View source for WH Group

{{Short description|Chinese multinational company}}
{{Undisclosed paid|date=April 2021}}
{{Use dmy dates|date=February 2023}}
{{Infobox company
| name = WH Group<br />万洲国际
| logo = WHGroup.png
| logo_size = 200px
| type = [[Publicly traded company|Public]]
| traded_as = {{ubl|{{SEHK|288}}|[[Hang Seng Index|HSI component]]}}
| foundation = {{start date and age|1958}}
| founder =
| location_city = [[Hong Kong]]<ref name=":0" />
| location_country =
| key_people = [[Wan Long (businessman)|Wan Long]] (Chairman)<ref name=Economist/>
| industry = Food
| products = Meat
| services =
| revenue = US$24.1 billion<ref name=":0" />
| net_income =
| num_employees = 101,000<ref name=":0" />
| divisions =
| subsid = Henan Shuanghui Investment & Development<br>[[Smithfield Foods]]
| slogan =
| homepage = [http://www.wh-group.com/ WH Group]<br/>[http://www.shuanghui.net/ Shuanghui Development]
}}
[[File:Shuanghui Ham Sausages (20200714133552).jpg|thumb|Shuanghui [[Ham sausage#China|ham sausages]] manufactured by Henan Shuanghui Investment & Development]]
'''WH Group''' ({{zh|c=万洲国际|p=Wànzhōu Guójì}}), formerly known as '''Shuanghui Group''' ({{zh|c=双汇集团|p=Shuānghuì Jítuán}}),<ref name=AP /> is a publicly traded Chinese multinational meat and food processing company headquartered in Hong Kong.<ref name=":0">{{Cite web|title=2019 Annual Report|url=http://media-whgroup.todayir.com/202004220141321708635820_en.pdf|date=2020-04-22|website=WH Group|access-date=2020-05-10}}</ref><ref name="about">{{cite web|title=WH Group: Corporate Profile|url=http://www.wh-group.com/en/about/operations.php|publisher=WH Group|access-date=22 April 2020|archive-date=27 April 2019|archive-url=https://archive.today/20190427200558/http://www.wh-group.com/en/about/operations.php|url-status=dead}}</ref> Sometimes also known as '''Shineway Group''' in English-speaking countries, the company's businesses include hog raising, consumer meat products, flavoring products, and logistics.<ref>{{cite news | title=China's Shuanghui in $4.7B deal for Smithfield | author=Paul Davidson | author2=Elizabeth Weise | work=[[USA Today]] | url=https://www.usatoday.com/story/money/business/2013/05/29/smithfield-foods-china-acquisition/2368671/| date=29 May 2013}}</ref> It is the largest meat producer in China.<ref name=AP2>{{cite news | url=https://www.yahoo.com/news/chinas-entrepreneurs-expand-global-presence-064616656.html | archive-url=https://web.archive.org/web/20200417042711/https://www.yahoo.com/news/chinas-entrepreneurs-expand-global-presence-064616656.html | url-status=dead | archive-date=17 April 2020 | title=China's entrepreneurs expand global presence | first=Joe | last=McDonald | agency=[[Associated Press]] | date=31 May 2013 }}</ref> <ref>{{Cite news |last=Interesse |first=Giulia |date=28 February 2023 |title=Investing in China's Meat Industry: Trends and Opportunities |url=https://www.china-briefing.com/news/investing-in-chinas-meat-industry-trends-and-opportunities/ |work=China Briefing}}</ref>
In 2021, WH Group ranked 3rd on FBIF's Top 100 Chinese Food & Beverage Companies list.<ref>{{Cite web| last1=Yang|first1=Tutu| last2=Gao|first2=Nana|date=2021-09-01|title=2021中国食品饮料百强榜|trans-title=Top 100 Chinese Food & Beverage Companies list|url=https://www.foodtalks.cn/news/foodnews/top_100/6831|access-date=2022-02-28|website=FoodTalks|language=zh}}</ref>
[[Wan Long (businessman)|Wan Long]] is the chairman and chief executive officer of WH Group.<ref name="Economist" /> [[Kenneth M. Sullivan]], the president and chief executive officer of [[Smithfield Foods]], became an executive director of WH Group in January 2016.<ref>[https://www.bloomberg.com/profiles/people/15415393-kenneth-marc-sullivan "Kenneth Marc Sullivan"]. Bloomberg.</ref>
==Operations==
Shuanghui has 13 facilities that produce more than 2.7 million tons of meat per year.<ref name=AP>{{cite news| url=https://www.cnbc.com/2013/05/29/shuanghui-buying-smithfield-foods-for-about-472-billion.html | title=China's Shuanghui buying Smithfield Foods for about $4.72 billion, taking company private | agency=Associated Press| date=29 May 2013 | access-date=2013-05-29 | author=Chapman, Michelle}}</ref> It slaughters more than 15 million pigs a year, but only raises about 400,000; the rest are purchased from suppliers.<ref name=Economist>{{cite news | title=Pigs will fly | url=https://www.economist.com/news/business/21578687-chinese-buyer-americas-biggest-pork-producer-pigs-will-fly |newspaper=[[The Economist]] | date=1 June 2013}}</ref> The company holds more than 500 [[patent]]s and produces 1,000 products.<ref name=about /> As of May 2013, [[Zhijun Yang]] is the managing director.<ref name=AP /> The company employs approximately 101,000 employees as of 2019,<ref name=":0" /> and is 30% employee-owned.<ref name=about/>
==History==
Shuanghui was founded by the [[Luohe]] municipal government in 1958 with a single processing plant. [[Wan Long (businessman)|Wan Long]] joined the plant in 1968, and became the plant's general manager by 1984.<ref name=":0" /> Under Wan, the company has expanded aggressively. In his first year, he turned around a struggling company, bringing it from a net loss to a net profit of 5 million yuan ($1.7 million).<ref name=AP2 />
In 1992, sausage sales fueled the expansion of the company which in turn resulted in investors from six countries founding Shuanghui International.<ref name="NIKKEIASIANREVIEWWHG">{{cite news|author1=Staff Writer|title=WH Group Ltd. (HK)|work=Nikkei Asian Review|url=https://asia.nikkei.com/Companies/WH-Group-Ltd.-HK|access-date=5 March 2020}}</ref>
The company introduced its first branded meat product to the market in February 1992. Later that year, Shuanghui formed a joint venture with 16 institutional investors from six countries.<ref name="about" /> In 1994, the venture was consolidated as Shuanghui Group.<ref name="forsale">{{cite news|url=http://www.chinadaily.com.cn/english/doc/2006-03/04/content_526484.htm|title=Henan meat processor Shuanghui up for sale|date=4 March 2006|work=China Daily|author=Zhang Lu|access-date=31 May 2013}}</ref> Shuanghui subsidiary Henan Shuanghui Investment & Development Company Limited ({{szse|000895}}) was established and listed on the [[Shenzhen Stock Exchange]] in 1998.<ref>{{Cite web|url=https://www.google.com/search?q=SHE:000895|title=SHE:000895 – Google Search|website=google.com}}</ref> In 2000, Shuanghui started a post-secondary educational-work research division.<ref name="about" />
By 2006, Shuanghui was the largest food processor in China by corporate valuation, and 131st largest company overall. The company was valued at $1.3 billion, and controlled more than 50% of China's high-temperature processed meat market at that time.<ref name=forsale /> That year, [[Luohe]] government sold its share of Shuanghui to a joint venture of [[Goldman Sachs]] and private equity firm [[CDH Investments]].<ref>{{cite news | title=Off the Chopping Block, Onward for Shuanghui | url=http://english.caixin.com/2010-12-09/100205937.html|access-date=17 May 2013 | newspaper=Caixin Online | author=Shen Hu | author2=Li Qing}}</ref> Goldman Sachs later sold most of its share, reportedly for a large profit,<ref name=Economist /> but owned 5.2% of the company as of May 2013.<ref name=banks>{{cite web | url=https://www.reuters.com/article/us-shuanghui-smithfield-idUSBRE94U0EB20130531 | title=Banks said to lend China's Shuanghui $7 billion for Smithfield deal | first1=Stephen | last1=Aldred | first2=Kane | last2=Wu | work=[[Reuters]] | date=31 May 2013}}</ref> Wan Long was appointed chairman of the company on 16 October 2007.<ref name=":0" />
In 2011, the firm set up a sales operation in Japan.<ref name="NIKKEIASIANREVIEWWHG" />
===Acquisition of Smithfield Foods===
In May 2013, Shuanghui announced its intention to buy [[Smithfield Foods]] for $34 per share, or about US$4.72 billion total. Including assumed debt, the total value of the deal was about $7.1 billion. The agreed purchase price represented a 31% premium over Smithfield's market price at the time when the deal was announced.<ref name=AP /> The two sides negotiated for four years prior to their agreement.<ref name=Economist />
Before it was finalized, the deal had to be approved by Smithfield shareholders and the [[Committee on Foreign Investment in the United States]].<ref name=AP /> It was ultimately approved by Smithfield shareholders on 24 September 2013, and the merger was to be completed two days later.<ref>{{cite news | url=http://www.ibtimes.com/smithfield-foods-shareholders-approve-47-billion-acquisition-chinas-shuanghui-1410564 | title=Smithfield Foods Shareholders Approve $4.7 Billion Acquisition By China's Shuanghui | first=Amrutha | last=Gayathri | work=[[International Business Times]] |date=24 September 2013}}</ref>
Smithfield CEO Larry Pope stated the deal would "[preserve] the same old Smithfield, only with more opportunities and new markets and new frontiers."<ref name=AP /> No Chinese pork would be imported to the United States, he stated, but rather Shuanghui desired to export American pork. There is a growing demand for foreign food products in China due to recent food scandals.<ref name=AP /> Smithfield's existing management team would remain intact and no major changes to its workforce would occur.<ref name=AP /> Analyst [[Derek Scissors]] said companies such as Shuanghui are "not looking to cause any trouble in the American market&nbsp;...They want to gain from what the U.S. is able to do."<ref name=AP /> China has been a net importer of pork since 2008.<ref name=Economist />
The deal was the largest ever takeover of a U.S. company by a Chinese company,<ref name=AP /> roughly doubling the number of US jobs tied to direct investment by China.<ref name=AP2 /> Smithfield ceased to be publicly traded at the deal's completion.<ref name=AP />
In July 2013, Shuanghui announced its plan to list Smithfield on the [[Hong Kong Stock Exchange]] after completing the takeover. The IPO was expected to see the firm valued at around $4 billion.<ref>{{cite news| url=https://www.reuters.com/article/us-smithfield-shuanghui-idUSBRE96F0BA20130717 | title=Exclusive: Smithfield's China bidders plan Hong Kong IPO after deal – sources | author=Saeed Azhar and Stephen Aldred | work=[[Reuters]] | date=16 July 2013}}</ref> However, the IPO plan was ultimately scrapped in 2014.<ref>{{cite news | url=https://www.wsj.com/articles/wh-group-scraps-hk-ipo-on-weak-demand-1398768671 | title=WH Group Failed to Heed Signals Before Scrapping IPO | work=The Wall Street Journal | author=Prudence Ho | date=29 April 2014}}{{subscription required}}</ref>
In January 2014, Shanghui International changed its name to WH Group, though one of its subsidiaries, Henan Shuanghui Investment & Development Company, retained the Shanghui brand.<ref>{{cite web|title=Corporate Profile|url=http://www.wh-group.com/en/about/profile.php|access-date=12 April 2017|publisher=WH Group}}</ref> The new name is derived from the initials of "Wanzhou Holdings," where the Chinese characters "wan" and "zhou" connote eternity and continents, respectively.<ref>{{cite press release|url=http://www.businesswire.com/news/home/20140121005322/en/Shuanghui-International-WH-Group|title=Shuanghui International Changes Name to WH Group|publisher=[[Business Wire]]|date=21 January 2014}}</ref>
In June 2015, Smithfield disposed of their 37% interest in Spanish meat processor [[Campofrío Food Group]], to the Mexican [[ALFA (Mexico)|Alfa Group]] for $354 million. The reason for the transaction given by CEO Larry Pope, was to improve Smithfield's balance sheet and allow cash reserves for strategic acquisitions aligning with long-term goals.<ref>{{Cite web|last=WH Group|date=3 June 2015|title=WH Group Announces Sale of Campofrio Stake for US$354 Million|url=https://www.smithfieldfoods.com/press-room/company-news/wh-group-announces-sale-of-campofrio-stake-for-us354-million|access-date=2021-04-14|website=smithfieldfoods.com}}</ref>
In 2016, WH Group's profits increased by more than 17 percent. This increase in profitability was primarily driven by the growth of Smithfield Foods.<ref name="SCMPPROFIT">{{cite news |last1=Ge |first1=Celine |title=WH Group less likely hit by a Trump trade war with China, says chairman |url=https://www.scmp.com/business/companies/article/2081204/wh-group-posts-17pc-jump-2016-profit-stronger-us-meat-sales |access-date=5 March 2020 |work=South China Morning Post |date=22 March 2017}}</ref>
In 2016, Smithfield Foods acquired California-based [[Clougherty Packing]] from [[Hormel Foods]] for $145 million. Numerous brands were included in the acquisition such as [[Farmer John]] and [[Saag's Specialty Meats]]. Clougherty had a large selection of pork products and a large sales network in the southwestern United States. Smithfield also acquired hog farms in [[Snowflake, Arizona]] with land tax $75,000 a year, California, and Wyoming as part of the deal.<ref name="CALIFORNIA">{{cite news |last1=Sito |first1=Peggy |title=WH Group agrees to buy California's largest pork processor for US$145 million |url=https://www.scmp.com/business/article/2048308/wh-group-agrees-buy-californias-largest-pork-processor-us145-million |access-date=5 March 2020 |work=South China Morning Post |date=22 November 2016}}</ref>
In 2017, Smithfield Foods acquired the remaining 66.5% of the equity in [[Pini Polonia]]. After the acquisition, it became wholly owned by Smithfield Foods. Pini Polonia has a slaughterhouse in [[Kutno. Poland|Poland]]. The firm also has facilities in Italy and Hungary. The deal included the acquisition of Pini Polska, Hamburger Pini, and Royal Chicken. The price paid was not disclosed.<ref name="NikkeiAsianReviewHo">{{cite news |last1=Ho |first1=Joyce |title=Meat supplier WH Group expands Europe presence amid Beijing's M&A curb |url=https://asia.nikkei.com/Business/Meat-supplier-WH-Group-expands-Europe-presence-amid-Beijing-s-M-A-curb |access-date=5 March 2020 |work=Nikkei Asian Review |date=15 August 2017}}</ref>
In late March 2020, WH Group announced that the spread of COVID-19 had a very limited impact on its operations and sales in the US and China. The company said 95% of its operations were back to normal.<ref name="profitsup">{{cite news |last1=Patton |first1=Dominique |title=China's WH Group, world's top pork processor, reports profit jump |url=https://www.reuters.com/article/us-china-whgroup/chinas-wh-group-worlds-top-pork-processor-reports-profit-jump-idUSKBN21B175 |access-date=16 April 2020 |work=Reuters|date=17 April 2020}}</ref>
==See also==
*[[Impact of the 2019–20 coronavirus pandemic on the meat industry in the United States]]
==References==
{{Reflist}}
==External links==
*{{official website|http://www.wh-group.com/html/index.php}}
{{Food companies of China}}
{{Hang Seng Index}}
[[Category:Food and drink companies established in 1958]]
[[Category:Companies established in 1998]]
[[Category:Food manufacturers of Hong Kong]]
[[Category:Intensive farming]]
[[Category:Chinese brands]]
[[Category:1958 establishments in China]]