Corporate Newsletter Issue 5 April 2016

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Doris Jordan
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Business Overview WH Group officially launches Smithfield s American-style products in China In the first quarter of 2016, WH Group officially

businesses; The Zhengzhou American-style factory produces three major categories of products American-style bacon, American-style ham and

The products are currently distributed to 3,023 supermarkets, among which, 2,929 are sold over-the-counter; 79 offices of the Company in 18

1 This newsletter covers the latest developments and information relating to WH Group and its subsidiaries, Shuanghui Development and Smithfield Foods, in the first quarter of 2016 (January to March). Business Overview WH Group officially launches Smithfield s American-style products in China In the first quarter of 2016, WH Group officially launched Smithfield branded products, which are produced at the American-style packaged meat factory at Zhengzhou, Henan, introducing this popular packaged meat brand among American consumers into the Chinese market. This not only helps upgrade the Company s product structure, but also further reveals the synergy between the China and U.S. businesses; The Zhengzhou American-style factory produces three major categories of products American-style bacon, American-style ham and American-style sausages under the registered license of the Smithfield (Smithfield ) brand and trademark, with all production raw materials imported from the U.S; The distribution network of the newly launched American-style products are currently focusing on supermarkets in 152 major cities across China. The products are currently distributed to 3,023 supermarkets, among which, 2,929 are sold over-the-counter; 79 offices of the Company in 18 regions across China have fully engaged in the promotion of the Americanstyle products, which in total have developed 2,145 American-style products special zones, 211 counters and 8 in shop stores. 1,690 zones and 130 counters were completed in March. In shop stores have just begun development in March. Smithfield Branded American-style products American-style products special zone, counter and in shop store American-style products are well received by consumers Page 1

conference call. The key messages are asfollows: 2015 was a year of substantial organizational and cultural change for Smithfield, the Company recorded the second best yearly results in its history.

One year ago, the Company announced its new organizational structure One Smithfield, which eliminated all the independent operating companies it spent nearly 30 years accumulating, combining all the

Today, One Smithfield has been a catalyst for earnings improvement. The initiatives and projects of One Smithfield benefit the domestic meat businesses, both packaged and fresh.

In fresh pork, retail channel sales grew double digits while improving margins by more than 20%. Smithfield will see 2015 as a clear demarcation point for the Company.

2 Business Overview (Cont.) Progress of One Smithfield President and CEO of Smithfield, Kenneth Sullivan, elaborated the progress and results of One Smithfield from a strategic perspective duringsmithfield 2015 AnnualResults conference call. The key messages are asfollows: 2015 was a year of substantial organizational and cultural change for Smithfield, the Company recorded the second best yearly results in its history. One of the major reasons for the results is the implementation of One Smithfield. One year ago, the Company announced its new organizational structure One Smithfield, which eliminated all the independent operating companies it spent nearly 30 years accumulating, combining all the worldwide operations into four cohesive operating divisions. With a particular focus on putting all the segment operations under one common management control. Today, One Smithfield has been a catalyst for earnings improvement. The initiatives and projects of One Smithfield benefit the domestic meat businesses, both packaged and fresh. In packaged meats, the operating profit reached all-time highs with per unit profits also reaching new levels for the full year. In fresh pork, retail channel sales grew double digits while improving margins by more than 20%. Smithfield will see 2015 as a clear demarcation point for the Company. It will be remembered as the year Smithfield finally harnessed the power of its brand and the year the Company emerged as a powerful market force that could no longer be ignored in CPG circles. But we are not done with the progress. The benefits the Company has seen to date are mostly attributable to the sales plan. Over the next 12 to 24 months, Smithfield expects to see meaningful improvements in transportation and logistics costs as well as reductions in our manufacturing costs. Since the launch of One Smithfield, the Company s management has regularly conducted site visits in order to monitor the progress of One Smithfield. In the first quarter of 2016, Kenneth Sullivan and other senior management, visited seven locations including North Carolina and Kentucky. Smithfield honors military families with celebrities In order to enhance its position in the grassroots consumer market, Smithfield s brand Eckrich has cooperated with a number of celebrities and organizations in various ways to thank and support military families, including offering free groceries for one year. Page 2

of the incredible teams that will be competing. The event will take place in December and will featurethe best BBQ teams in the U.S.

3 Business Overview (Cont.) Smithfield Signs on as Title Sponsor for Prestigious BBQ Competition and Champion Team Smithfield has signed on as a key sponsor for Big Poppa Smokers (BPS) promoted events throughout the 2016 competition BBQ season. The Big Poppa Smokers championship BBQ team will also serve as Smithfield brand ambassadors for the 2016 season. The prestigious King of the Smoker $75,000 Invitational will now be known as the Smithfield King of the Smoker Invitational, with Smithfield supplying their Prime line of pork butts and ribs to all of the incredible teams that will be competing. The event will take place in December and will featurethe best BBQ teams in the U.S.. Premium Deli Brand Kretschmar Launches New Country Music Campaign for 2016 Smithfield s premium deli brand Kretschmar enlisted country music star Easton Corbin as a brand ambassador for Easton will be featured in "Kretschmar Country campaign throughout 2016 to provide its consumer with access to a wide variety of amazing country music experiences. Rising stars Ruthie Collins, Kelleigh Bannen and Natalie Stovall are joining Corbin as brand ambassadors for Kretschmar in Smithfield-Sponsored Historic BBQ Honored by Local Ohio Government Officials Historic BBQ, winner of the Smithfield Great Rib Rivalry and Smithfield's sponsored team for the 2016 competitive season, was honored last month in its hometown with three commendations from Ohio State leaders. The muchdeserved commendations are a result of Historic BBQ winning the coveted Smithfield title and in turn, helping to put their hometown of Lebanon on the map. Historic BBQ was named the Smithfield 2016 Team of the Year this January at Kansas City Barbecue Society's (KCBS) 30th Annual Awards Banquet after scoring top performances in KCBS competitions and Smithfieldbranded contests throughout Page 3

order to support Shuanghui s transnational operations, create a more competitive meat industry chain, improve Shuanghui s capital efficiency and reduce the cost of funds.

finances. It will also support Shuanghui s industrialization and internationalization development.

Over 3,700 people attended the meeting, including Chairman of WH Group and Chairman of the board of Shuanghui Development Mr.

4 Business Overview (Cont.) China Banking Regulatory Commission approves set-up of Shuanghui Finance Company The China Banking Regulatory Commission approved the set up of Shuanghui Finance Company on 6 February 2016, in order to support Shuanghui s transnational operations, create a more competitive meat industry chain, improve Shuanghui s capital efficiency and reduce the cost of funds. The Company will provide Shuanghui and its member units professional financial services, innovative fund and capital management services to achieve effective integration of Shuanghui s business and finances. It will also support Shuanghui s industrialization and internationalization development. Shuanghui holds 2016 Business and Employee Representatives Meeting Shuanghui held its 2016 Business and Employee Representatives Meeting on 15 February. Over 3,700 people attended the meeting, including Chairman of WH Group and Chairman of the board of Shuanghui Development Mr. Wan Long, President of Shuanghui Development You Mu, and other management representatives of WH Group and Shuanghui Development. During the meeting, Mr. Wan Long pointed a clear development blueprint for Shuanghui Development when he said Explore the Future by Innovation and Transformation. He also suggested that Shuanghui aim towards a century-old, global top 500 enterprise. Henan Province s imported meat designated port - Luohe Inspection Area has been officially put into operation The opening ceremony of the imported meat designated port - Luohe Inspection Area was held at Shuanghui Logistic Park in January. The representatives of Henan Province, Mr. Wanlong, Chairman of WH Group and CEO of Shuanghui Development and others attended the opening ceremony. The operation of the port will support Shuanghui Development in exploring overseas markets, accessing both domestic and global markets, and establish a bridge between Shuanghui and Smithfield to optimize resource advantages and boost the integration of production operations. Major appointments at Smithfield Foods Smithfield Foods announced major appointments in the first quarter: Dhamu Thamodaran, Executive Vice-President, accepted additional responsibility for developing strategies to optimize our vertically integrated model. Dhamu will formulate and implement strategies that maximize returns from our vertically integrated system; Will Brunt, Chief Innovation Officer, will expand his innovation efforts enterprise-wide. He will promote, encourage, empower and spotlight innovation in every process and area of our business. Page 4

Corporate Social Responsibility Shuanghui Development emphasizes staff training, improve management efficiency and safeguard food safety Shuanghui Development has always been dedicated to improving

The 2016 management system workshop aims to promote the enterprise management upgrade and strengthen the quality and professionalism of systems executives.

Smithfield Foods Acheives Significant Progress Towards Conversion to Group Housing Systems for Pregnant Sows Smithfield Foods announced the transition of pregnant sows on all companyowned farms in

5 Corporate Social Responsibility Shuanghui Development emphasizes staff training, improve management efficiency and safeguard food safety Shuanghui Development has always been dedicated to improving the professionalism of staff, and control standards of food safety. Shuanghui Development held the 2016 management system workshop and 2016 food safety education activities in March The 2016 management system workshop aims to promote the enterprise management upgrade and strengthen the quality and professionalism of systems executives. The 2016 food safety education activities aims to improve the control standards for food safety, so as to provide safe, nutritious and healthy food for consumers. Smithfield Foods Acheives Significant Progress Towards Conversion to Group Housing Systems for Pregnant Sows Smithfield Foods announced the transition of pregnant sows on all companyowned farms in the United States to group housing systems in As at the end of 2015, the company has transitioned 81.8 percent of pregnant sows to group housing systems and expects to convert all company-owned farms by 2017 as planned. Smithfield Pledges to Provide 3.4 Million Servings to Food Banks Across the United States in 2016 Smithfield s Helping Hungry Homes program is planning to donate more than 3.4 million servings to food banks across the United States in 2016, with an aim to providing wholesome food to millions of Americans struggling with hunger every day. Corporate Honors & Awards WH Group and its subsidiaries, Shuanghui Development and Smithfield Foods, received several awards in the first quarter of 2016, include the following: Shuanghui Development: Excellent Innovated Enterprise Award ; Shuanghui Development: 2015 Industrial and Commercial enterprises Special Contribution Award; and Keira Lombardo, Senior Vice President of Corporate Affairs of Smithfield Foods: Annual "STEP Ahead Awards by The Manufacturing Institute. Page 5

Financial Highlights WH Group s subsidiaries, Shuanghui Development and Smithfield Foods, will announce their first quarter results on 28 April 2016.

6 Financial Highlights WH Group s subsidiaries, Shuanghui Development and Smithfield Foods, will announce their first quarter results on 28 April The Companies will be communicating with investors through separate telephone conferences. If you are interested in joining any of the teleconferences, please contact the investor relations team: investor@wh-group.com Market Trends Hog prices in China and the U.S. Volume and YoY growth of U.S. pork exports to China Forecast of Hog Prices in China by the NDRC On 10 April, the National Development and Reform Commission (NDRC) commented on the high hog prices and provided hog price forecasts for this year on its website. Hog prices may stabilize at high levels for a certain period, while the room for further rises will be limited. Because the breeding stock of live hogs and breeder sows remains low, it is estimated that hog prices will remain high before the Mid-Autumn Festival and the National Day this year. Hog prices are unlikely to rise sharply in summer due to it being low season for pork consumption, decrease in breeding costs and the fact that the prices of alternative products will also decline or stay still. Recently, farmers have been actively increasing breeding stock. According to the Ministry of Agriculture, the breeding stock of live hogs in March saw a 0.9% m-on-m increase while the stock of breeder sows held steady, signaling that the decrease in the breeding stock of live hogs and breeder sows comes to an end and the supply and demand of live hogs may change later. According to the hog production cycle, there will be a growing supply of hogs in September, and hog prices will be adjusted after the Spring Festival of next year. Therefore, pig farm households should pay attention to the risks and rationally judge the price movement to arrange breeding stock in a reasonable manner. Appendix Source: CICC Food & Beverages, 14 April 2016 Financial Times article affirms the synergies between WH Group s U.S. and Chinese business After WH Group announced its 2015 annual results, Financial Times published a commentary article which highly affirmed the synergies between the company s U.S. and Chinese business. The article indicated that WH Group s initiative to simplify its U.S. units helped drive growth of nearly 50% in its downstream business. For the article, Please refer to: Page 6

$3.5 Billion Acquisition of Nation s No. 2 Company in Growing Moist Snuff Category. Deal at a Glance

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