Seaboard Corporation
Address:
9000 West 67th St.
Shawnee Mission, Kansas 66202
U.S.A.
Telephone: (913) 676-8800
Fax: (913) 676-8872
http://www.seaboardcorp.com
Statistics:
Public Subsidiary of Seaboard Flour Company
Incorporated: 1928 as Rodney Milling
Employees: 9,763
Sales: $1.26 billion (1999)
Stock Exchanges: American
Ticker Symbol: SEB
NAIC: 311611 Animal (Except Poultry) Slaughtering; 11221 Hog and Pig Farming; 483111 Deep Sea Freight Transportation; 52313 Commodity Contracts Dealing; 311211 Flour Milling; 311119 Other Animal Food Manufacturing; 311812 Commercial Bakeries; 111219 Other Vegetable (Except Potato) and Melon Farming; 322223 Plastics, Foil, and Coated Paper Bag Manufacturing; 49313 Farm Product Warehousing and Storage; 221112 Fossil Fuel Electric Power Generation
Company Perspectives:
Seaboard Corporation is a diversified and vertically integrated agribusiness and ocean transportation company. Our goal across all of our business lines is to provide exceptional value to our customers.
Through diversity in geographic regions and business segments, we are well positioned to take advantage of a robust U.S. economy and the dynamic changes taking place overseas.
Key Dates:
1918: Flour broker Otto Bresky purchases a mill in Atchison, Kansas.
1928: Bresky purchases Rodney Milling and incorporates his business under that name.
1938: Ismert-Hinke Milling is acquired.
1950: Company purchases Consolidated Flour Mills.
1959: Company merges with Hathaway Industries, Inc.; name changes to Seaboard Allied Milling.
1960s-70s:Company builds flour mills in eastern and southeastern United States.
1966: First foreign investment is made in Ecuadorian flour mill.
1982: Company sells U.S. milling operations to Cargill, Inc.; name shortened to Seaboard Corporation.
1984: Seaboard purchases Central Soya's poultry division.
1990: Seaboard buys pork processing facility from Cornbelt Meats, Inc.
1996: New pork processing operation opens in Oklahoma.
2000: Company sells poultry interests to ConAgra, Inc.
Company History:
Seaboard Corporation is a diversified company whose largest business consists of pork production for domestic and foreign consumption. Seaboard and its subsidiaries also sell commodities such as grains and seeds, process citrus fruit and seafood, grow sugar cane, make wine, generate electrical power, mill flour and animal feed, and ship cargo between the United States and points south. The company was a leading poultry producer until January 2000, when it sold this operation to ConAgra for $375 million. Seaboard is publicly traded, but 75 percent of its shares are held by the Seaboard Flour Company, which is owned by heirs of founder Otto Bresky.
Origins
Seaboard traces its roots to the early part of the 20th century. Company founder Otto Bresky started out in 1916 as a flour broker, buying his own mill in Atchison, Kansas, two years later. In 1919 he purchased the Imperial Brewing Company of Kansas City and converted it to a milling operation. Bresky's company became known as Rodney Milling in 1928 when he purchased a company of that name, which he then incorporated under. Gradual growth continued over the next three decades, with purchases of Ismert-Hinke Milling in 1938 and Consolidated Flour Mills in 1950.
In 1959 Rodney Milling merged with Hathaway Industries, Inc. and became a publicly traded company. The newly united firms took the name of Seaboard Allied Milling Corporation. Seaboard soon began expanding, following a strategy of building flour mills near populous areas in the East and Southeast. The first of these was completed in 1962 in Chattanooga, Tennessee, with another built in 1966 in Jacksonville, Florida. Also in 1966, the company initiated its first overseas venture, investing in a flour mill in Guayaquil, Ecuador, in conjunction with Continental Grain Company. Shortly after this more moves were made abroad, with mills built in Freetown, Sierra Leone, in 1968 and Georgetown, Guyana, a year later.
Back in the United States, Seaboard built a mill in Culpepper, Virginia, in 1970 and enlarged it just two years later. The year 1973 saw founder and patriarch Otto Bresky step down from a leadership role after more than half a century with the company. His son, Seaboard President Harry Bresky, took the reins of the still largely family-owned concern and kept it on its course of expansion. The 1970s saw more mills built in New York, Louisiana, Liberia, and Nigeria, and the expansion of businesses in Ecuador and Liberia. The company also purchased a mill in Tennessee and an Ecuadorian animal feed company, and opened another feed plant in Nigeria. Seaboard capped the decade with construction of a new corporate headquarters in Merriam, Kansas.
In the face of increasing competition, the company made a dramatic strategic shift in early 1982 when it sold its American flour mills to Cargill, Inc. for $40 million. Its name was also shortened during the year, to Seaboard Corporation. The company was now preparing to move in new directions, and soon founded a subsidiary, Seaboard Marine, Ltd., to ship goods between the United States and Central and South America. Two baking companies in Puerto Rico were also purchased at this time.
Moving into Poultry
At the beginning of 1984 Seaboard entered the poultry business with the purchase of Central Soya's poultry division, which consisted of three facilities located in the southern United States. The processing plants, in Athens and Canton, Georgia, and Chattanooga, Tennessee, had a combined capacity of 400 million pounds of broiler chicken per year. A year later Seaboard added more by acquiring Elberton Poultry of Georgia. The company continued to grow overseas during the mid-1980s as well, building a new polypropylene bag factory in Nigeria and a shrimp farm in Honduras.
Seaboard also was taking advantage of the capacity of its Marine division by shipping produce from Central and South America to the United States. To expand this operation, the company purchased a Miami-based produce distributor and several farming operations in Central America.
During the latter half of the 1980s the company expanded several of its poultry processing facilities and constructed a new plant in Mayfield, Kentucky. Seaboard also moved into other areas at this time, forming a joint venture to raise Atlantic salmon near Maine and starting a Bermuda-based subsidiary to run a power-generating barge near the Dominican Republic. In 1990 the company purchased a recently closed pork and lamb processing facility owned by Cornbelt Meat, Inc. The 650,000-square-foot Albert Lea, Minnesota plant utilized a workforce of more than 750. Seaboard received financial assistance from the city to reopen the plant, and union workers also accepted lower wages in order to return to their jobs.
Focusing on Pork
As it had done with poultry, Seaboard quickly began to invest in the business of processing pork. The company built a feed milling and pig feeding operation in Colorado in 1991, and the following year broke ground on a pork processing facility in Oklahoma. Seaboard would also soon build a feed mill and facilities for production of some two million hogs per year in that state. As had been the case in Minnesota, the company received numerous financial incentives to locate its operations there. Overseas, the company also bought additional flour mills in Puerto Rico and Zaire in 1992.
In 1994 Seaboard announced the closing of its Minnesota pork plant, which it later would sell to Farmland Foods. The company also settled a four-year-old shareholder lawsuit which charged that majority stockholder Seaboard Flour had profited unfairly from certain business dealings with Seaboard Corporation. The settlement stipulated that the Bresky family-owned company pay Seaboard $10.8 million, plus $2 million in legal fees.
After months of delays, Seaboard's new state-of-the-art pork processing facility in Guymon, Oklahoma, was opened on January 6, 1996. The $110 million plant was capable of processing four million hogs annually when it was in full operation. At least 1,160 workers would be utilized, spread over two shifts. The plant was so large that it required expansion of hog production capacity throughout the region. Hogs were to be grown in Kansas, Colorado, and Texas, as well as in Oklahoma. Half were produced by Seaboard, with a quarter from farms under contract to the company and the rest from outside suppliers. The company also secured a $9.5 million tax-exempt loan from the state of Kansas to build 26 hog waste lagoons. The loan, which had been obtained through a loophole in a law that banned state assistance of corporate hog farming, caused an uproar among state legislators.
Seaboard was doing well with pork, and the following year announced plans to set up a second large facility in Kansas, one which could also process four million hogs per year. Unlike many of its competitors, Seaboard sold a significant amount of pork abroad, more than triple the industry average of seven percent. The company was the leading supplier to Japan, which purchased almost half of all U.S pork exports.
Continuing Foreign Expansion
Seaboard continued to seek other opportunities overseas, and purchased an interest in Ingenio y Refineria San Martin del Tabacal S.A. of Argentina, a grower and processor of sugar cane and a grower of citrus fruit. Investments were also made in a flour, cookie, and pasta company in Mozambique and flour mills in Haiti, Lesotho, and Angola. Other international moves in the mid- and late-1990s included the acquisition of controlling interest in Bulgaria's leading wine producer, which had formerly been nationalized, and the purchase of a Zambian milling company. Seaboard also sold its flour milling and baking businesses in Puerto Rico and, in the United States, bought a stake in a seafood processing venture in Maine in partnership with Continental Grain Co.
In November 1998 the notoriously publicity-shy Seaboard was the subject of a lengthy article in Time magazine that claimed the company had received $150 million in 'corporate welfare' during the 1990s. Time alleged that Seaboard actively sought the biggest handouts, and had abandoned the Albert Lea, Minnesota pork plant, which devastated that city financially, when it found a sweeter offer in Oklahoma. Rick Hoffman, CEO of the company's Seaboard Farms subsidiary, responded by telling the Associated Press that, 'There were no programs that Seaboard solicited by the state that did not already exist for other new businesses.' He also declared that much of the money Time claimed was earmarked for Seaboard did not in fact benefit the company.
Seaboard and other large animal processors were also being criticized by organizations such as the National Audubon Society and the Sierra Club for causing pollution, making the areas surrounding their facilities unpleasant to inhabit, and reducing the size of important wetlands in the plains states. The company's foes cited an $88,000 fine Seaboard had paid to Oklahoma for improper disposal of hog carcasses as evidence of its wrongdoing.
In 1999 Seaboard announced it was spending $144.5 million to buy 50 percent of Dominican Republic power-generating company Haina, which owned five electrical plants. Annual revenues topped $1.25 billion, up from $715 million just four years earlier. Income from pork accounted for nearly half that amount, with marine operations responsible for another quarter.
In January 2000 the company made its biggest divestment ever, selling its poultry operations to ConAgra, Inc. for $375 million in cash and debt assumption. Other activity for the year included the purchase of another hog processing company and investment in a flour and feed milling business in Kenya. In Texas, Seaboard made a deal to acquire the Jacintoport Marine Terminal of Houston. The company would own the buildings on the site and lease the land from the city's port authority. Seaboard Marine already used the facility, which featured a high speed bagged-cargo loading system.
At the start of the new century, Seaboard Corporation was going strong, strengthening its hog production operations and continuing to diversify overseas by expanding its milling, power generating, and food production businesses. The company was now ranked among the top five U.S. pork producers.
Principal Subsidiaries: A & W Interlining Services Corp.; Agencia Maritima del Istmo, S.A. (Costa Rica); Agencias Generales Conaven, C.A. (Venezuela); Cape Fear Railways, Inc.; Chestnut Hill Farms Honduras, S.A. de C.V. (Honduras); Chestnut Hill Farms, Inc.; Consorcio Naviero de Occidente, C.A. (Venezuela); Cultivos Marinos, S.A. de C.V. (Honduras); Empacadora Litoral, S.A. de C.V. (Honduras); H & O Shipping Limited (Liberia); Ingenio y Refineria San Martin del Tabacal (Argentina); National Milling Company of Guyana, Ltd. (Guyana); National Milling Company Limited (Zambia); Port of Miami Cold Storage, Inc.; Representaciones Maritimas y Aereas, S.A. (Guatemala); S.B.D., LLC; Samovar International Finance, Inc. (Puerto Rico); SASCO Engineering Co./ Seaboard Sales Corporation Ltd. (Bermuda); Sea Cargo, S.A. (Panama); Seaboard de Colombia, S.A. (Colombia); Seaboard de Honduras, S.A. de C.V. (Honduras); Seaboard del Peru, S.A. (Peru); Seaboard Farms, Inc.; Seaboard Freight & Shipping Jamaica Limited (Jamaica); Seaboard Guyana, Ltd. (Bermuda); Seaboard Holdings Ltd. (British Virgin Islands); Seaboard Marine Bahamas, Ltd. (Bahamas); Seaboard Marine Ltd. (Liberia); Seaboard Marine of Florida, Inc.; Seaboard Overseas Limited (Bahamas); Seaboard Ship Management Inc.; Seaboard Shipping Services (PTY) Ltd. (South Africa); Seaboard Trading and Shipping Ltd.; Seaboard Transport Inc.; Secuador Limited (Bermuda); Shilton Limited (Cayman Islands); Transcontinental Capital Corp. (Bermuda) Ltd. (Bermuda); Vinprom Rousse AD (Bulgaria).
Principal Competitors: Alico, Inc.; Baltek Corp.; Cargill, Inc.; ConAgra, Inc.; CSX Corp.; Dole Food Company, Inc.; Farmland Industries, Inc.; Hormel Foods Corp.; IBP, Inc.; Nicor, Inc.; Premium Standard Farms, Inc.; Smithfield Foods, Inc.; Tate & Lyle PLC.
Further Reading:
Barlett, Donald, and Steele, James B., 'The Empire of the Pigs,' Time, November 30, 1998.
Hardy, Eric S., 'Wall Street's Dark Corners,' Forbes, February 28, 1994, p. 126.
Hendricks, Mike, 'Hog Farms Slip Through Tax Loophole,' Kansas City Star, January 13, 1996, p. A1.
Mansur, Michael, 'Proposal Called Wetlands Threat,' Kansas City Star, March 14, 1998, p. C3.
Nicolova, Rossitsa, 'Seaboard Hoping to Uncork Bulgarian Winery's Potential,' Kansas City Business Journal, August 27, 1999, p. 4.
Palmer, Eric, 'Something to Squeal About--Seaboard Makes Plans to Hog the Market,' Kansas City Star, June 23, 1998, p. D1.
'Seaboard Catalyst in Hog Fight,' The Topeka Capital-Journal, August 31, 1999.
'Seaboard Disputes Magazine Report,' Associated Press Newswires, November 27, 1998.
Source: International Directory of Company Histories, Vol. 36. St. James Press, 2001.
