sows to 120,000 sows. Prima supplies Smithfield meat-trading company Animex, which is significantly increasing pork exports to United Kingdom - particularly Tesco, by Digby Scott.

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Animex has also entered into supply contracts with 1,600 Polish farmers through which it secures 50 percent of its livestock. Through these contracts, farmers can earn a bonus of up to 13 percent by supplying leaner, higher yielding EU-type pigs.

Animex has also opened 41 buying stations around Poland where approximately 14,000 smaller farmers can market their pigs. It has established feed, fuel, livestock and financing programs that allow the farmers to lower their costs, increase productivity, and get financial support that no bank or government program will provide.

Banks have begun lending money to farmers who have signed pig supply and finishing contracts with Animex and Prima. The contracts serve as security for the loans. The farmers are using the money to improve, expand and modernise their operations. As the Danish pig empire continues to decline, Poland looks set eventually to replace it as Europe's pork-discounter-in-chief.

There is growing concern among European pig producers about the destabilising effects of Poland’s continuing expansion of pigmeat production. Polish production increased a hefty 13 percent last year and is predicted to increase seven percent this year. Poland has lost much of its export market to Russia and this may result in a surge of cheap Polish pigmeat onto European markets.

ThePigSite News Desk

5m Editor