Insurance Keeps Costs From Fire at Wisconsin’s Smithfield Foods in Check

July 15, 2009

Smithfield Foods Inc. said Tuesday that fire damage at its Patrick Cudahy meat plant in Cudahy, Wisconsin, should not have a measurable affect on its earnings or liquidity.

Partial production has resumed in areas of the plant not damaged by the fire. The plant makes bacon, sausage, ham and sliced meats.

“The company does not believe that the fire will have a material adverse effect on its results of operations, financial condition or liquidity in fiscal 2010,” Smithfield said in a Securities and Exchange Commission filing.

The fire broke out July 5 and caused extensive damage to a portion of the plant, but there were no injuries to employees. The plant employs about 1,900 and is among the top three U.S. producers of precooked bacon.

Patrick Cudahy is a wholly owned subsidiary of Smithfield Foods and, in the past, the unit has had in excess of $450 million in annual revenue.

Smithfield said there will be modest costs related to deductibles under available insurance policies, as well as other one-time costs, but they are not expected to be material.

Additional details regarding the fire will be released with the company’s fiscal 2010 first quarter earnings release, which is scheduled for Sept. 8, Smithfield said.

Smithfield is the largest U.S. hog and pork producer with fiscal 2009 revenues exceeding $12 billion and is based in Smithfield, Va.

(Reporting by Bob Burgdorfer; editing by Andre Grenon)

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