November 17, 2006

Brazil focuses on internationalisation

The Brazilian beef industry remains focussed on internationalisation, the aim being to diversify markets, gain scale and reduce risk, informed a report by Agra FNP's Brazilian Meat Monitor.

Friboi, Bertin and Marfrig, the top three players in the Brazilian beef market, have recently made acquisitions of processing plants in Uruguay, Argentina and Paraguay to the value of US$305 million. While the appreciating Brazilian currency has made export less profitable for these companies, it has favoured the purchase of acquisitions outside Brazil.

The rationale behind Brazilian beef companies investing in other Mercosur countries (Argentina, Brazil, Chile, Paraguay and Uruguay) was to produce beef in countries with better sanitary status and to reduce sanitary risk, according to Agra FNP.

Besides, in the event of outbreaks like that of FMD in one region, the company could ensure supply from other sources. The strategy guarantees further expansion on the premium quality meat market, Argentina, for example, has a 28,000-tonne share of the EU Hilton quota for premium meat cuts, compared with just 5,000 tonnes for Brazil.

Also, the companies could supply markets which were closed to Brazil, such as the US and Mexico.