“We deeply regret having to close this facility,” said Joseph B. Sebring, president of John Morrell. “We recognize that layoffs and plant closings are difficult for everyone concerned. But at the same time, we believe this is a necessary business decision. The Sioux City plant is one of the oldest, most outdated and least-efficient plants in the Smithfield system.”
Mr. Sebring said the consistent quality of Morrell products is extremely important and is a daily priority. “We are constantly improving our facilities and equipment to ensure a safer, higher-quality product,” he added. “In this case, the Sioux City plant was constructed in 1959 and would require significant capital expenditures to outfit it with the next generation of pork-processing technology. In this adverse business environment, those capital needs simply cannot be met.”
The Sioux City plant's overall design limit Morrell’s operating and sales flexibility and its ability to produce value-added packaged meats products and maximize production throughput, he continued. “The refrigeration system is antiquated and inefficient and the plant lacks any significant refrigerated storage space,” Mr. Sebring pointed out.
Smithfield’s Sioux Falls, S.D.; Denison, Iowa; and Crete, Neb. pork plants have the capacity to partially absorb the number of hogs currently being processed at Sioux City and some of the Sioux City production will be transferred to those plants in the near term, the company said. This partial transfer of production capacity will not require the company to hire more employees.
All production contracts at Sioux City will be honored, the news release stated.