Associated Press//July 28, 2011
//July 28, 2011
WILMINGTON, Del. — Korea’s largest poultry producer said it plans to continue running Allen Family Foods’ existing plants and buy from the company’s contract growers as it uses its knowledge of Asian markets to expand operations.
Harim Group announced Wednesday that its Harim USA, Ltd. affiliate was buying nearly all of the assets of the nearly 100-year-old Delaware company.
Harim Group Chairman Hong Kuk Kim said the deal will allow his company to enter the global food market in the United States and to build on Allen’s history as an industry leader.
“Through our knowledge of Asian consumer preferences, we plan to expand product offerings to include premium, value-added products that can be sold throughout the United States and Asia,” the chairman said in a statement. “We also look forward to maintaining strong relationships with the local communities and customers where Allen operates, and to help establish stronger and more efficient operations in those markets.”
Korea is experiencing increased demand for poultry.
Koreans traditionally have eaten more pork than any other meat, but demand for chicken and other poultry products has been rising since the introduction of fast-food, fried chicken franchises in the 1980s and 1990s, and more growth is expected, according to the United States Department of Agriculture’s Economic Research Service.
Korean media, meanwhile, say the country’s success in the World Cup soccer tournament also helped increase Korean’s appetite for chicken, which is often served at homes and bars during big matches.
Deal expected to close soon
That’s good news for employees of Seaford, Del.-based Allen, which filed for bankruptcy protection earlier this year. The company has about 2,400 employees in facilities in Delaware, Maryland and North Carolina.
Harim said it is paying about $48 million plus the value of the company’s inventory, which has not been determined. The company said a bankruptcy judge in Wilmington indicated at a hearing Wednesday that he would approve the deal, which is expected to close in the coming weeks.
Allen cited rising feed prices, operational mistakes and a cut in its credit line for the decision to seek bankruptcy reorganization. Harim outbid another Delaware company, Mountaire, at an auction Monday.
Charles “Chick” Allen, whose grandfather founded the company 92 years ago, told The (Wilmington) News Journal that he entertained Harim’s chairman for about two hours at his Seaford home two weeks ago.
“We talked about the company and what they would like to do. Very nice people,” Allen said. “Keeping the operations open, people employed and growers’ houses full of chickens have been ongoing major concerns to the family throughout this difficult process.”