THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, October 27, 1995 TAG: 9510270509
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY LON WAGNER, STAFF WRITER
LENGTH: Short : 43 lines
Smithfield Foods Inc. completed Thursday the sale of $20 million in preferred stock to Sumitomo Corporation of America and extended until 2005 an agreement under which Sumitomo distributes Smithfield's pork products in Japan, the companies announced.
The deals are significant to Smithfield, which expects to sell about $100 million worth of its pork products in Japan this year, said Aaron Trub, company vice president.
``We sell in 24 countries, some in Russia, some in Eastern Europe, some in the Far East,'' Trub said, ``but basically Japan is our major export market.''
Smithfield Foods signed a three-year agreement with Sumitomo in April 1994, but Thursday the companies extended the exclusive distribution agreement for another 10 years.
Tsuneo Iwasaki, president of Sumitomo Corporation of America, said the first year and a half of working with Smithfield had resulted in ``vigorous growth of our fresh pork business in Japan.''
Smithfield will use the proceeds from the preferred stock sale to invest in additional hog production facilities and to continue its development of new breeds of hogs, Trub said.
The announcements continue an active month for Smithfield. Three weeks ago, the Smithfield-based company agreed to acquire Chiquita Brands International Inc.'s John Morrell & Co. meat processing operations for $58 million.
As the Sumitomo deal signals Smithfield's intentions to continue expanding internationally, the purchase of Midwest-based Morrell signals its intent to become a national pork producer. Smithfield already has a strong presence in the Southeast.
Wall Street reacted positively to Smithfield's announcement Thursday. The company's stock closed at 26 1/4, up 5/8 for the day. by CNB