Smithfield Foods’ officials announce that the company will invest more than $800 million in Romania over the next five years.  The effort will involve buying companies and expanding packing plants with the goal of making the country a centerpiece of Smithfield’s European strategy.

Smithfield had been focusing on Poland by building business around its Animex subsidiary there. The company also has activities elsewhere in Europe, specifically the United Kingdom, France and Spain. Smithfield already is the largest pork producer and processor worldwide. It also has beef cattle businesses.

Joe Luter, Smithfield’s chief executive officer, has argued that Romania offers strong potential for pork production in Europe. He points out that in former communist countries, state meat companies are being sold at bargain prices. Also, labor, land and grain costs are more competitive there than in most other European countries.

Smithfield ventured into Romania last year when it bought the country's largest pork processor, Comtim Group SRL, for $83 million. Comtim is a small, vertically integrated company that raises about 200,000 hogs annually and has two slaughter facilities. According to reports, Smithfield will hold $55-million worth of contracts with 250 Romanian farmer to raise hogs.

Romania hopes to join the European Union in 2007, which would make export issues into other European countries much easier.