BRF International Foods (BRF), an export company created by Perdigao (NYSE: PDA) and Sadia (Brazil’s largest poultry and meat processing companies, respectively), will be officially introduced to members of the business community and government officials in Moscow on September 28. The markets of Russia, the Ukraine and Belo-Russia are the main focus of this new company. The goal of BRF International Foods is to increase meat exports to emerging markets. Other countries in BRF plans include Egypt, South Africa, Angola, the Dominican Republic, Cuba, Iran, Iraq and Jordan.
This event will be held at 10 am (Moscow time) in the Baltschug Kempinski Hotel. Brazilian Minister of Agriculture, Mr. Marcus Vinicius Pratini de Moraes, will lead the event together with the CEO of Perdigao, Nildemar Secches, and Sadia’s CEO, Walter Fontana. Mr. Fontana will subsequently introduce the Executive Director of BRF, Mr. Duncan Potter.
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Capital stock of BRF International Foods is composed 50% by each partner. It is estimated that during the first year of operation the new company will reach sales of approximately US$ 150 million, which could increase to US$ 500 million over the next five years.
PRIORITIES
One of BRF’s priorities is to reach markets in countries that once belonged to the former Soviet Republic, according to Duncan Potter, who noted that agreements among the Russian government, the International Monetary Fund, Paris Club and international creditors have given a new impulse to the Eastern European economy. “These countries will import approximately 50% of the company’s forecasted revenues during the next 12 months,” said Potter.
During the first half of 2001, Russia was the largest importer of Brazilian pork meat, comprising more than 60,000 tons of the pork meats by- products – valued at approximately US$ 86 million (FOB values), according to ABIPECS, the Brazilian Association of Pork Meat Producers and Exporters. Russia is the third largest importer of pork meat in the world, importing more than 310,000 tons annually. Brazilian companies expect to improve their market share through BRF International Foods.
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By GlobalDataIn the poultry sector, according to ABEF, the Brazilian Association of Poultry Exporters, during the first half of 2001, Brazil exported 28,000 tons of poultry meat to Russia, totaling US$ 19.6 millions (FOB values). Last year Russia imported 900,000 tons of poultry meat from several countries, making it among the most important markets with the potential to improve Brazilian exports.
Perdigao and Sadia are big exporters in both sectors. With BRF, Russian customers of both companies will be attended by BRF International Foods, with better services.
Perdigao and Sadia’s expertise will help them to improve market share in Eastern European countries. The alliance between these two companies will create important competitive advantages such as increased production and potential logistic gains due to better freight negotiations and superior inventories to better meet customers’ needs. Perdigao and Sadia have experience in logistics to export to more than 40 countries on all continents.
“Brazil is capable of providing improved meat production through its large grain supply, skilled manpower and food production experience. In addition to frequent investments in technology and production improvements, we also have a guarantee of competitiveness in all countries,” according to Potter.
BRF International Foods has modern and dynamic structures that are adaptable to business mechanisms, allowing trading partners to export to Brazil via swap systems.
QUALITY
The quality and safety of Brazilian pork and poultry are internationally recognized. Frequent technological investments by Perdigao and Sadia towards the pigs’ genetic evolution provide constant improvements in the animal products and by-products. The meat is healthy with 32% less fat, 10% less cholesterol and 14% less calories.
Brazil is the world’s second largest poultry exporter, after the United States. During the first half of 2001 the volume of exports increased 44%, and sales increased 69%. Technological advances established at processing units of both Brazilian companies have improved available product mixes in order to meet the needs of different markets.
The majority of Perdigao and Sadia plants are located in the Brazilian states of Santa Catarina, Rio Grande do Sul, and Parana, and are responsible for 90% of the poultry meat exports. This region is generally considered free of animal diseases banned under the terms of the International Epizootic Office (IEO).
The outgrowing system provides for total meat sales of poultry and pork farms used by both companies and certifies food safety of Brazilian products currently available through BRF in the Russian market. Furthermore, Brazilian meat inspection is one of the most stringent in the world, which guarantees the excellence of Brazilian poultry and pork meats.
