Identity Swap for Smithfield's New Chinese Boss

BEIJING (TheStreet) -- This week's decision by Smithfield Food's parent Shuanghui International to recast its identity with a new, more innocuous name -- WH Group -- has set the stage for what could be an initial public offering by the Chinese company later this year on the Hong Kong Stock Exchange.

A marketing makeover might also help American consumers forget the largest U.S. pork processor is now a subsidiary of a Chinese meatpacker with a checkered food-safety record.

"The renaming underscores the company's aspirations to solidify its leading position in the global pork industry, offering consumers worldwide animal protein products meeting high standards in quality, taste, variety and safety," the company said in a Tuesday press release that pictured the new WH logo alongside the old Shuanghui symbol.

Last September, in the largest-ever Chinese takeover of an American company, privately held Shuanghui bought out Smithfield's shareholders for US$ 4.72 billion. It also assumed about US$ 2.38 billion in debt.

According to Chinese media, WH is hoping to raise up to US$6 billion through a Hong Kong IPO as early as April.

Smithfield's new owner promised no major changes for the Virginia-based producer and seller of bacon, ham and other pork products under several brand names including Gwaltney, Armour and Farmland. Plans call for selling more Smithfield products in China, the world's leading pork-eating nation.

But critics of the buyout have pointed to China's years of food safety problems, including a Shuanghui scandal that rocked the country three years ago, and potential risks for American consumers.

In March 2011, the company admitted selling meat products from pigs fed the illegal, growth-enhancing drug clenbuterol. China's state broadcaster CCTV exposed the case, forcing company CEO Wan Long to publicly apologize with a humiliating bow to media cameras.

Wan, who has managed the formerly state-owned meatpacker since 1985, said in the latest press release that the name change "to WH Group reflects the increasingly global reach of our operations, which combine the largest pork production companies in China and the United States, and cater to consumers globally."

WH wants to increase U.S. pork exports to Asia, the statement said, by building "a global trading platform" and while "exploring opportunities to work with Smithfield to develop premium products for the Chinese market."

The press release also took great pains to explain the derivation of the new corporate name. WH is an abbreviation of Wanzhou Holdings, it said, and Wanzhou combines the Chinese words "wan" meaning "eternity" and "zhou" which translates "continent."

The Chinese character for "wan" used in the name Wanzhou is the same character found in Wan Long's name.

A fresh company logo complements the new name by depicting four white swirls representing the world's four major oceans separating five red areas representing the world's biggest continents, the press release explained. WH also launched a new corporate Web site.

For English speakers, obviously, the neutral-sounding name WH will be far easier to pronounce than the company's old Chinese title "Shuanghui."

The word "shuanghui" is a derivation of the expression "where two rivers meet." It refers to the company's and Wan's hometown Luohe, a Henan Province city of slaughterhouses located at the convergence of the Sha and Li rivers.

-Written by Eric Johnson in Beijing

At the time of publication the author had no position in the companies mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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