Brazil food giant BRF ready for major expansion in halal markets
SÃO PAULO - Brazilian food processing company BRF on January 18 completed the $8 million acquisition of Joody Al Sharqiya Food Production through its wholly-owned subsidiary Badi Ltd. in the United Arab Emirates.
Joody is a food processing plant in Dammam in eastern Saudi Arabia, producing such items as hamburgers, breaded meat cuts and marinated chicken. BRF is set to invest $7.2 million to increase Joody’s installed capacity from some 3,600 to 18,000 tons a year.
“This operation strengthens our presence in a strategic market, and we have a clear long-term view regarding the production of added-value food items,” Carlos Moura, BRF Vice-President of Finances and Investor Relations, said in a statement.
Employing some 100,000 people, BRF is one of the world’s largest food companies. Its meats, chicken and frozen products are available in over 140 countries across the globe. Turnover in 2019 exceeded $9.5 billion.
The acquisition and extension of the Damman factory is but a small first step in BRF’s ambitious Vision 2030 expansion plan, announced in December. The Brazilian food giant aims to invest $10.8 billion (55 billion reais) over the next decade to achieve a net revenue of up to $12.5 billion by 2023 and $19.3 billion by 2030.
Vision 2030 is based on five main pillars, which includes shifting revenue from selling fresh and frozen foods to value-added processed foods, carving out a bigger stake in the maturing global market for plant-based meats, and further growth in halal markets such as Turkey and Saudi Arabia.
“We own 12% of the global chicken protein trade and 61% of Brazil sausage exports, a major part of which is destined for Islamic countries,” BRF communication advisor Marcelo Couto told Salaam Gateway.
“Turkey and the Gulf region have long been key markets. Sadia is a market leader in the Gulf region, while Banvit is Turkey's leading chicken brand (39% preferred).”
Banvit is Turkey’s largest producer of halal chicken by volume. In a joint venture with the Qatar Investment Authority, BRF in 2017 acquired a majority stake in the company.
“Turkey is a market in which we are strongly committed with a long-term vision,” Couto said. “We have growth projects to increase participation in chicken meat production from the current 14% to around 20%.”
In 2017, BRF created a new subsidiary, OneFoods, which runs all of the company’s halal meat operations. Headquartered in Dubai, the firm has some 15,000 employees and operates in over 40 countries in the Middle East and North Africa. Through leading BRF brands such as Sadia it has a market share of some 45% in chicken products in the Gulf region. The first Sadia container from Brazil arrived in the Gulf in the early 1970s.
Until recently, OneFoods products were supplied by ten plants, eight of which are in Brazil, one in Abu Dhabi and one in Malaysia, all of which hold required halal certifications. The recently acquired plant in Dammam makes 11.
In 2019, BRF revised its internationalization plan and announced the upcoming construction of a brand-new $120 million processing plant in Saudi Arabia.
“BRF has more than four decades of experience in producing halal-certified products,” said Couto. “Over 75% of BRF's entire chicken production is carried out using halal-approved methodology. Globally, the company is recognized by its Muslim consumers for being a leader in halal products for many years.”
PLANT-BASED FOODS
Another major pillar of BRF’s Vision 2030 is the growing market for plant-based foods. “Our team is dedicated to studying new interests, preferences and habits, which helps us to develop new products, such as plant-based line launched in 2020,” said Couto.
The company’s Sadia Veg & Tal line includes products made from non-animal protein, such as plant-based burgers, nuggets and wholegrain pies with spinach and ricotta.
In Brazil, BRF aims to become the second biggest company in the lucrative pet products market, which has an estimated value of over $8 billion. The current leaders in this sector are Mars, Nestle and Grandfood.
BRF also aims to be Brazil’s market leader in ready meals, which is set to reach over $5 billion in the coming years.
(Reporting by Peter Speetjens; Editing by Emmy Abdul Alim emmy.abdulalim@salaamgateway.com)
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