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Wednesday, December 31, 2014
BRF, Indofood forming joint venture company in Indonesia
BRF has signed a memorandum of understanding with PT Indofood Sukses Makmur Tbk (Indofood), for the incorporation of a joint venture company that will explore the poultry and processed foods businesses in Indonesia.
The joint venture company will represent BRF’s entry into Indonesia, a market with more than 250 million people that is experiencing a significant growth in protein consumption.
Indofood is one of Indonesia’s largest companies with operations in all stages of food manufacturing, from production of raw materials and their processing, to consumer products. Its business operations includes consumer branded products, flour milling, agribusiness, distribution, cultivation and processed vegetables. In the context of such a joint venture company, BRF will contribute with its knowledge in the protein-based food processing industry and Indofood will contribute with its market access in Indonesia, granting access to its extensive distribution network.
BRF and Indofood will each hold a 50 percent ownership in the joint venture company and, subject to the satisfaction of certain conditions precedent to be set forth in the definitive agreements, jointly plan to invest approximately US$200 million in the next three years.
This transaction is in line with BRF’s strategic plan for globalizing the company by means of accessing local markets, strengthening BRF’s brands, distributing and expanding its product portfolio around the globe.