International segment operating profit more than doubled to $108.2 million primarily on strong profitability in Romania, as well as the company's Polish hog production operations. Recessionary pressures and higher raw material costs continued to weigh on Campofrio's margins.
The company will continue to execute its strategic growth plan to improve its earnings stream and migrate Smithfield further towards a consumer packaged meats company. The fundamental tenets of this plan – as outlined last quarter – include the following:
- Increase capital investment to improve competitive cost structure and achieve least cost and best in class operations,
- Continue a higher level of investment in direct-to-consumer marketing programs to build brand equity and grow sales,
- Establish a culture of innovation to build strong product pipeline to drive packaged meats volume and margin,
- Emphasize hog production assets as strategic point of difference, and
- Pursue a diversified mergers and acquisitions strategy in packaged meats and value-added products.
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