Marfrig may sell Argentina assets, US beef jerky company

Brazil-based Marfrig Global Foods is considering the sale of its assets in Argentina, as well as its Marfood beef jerky business in the United States, according to reports.
The company is seeking to divest of those operations in attempt to cut its gross debt by US$1.2 billion by the end of 2016, according to a report from Agrimoney.
Should Marfrig find buyers for the operations in Argentina and the U.S., it would follow the company’s sale of European poultry company Moy Park to JBS, also headquartered in Brazil. That transaction, valued at US$1.5 billion, was finalized on September 19.
However, the company has also recently made moves to add to its assets in recent months. In March, Marfrig clinched a deal to acquire at least six beef processing plants controlled by Brazilian company Frigorifico Mercosul for a price of nearly US$128 million.
Headquartered in Curitiba, Paraná, Brazil, Marfrig serves markets in South America, Asia, Europe, North America, and the Middle East, with broiler, turkey, pork and beef product offerings. According to the WATT Global Media Top Companies Database, the company processes 405 million birds annually.
Marfrig is also the parent company of the Keystone Foods, a company with global presence and operations in the development, production and distribution of poultry, beef, fish, pork and other products for the foodservice channel, headquartered in West Conshohocken, Pennsylvania.

Brazil meat and poultry company Marfrig buys beef plants

Brazilian meat, poultry and food processor Marfrig SA has clinched a deal to acquire at least six beef processing plants controlled by Brazilian company Frigorifico Mercosul for BRL418 million (US$128 million). Marfrig had previously been leasing the plants from Frigorifico Mercosul.
The plants involved in the acquisition are located in Capon Lion, Mato Leitão, Pirenópolis, Tucumán, New Londrina and Alegrete.
The transaction, which was announced on March 30, comes as global soy and corn prices have fallen nearly 50 percent since their highs in 2012, according to a report from Reuters. Feed prices for beef, poultry and pork can account for as much as 70 percent of companies' livestock production costs.
Headquartered in Curitiba, Paraná, Brazil, Marfrig serves markets in South America, Asia, Europe, North America, and the Middle East, with broiler, turkey, pork and beef product offerings. According to the WATT Global Media Top Companies Database, the company processes 405 million birds annually.
Marfrig is the parent company of the Keystone Foods, a company with global presence and operations in the development, production and distribution of poultry, beef, fish, pork and other products for the foodservice channel, headquartered in West Conshohocken, Pennsylvania. Marfrig is also the parent company to Moy Park, a leading provider of fresh, locally farmed poultry in the U.K. and Ireland.

Marfrig Global Foods names Martin Secco Arias CEO

Martin Secco Arias has been appointed the CEO of Marfrig Global Foods, replacing Sergio Rial, who has submitted his resignation. Secco has previously served as the CEO of Marfrig Beef Southern Cone.
The appointment will be effective February 16.
Secco has worked in Marfrig Global Foods for over eight years, beginning with the acquisition of Frigorífico Tacuarembó in Uruguay, a company owned by his family.  Secco holds a bachelor’s degree in business administration from Universidad Católica Dámaso Antonio Larrañaga and a graduate degree in senior management from Universidad de Montevideo. His career is marked by long experience in the animal protein industry and he recently obtained important results at the units under his command (Uruguay, Argentina, Chile and the state of Rio Grande do Sul in Brazil).
“The strategy of Marfrig Global Foods will not change," said Secco. “Our commitment to pursuing positive free cash flow, margin expansion, sustainable growth and a multi-annual deleveraging process remains the same. We remain committed to creating value for the company.”


Rial ending successful tenure at Marfrig
Rial has led the Brazil-based meat, poultry and food company over the last two and half years, implementing the company’s “Focus to Win” strategy, which significantly improved the integration and performance of the Marfrig Global Food.
Commenting on his departure, Rial said: “As part of the succession process, we have an executive committee that is prepared to effectively take decisions, with Martin at the helm and the other CEOs leading their respective business units. Martin participated on the development of the new strategy in 2013, working together with the vice-presidents, who are also members of the executive committee and are committed as a group to effectively executing the ‘Focus to Win’ strategy.”

McDonald’s turns to Marfrig unit McKey Food Services for chicken

McDonald’s has increased its poultry meat purchases from McKey Food Services after another meat supplier, Husi Food Co., became involved in a scandal for allegedly repackaging expired poultry and beef and selling it with false expiration dates to a number of restaurants with a presence in China. McDonald’s, KFC, Pizza Hut and Dicos were identified as the restaurant chains that purchased meat from Husi, not knowing the meat was expired.
McKey Food Services, is a unit of Keystone Foods, a subsidiary of Marfrig Global Foods.
According to a Forbes report, McDonald’s is cutting its ties with Husi Food Co., which is owned by Illinois-based OSI Group. McDonald’s had not only purchased poultry for its Chinese restaurants, but also for its locations in Japan.
McKey Food Services and Fujian Sunner Development, a meat supplier controlled by the family of Chinese entrepreneur Fu Guangming, have been identified as the companies McDonald’s are relying on for a continued supply of meat and poultry.
OSI Group has since apologized for the expired meat scandal and has closed the plant in question. It has also launched its own investigation of the incident, restructured its Chinese operations and assigned different managers to oversee OSI’s Chinese operations.

Marfrig posts $43.5 million net loss in first quarter

Brazilian meat, poultry and food processor Marfrig reported a first-quarter net loss of BRL96.4 million (US$43.5 million), citing an increase in its debt-servicing costs. The loss for the first quarter compares to a net loss of BRL59.6 million (US$26.9 million) posted in the first quarter of 2013.
Marfrig's debt-servicing costs totaled BRL387.8 million (US$175 million) in the first quarter, which is up from the BRL296.1 million (US$133.6 million) in costs in the same period of 2013. Its total debt in the first quarter amounted to BRL9.25 billion (US$4.2 billion), comparing to BRL13 billion (US$5.9 billion) in debt during the first quarter of 2013.
The company saw some positive financial news during the quarter, with net revenues increasing 9.4 percent to BRL4.78 billion (US$2.16 billion) in the first quarter. Two of its business units saw significant improvements in net revenues. Moy Park, Marfrig’s food and poultry processor based in the UK, saw a 27 percent increase in net revenues. Keystone Foods, Marfrig’s meat, poultry and food company headquartered in the United States, had a 15 percent increase in net revenues. Marfrig Beef’s net revenues declined 2 percent.

Keystone Foods founder Herb Lotman dies

Herb Lotman, founder of Keystone Foods, died on May 8 from complications of heart failure. He was 80.
Lotman, a Philadelphia native, began his career in the food industry with his family’s wholesale beef business. Lotman built Keystone Foods over 40 years to a company generating more than $5 billion in sales annually. Keystone Foods was sold to Marfrig in 2010.
In the late 1960s, Lotman and his partners pioneered cryogenics for McDonald's and developed a mass-production system for making frozen hamburgers. He was also instrumental in the development of the Chicken McNugget, the Philadephia Inquirer reported.

JBS purchase of Seara approved by Brazil’s antitrust agency

JBS SA's proposed purchase of Seara Brasil from rival meat and poultry processor Marfrig has been approved by Conselho Administrativo de Defesa Economica, Brazil's antitrust agency. The transaction was approved without restrictions, and involves 32 production units, including processed foods, poultry and pork processing plants, as well as 21 distribution centers.
JBS is required by law to go through a 15 day waiting period before concluding the transaction. JBS expects to assume ownership of Seara operations, effective September 30.
The Seara acquisition represents an important increase in JBS SA's production capacity of poultry, pork and processed foods at JBS. Including the new facilities, JBS will process 12 million birds, 70,000 hogs, 100,000 hides and 5,000 tons of processed foods per day globally, with a total of 185,000 employees worldwide.
The deal, which includes the purchase of Marfrig leather company Zenda, is valued at R$5.85 billion. 

Moy Park reports strong 2012 trading results

The UK’s Moy Park, part of Marfrig, has announced that its pre-tax profits in 2012 stood at £24.4 million ($38 million), up from £4.8 million in 2011.
Nigel Dunlop, Moy Park CEO, commented: “Despite a difficult economic and trading environment, Moy Park delivered a strong trading performance in 2012. The business grew its turnover by 1.6 percent to £1.09 billion and has posted profits of almost £25 million.
“The improvement in pre-tax profit and trading margins was achieved by a combination of initiatives including operating cost improvements and productivity initiatives which helped shield the business from the difficult market environment.
“In line with our strategy, and to support our customers’ requirements to grow sales of chicken farmed in Great Britain and Northern Ireland, we will continue to invest materially in our industry leading farming and operational base. We will also continue to further develop our commercial capabilities through areas such as innovative food development, consumer insight and effective customer and category marketing.”
The company has announced a number of initiatives over recent months. In February, it published plans for a major £20 million investment in its Grantham food processing site which will see a state-of-the-art convenience food facility built creating over 150 additional jobs.
The same month, Moy Park revealed that it had achieved energy savings in excess of £2 million since 2011, including a reduction in energy consumption of 8 percent.

Marfrig Group begins cattle operation in Brazil

Marfrig Group, one of the world’s largest food producers, has started production at its Tucumã unity, located in Pará state, in Brazil’s North Region, which has the capacity to process one thousand head of cattle per day and has been idle since 2009. The company decided to re-open it this year and the measures required for its reopening include mapping and organizing cattle suppliers based on the company’s social and environmental criteria adopted throughout its production units. This is the fifth Marfrig Group production unit in the Amazon region. Others are located in Rolim de Moura and Chupinguaia, both in the Roraima state, and Tangará da Serra e Paranatinga, in Mato Grosso state. 
To contribute to environmental preservation, to stimulate sustainable cattle production and to enlarge the number of suppliers in the region, Marfrig Group settled a partnership with The Nature Conservancy, one of the world’s largest environmental organizations. Both organizations will provide technical resources to promote compliance with environmental legislation and expand responsible production among cattle producers operating in the municipalities of São Félix do Xingu and Tucumã, located in southeastern Pará, area with the largest cattle herd in the country. The project’s cycle will be completed through a partnership with Walmart Brazil, the world’s leading retailer, which will offer to the customer a product obtained through the best social and environmental practices. 

JBS, Pilgrim’s deal follows industry pattern of globalization

With the announcement of JBS purchasing Pilgrim’s Pride, and Marfrig’s buyout of Seara, the agri-food industry is becoming increasingly global and diverse.
In the case of JBS and Pilgrim’s, one industry expert is wondering why it didn’t happen sooner.
“JBS is big in beef and pork. I guess the question is – why did they wait so long to get into poultry?” said Paul Aho, an agribusiness economist.
Aho points to the recent changes among industry giants as further proof that companies must be global to compete.
“They’re combining beef, pork and chicken, and of course I’m sure that they are wanting to diversify into poultry in the U.S. and maybe in Brazil, as well,” he said.
“In the future, if you’re going to be one of the global leaders, you would need to be in the U.S., Brazil and China.”
Now that Pilgrim’s is in the JBS family, its scope and sales are reportedly expected to be close to Tyson, but Aho said that’s not a bad thing.
“It’s a win-win situation. Pilgrim’s will be in steady hands … I don’t think this means things are worse for Tyson, but Pilgrim’s will also do well, too.”
From an economic perspective, JBS struck at a time of relative market lows.
JBS has not commented on Marfrig’s purchase of Seara, which was owned by Cargill in the U.S.
Read the original buyout announcement.