Governor Bob McDonnell announced that Virginia-based Smithfield Foods, Incorporated and China's Dandong Port Group have reached a memorandum of understanding (MOU) to explore business opportunities in the rapidly growing market of northern China. The relationship was formalized by the signed MOU achieved during the Governor's recent trade and economic development mission to Asia.
Dandong, which is located in the Liaoning Province, owns and operates major port and infrastructure assets throughout northern China, and Smithfield is the world's largest pork processor and producer. The two companies will examine ways to grow the business alliance through exchange of information and market studies aimed at maximizing the assets of both companies. China is the world's largest consumer of pork, and the need for high quality imported product is increasing. During the first quarter of 2011, China imported more than $42 million worth of U.S. pork.
"I'm pleased that my administration's discussions with Dandong throughout this year ultimately led to Dandong and Smithfield formalizing this MOU during our recent marketing mission to Asia," said Governor McDonnell. "This strategic partnership will serve both companies in the future: Smithfield gains an important strategic ally in a rapidly developing region of China, and Dandong will serve as the regional hub for supplying the needs of this region as well as other countries in northeast Asia. As we work to market Virginia around the world, it is our goal that more deals like this one will be reached, leading to greater exports of high-quality Virginia products to growing markets."
"On behalf of Smithfield, I want to thank Governor McDonnell and his team for promoting Virginia agriculture during their recent trade mission to Asia and in previous international marketing missions," said Joseph W. Luter IV, Executive Vice President of Smithfield Foods, Incorporated. "By making increased agricultural exports a priority of his economic development agenda, Governor McDonnell is expanding opportunities for the state's top industry."
An MOU describes an agreement between two or more parties that sets in motion future business between the parties. The MOU executed on the Governor's recent trade mission represents a commitment from the parties to explore opportunities for partnership in trade with the intent of generating mutual, new and improved business.
"Increasing agricultural exports is vital to providing more economic opportunities for our producers, processors, and shippers," said Secretary of Agriculture and Forestry Todd P. Haymore, who participated in the recent marketing mission to Asia with Governor McDonnell. "Governor McDonnell has made clear that my top priority is to work closely with our private sector partners to help them find new export opportunities. I'm hopeful that this MOU and other discussions we're having with foreign customers will grow our exports and improve Virginia agriculture's standing in the global marketplace."
In 2010, overall agricultural exports from Virginia reached $2.24 billion, the second highest total in history. China was the second largest export market for Virginia's agricultural products, with shipments valued at almost $195 million. A significant portion of Governor McDonnell's trade and economic development mission to Asia was aimed at growing Virginia's agricultural and forestry exports to China, Japan, and South Korea. Governor McDonnell and Secretary Haymore met with almost two dozen current or potential new customers of Virginia's agricultural exports during the 11-day trade and economic development mission.
Agriculture and forestry are Virginia's largest industries, with a combined economic impact of $79 billion annually: $55 billion from agriculture and $24 billion from forestry. The industries also provide approximately 500,000 jobs in the Commonwealth.