August 7, 2006


Brazil's Sadia to supply chicken to McDonald's in Russia



Brazil's largest chicken company, Sadia (SDA), said Friday (Aug 4) that its new chicken meat processing plant in Russia would produce chicken sandwich meat for McDonald's Corp. (MCD).


The company has a similar contract with McDonald's in other countries to prepare McDonald's "crispy chicken" and "grilled chicken" sandwiches.


Sadia's US$70 million Russian investment is part of a joint venture with Russian food company Miratorg, which would own 40 percent of the Sadia facility, Brazil business daily Valor Economica reported.


Sadia's revenue for the first half of 2006 hit 3.5 billion reals (US$1.61 billion) or 10.6 percent less than the same period in 2005.


First half profits declined 65.5 percent to 84.5 million reals because of a decline in chicken consumption in the main export markets.


Russian bans on chicken meat from several Brazilian states has also reduced Sadia's profits, the company said.


Sadia said the cumulative effects of bird flu and the Russian ban resulted in the company having one of its most difficult quarters in recent years.

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