Triumph Foods' plan to build a pork-processing plant in East Moline is an old idea with a new twist.
The company is owned by several large groups of pork producers. Producer-owned groups have had their own processing operations in the past, but few have had the strength to keep them going, said Iowa State University agriculture economist John Lawrence.
Triumph wants to build a 630,000-square-foot plant that would slaughter 8,000 hogs daily on 116 acres near 172nd Street North and Barstow Road in East Moline. It would bring up to 1,000 jobs and be a sister facility of a plant nearing completion in St. Joseph, Mo.
From what he knows of the company, Mr. Lawrence, who has written about Iowa's pork industry, believes Triumph's prospects "are quite good" for success.
"They have sufficient scale, the best technology and the appropriate size and professional management to do what it takes to be successful," Mr. Lawrence said.
Triumph's six major owner-groups are experienced commercial hog producers with 342,000 sows and the ability to bring 6.8 million hogs to market a year. The owners, all with Midwest operations, include The HANOR Family of Companies, Christensen Farms, New Fashion Pork, TriOak Foods, Eichelberger Farms and Allied Producers Cooperative, made up of more than 30 Midwest pork producers.
HANOR and TriOak Foods originally formed Premium Pork LLC and bought the intellectual property in the breakup of Farmland Industries, the largest U.S. farmer-owned cooperative.
Triumph's producers currently sell their hogs to all the processors in the industry, but that will change when the St. Joseph plant begins operating early next year, said Jerry Lehenbauer, Triumph's vice president of integrated business strategies. Triumph's owners are obligated to sell 4 million hogs to St. Joseph by the end of 2006, each in proportion to their investment.
Shawnee Mission, Kan.-based Seaboard Foods has a marketing agreement to sell and distribute the packaged pork. Seaboard will not supply hogs. Unlike Swift or some other pork processors, Triumph does not have its own meat brand.
Last year, Triumph penned a long-term agreement with a British firm to use its customized genetics program using both male and female pig lines. The genetics agreement gives Triumph the ability to produce high-quality pork with consistent traits for leanness, texture, color and intramuscular fat.
Genetics agreements are standard in the industry and do not set Triumph apart, Mr. Lawrence said. Such an agreement, however, is another example of what Triumph is doing right, he said.
While Triumph is new at meat processing, its owners have proven track records for raising hogs, Mr. Lawrence said. The corporate owners are known separately in the industry for their expertise in genetics, technology, etc., Mr. Lawrence said. Their plan to build a second plant before the first one is open was "ambitious," but an example of how well capitalized the group is, he said.
Triumph's more than $300 million investment includes about $140 million for the St. Joseph operation and another $135 million to $160 million for East Moline.
The company has the financial strength to install the latest technology in the St. Joseph plant and has promised the same for East Moline. The company is prepared to add more owners if the need arises, Mr. Lehenbauer said.
The management team has business-management and pork-processing experience. Chief executive Rick Hoffman is a certified public accountant with a work history with the former Peat Marwick, Mitchell & Co., now KPMG, Seaboard Farms and Dairy Farmers of America. Mr. Lehenbauer grew up on a farm, raised hogs for a short time, and was employed with Farmland Industries, the largest U.S. farmer-owned cooperative, before it filed bankruptcy in 2002.
Triumph's owners wanted their own processing plant to assure the long-term growth of their hog operations, Mr. Lehenbauer said. Many were selling their pigs on the open market, and, with a little more capital, they could control the whole hog production -- from birth to plate -- and protect their futures, he said.
The pork industry has mostly aging processing plants that will have to be closed or replaced over time. Triumph's Missouri plant is the newest in the industry.
A second plant was always in Triumph's plan because the owners have excess production capacity, Mr. Lehenbauer said. The company's growth will be tied to the demands of the market. Triumph will sell processed pork from East Moline to Japan and other emerging pork markets, probably in southeast Asia, Mr. Hoffman said.
U.S. pork sales to Japan and Mexico drove pork exports in 2004, according to Pork magazine. Pork consumption in the United States has increased 21 percent from 1987 to 2001, according to the Iowa Pork Producers Association. Last year, U.S. restaurants sold 183 million pounds of pork during checkoff-funded promotions, a 70 million pound increase from the previous year.
The United States is the second largest pork producer in the world and the No. 2 pork exporter in the world, IPPA said.
Major players in Triumph Foods
-- The HANOR Family of Companies: Founded in 1978, HANOR is one of the nation's largest pork producers. It has operations in seven states and more than 500 employees.
-- Christensen Farms: Founded in 1974 by two brothers as a small family operation, Christensen Farms is now one of the five largest pork producers in the United States, with operations in Minnesota, Iowa, Nebraska, South Dakota and Illinois.
-- TriOak Foods, Inc.: The company began operations in January 1951 as Oakville Feed & Produce. The company sold feed supplements to local farms and purchased their eggs and milk for resale to grocery merchants. The company is now an integrated agribusiness, producing the grain that feeds its contract hog operations.
-- Allied Producers: The producer cooperative originated with 10 family pork producers in Iowa, Nebraska, Kansas and Minnesota.
-- Seaboard Corp.: Seaboard is a diversified, international agribusiness and transportation company primarily engaged domestically in pork production and processing, and cargo shipping. Overseas, Seaboard is primarily engaged in commodity merchandising, flour and feed milling, sugar production and electric power generation.
The genesis of Triumph Foods
-- March 2003: A group of major hog producers organized a limited-liability company, Premium Pork LLC, to build a pork-processing plant.
-- June 2003: Premium Pork bought the intellectual property of Triumph Pork Group LLC and the "Triumph" name.
-- December 2003: Premium Pork changed its company name to Triumph Foods LLC.
-- January 2006: Triumph's first pork-processing plant is scheduled to start operations in Missouri.
-- 2007: Possible construction start of Triumph's pork-processing plant in East Moline.
-- Early 2009: Possible start-up of proposed East Moline plant.
Sherrard, IL Details
|(More Print Ads)|