February 5, 2007

Brazil's Sadia sees 9-11 percent growth in 2007 meat exports

Brazilian meat company Sadia SA expects anywhere from 9 percent to 11 percent growth in meat exports in 2007 despite new outbreaks of bird flu, company executives said in a presentation to investors late Thursday (Feb 1).

In 2006, Sadia exported 963,959 tonnes of meat to world markets, of which 70 percent was chicken. Exports declined in 2006 because consumers in Sadia's main markets stopped purchasing poultry on bird flu fears.

Six countries reported new cases of the deadly H5N1 strain of bird flu in January, including Hungary and Vietnam, according to the World Organization for Animal Health.

This week, the Brazilian Chicken Exporters Association said that consumers were learning to live with bird flu, and consumption was not expected to drop the way it did in 2006.

Moreover, some 50 percent of Sadia's sales are derived from the local market, which helps the company weather declines in international sales. The company expects local consumption to rise by 10 percent from the 928,600 tonnes of meat sold in 2006 because of rising incomes.

Sadia said 2007 expansion projects will cost 800 million Brazilian reals (US$381 million), with most of that money being invested in increased capacity in 13 of Sadia's meatpacking units.

Sadia said that its new chicken and pork unit in northern Mato Grosso will be operational in the second half of the year. The company's Russian facility, located in Kaliningrad, will also be operational in the second half.