Smithfield Beef Group and ContiGroup Companies To Build New Beef Processing Plant

OKLAHOMA, US - New Venture Will Create 2,500 to 3,000 Jobs in Oklahoma.
calendar icon 18 October 2006
clock icon 3 minute read

Smithfield Beef Group, Inc. and ContiGroup Companies, Inc. today announced an agreement in principle to form a 50/50 joint venture to build a new, state-of-the-art beef processing plant in Texas County, Oklahoma, that will create 2,500 to 3,000 jobs.

Construction of the plant, which will be the first of its size in more than 20 years in the United States, is expected to begin in January 2007, with completion scheduled for mid- 2008. The parties plan to equip the new 650,000-square-foot facility with the most efficient and state-of-the-art operational and food-safety processes in the industry. Cost of the project is estimated to be approximately $200 million.

The Texas County plant is expected to process 5,000 head per day at full capacity. The new facility will likely draw employees from nearby communities.

“We reviewed more than 30 potential locations in five states, met with local economic development and agricultural leaders, and visited a short list of ten potential sites before deciding that Texas County is ideally suited for our new facility,” said Richard V. Vesta, president and chief executive officer of Smithfield Beef Group.

“We selected Texas County because of its proximity to nearby feedyards, the availability of water supply, the area’s outstanding labor pool and well-developed utility and transportation infrastructures,” Vesta said. “We also received tremendous cooperation from the state’s elected and appointed officials.”

“We expect to source cattle for the plant from the plentiful nearby supply of livestock including the surrounding Five Rivers feedyards, which we believe will save considerable transportation expense,” said Vesta. “Access to these cattle also will be valuable in terms of traceability, an increasingly important issue in the United States and in export markets. There have been many accomplishments and improvements in food safety and processing technology since the last large-scale beef processing plant was built more than 20 years ago. With this new, modern facility, we will be the technological leader in the industry,” he said.
“We have the utmost respect for the management of ContiGroup and we are delighted to have them as a partner in this venture,” Vesta said. “The decision to build the new plant demonstrates Smithfield Beef Group’s commitment to providing our customers with the high-quality products they expect and deserve.” Vesta and a core team from Smithfield Beef Group will oversee Smithfield’s investment in the joint venture.

“We are pleased to participate in this venture with Smithfield Beef Group, building on our relationship that started with the formation of Five Rivers,” said Paul J. Fribourg, chairman and chief executive officer of ContiGroup Companies, Inc. “Smithfield is committed to be an ‘agent of change’ in the beef industry. Joining with them in this new venture will permit us both to move farther up the value-added chain,” he said.

“We are very excited about the prospect of more than 2,500 new jobs in Texas County,” said Terry Peach, Oklahoma’s commissioner and secretary of agriculture. “Smithfield Beef Group and ContiGroup’s former cattle feeding business have been major contributors to the local communities in which they operate and we are looking forward to their becoming valued members of our business community.”

In May of 2005, Smithfield Foods, Inc. and ContiGroup Companies, Inc. formed Five Rivers Ranch Cattle Feeding LLC, a joint venture between their respective cattle feeding businesses, MF Cattle Feeding, Inc., formerly a subsidiary of Smithfield Beef Group, and ContiBeef LLC, formerly a subsidiary of ContiGroup Companies. Five Rivers is a stand-alone operating company, independent from both ContiGroup Companies and Smithfield Foods.

Vaughn, Coltrane, Pharr & Associates, Inc. of Tucker, Georgia, an engineering and architectural firm with extensive experience in the meat processing industry, has been retained as the lead design engineering firm for the project.

Smithfield Beef Group, Inc., a subsidiary of Smithfield Foods, is headquartered in Green Bay, Wisconsin and is the nation’s fifth largest beef processor. The company was established in 2001 and is made up of three divisions—Moyer Packing Company, Packerland Packing Company and Sun Land Beef. For more information, please visit News Desk

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