August 31, 2022


CEO of BRF SA resigns, company shares close lower



Major Brazilian food processor BRF SA announced the resignation of chief executive Lorival Luz, with Miguel Gularte, a senior executive at beefpacker Marfrig Global Foods SA, to take over as CEO, US News reported.


As BRF investors processed the news, the company's stock closed 1.10% lower at BRL 16.19 (~US$3.17; BRL 1 = US$0.20), down from the early Sao Paulo trading high of around 6%.


In a note to clients, BTG Pactual analysts said that Miguel Gularte can be characterised as a beef guy to some extent.


The analysts said it is unclear whether he can reposition BRF to compete fiercely in Brazil. BTG compared the processing of beef to the processing of pork and poultry, and said these are very different industries and require a different set of skills.


Despite the market's long-running speculation to the contrary, BRF stated that the action does not indicate an intention to merge the two businesses.


Marfrig, who holds a 33.27% stake in BRF, has previously stated that it is only interested in a passive stake in the company.


The appointment of Gularte, however, is seen as yet another sign of how Marfrig is effectively taking control and influencing BRF's operations by BTG analysts.


In a note, XP analysts referred to Gularte's appointment as "unexpected", highlighting the fact that his background is in the beef industry.


Gularte "should be able to make BRF more agile, removing uncomfortable inertia that was responsible for lost opportunities in BRF's past," according to XP, though.


BRF, owner of well-known Brazilian brands Sadia and Perdigao, has been struggling with high cost inflation and primarily sells in its home country.


Contrary to competitors JBS SA and Marfrig, BRF neither processes cattle nor owns facilities in nations like the US.


Prior to today's announcement, Gularte served as Marfrig's CEO.


Rui Mendonca was named as the new CEO for South America by Marfrig, whose shares fell 3.78% after the bell on Tuesday. Mendonca will succeed Gularte.


-      US News

Video >

Follow Us