Hormel, Herdez To Expand Mexican-Food Distribution JV
DOW JONES NEWSWIRES
Hormel Foods Corp. (HRL) and Mexico's Herdez del Fuerte SA de CV said Friday
they will expand on their current joint venture to market Mexican foods in the
U.S.
Hormel Chairman and Chief Executive Jeffrey M. Ettinger said the deal will
diversify the processed-meat maker's product portfolio and allow it to expand in
the Mexican food category.
The meat industry, like many others, has been reeling from declining demand
and oversupply, forcing producers, processors and supermarkets to cut production
and prices.
The companies have had a joint agreement since 1995 to market the Mexican
brands - including Chi-Chis, La Victoria and Dona Maria - but said this 50-50
joint venture would "significantly expand" their pact. The joint venture, to be
called MegaMex foods, will have initial revenue of about $200 million, the
companies said.
"The collaboration should allow us to better serve both the growing U.S.
Hispanic population and the vast numbers of the general population who love
Mexican food," Ettinger said.
Herdez del Fuerte Chairman Juan Marco Gutierrez Wanless said the deal will
combine his company's products with the manufacturing and distribution strength
of Hormel.
The organization of MegaMex is expected to be completed around Oct. 26, to
coincide with the start of Hormel's new fiscal year.
Hormel's shares closed Thursday at $34.35 and haven't traded premarket.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; kerry.grace@
dowjones.com
(END) Dow Jones Newswires
06-19-090804ET
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