São Paulo – Brasil Foods (BRF), a food producer that owns brands Sadia and Perdigão, aims to increase control of its productive chain in international markets considered important. This is the reason why the company acquired 49% of the capital of the Federal Foods distributor, in the United Arab Emirates, a deal announced in October 2012 and concluded last week. The acquisition grants the Brazilian company the power of decision regarding the company in Dhabi.
“Our intention is to control the entire chain and we are doing that in the countries in which we operate and which we consider strategic,” said Antônio Augusto De Toni, Foreign Market vice president at BRF. According to the executive, Federal Foods was chosen as it has been a Sadia brand distributor for over 20 years and both companies have close ties. With the acquisition of the capital of the Arab company, 30% of the products sold by BRF in the Middle East will be distributed by the company itself.
The acquisition of Federal Foods is just one step in the process for expansion of control of the chain by the Brazilian company. In the Emirates, BRF also owns the Perdix Emirates distributor, which works with Perdix products, as the Brazilian Perdigão brand is known in the Arab world. According to Toni, the two distributors should join forces. “We are going to merge it with Federal Foods this year,” he said.
The volume of products sold in the region should increase substantially with the start of operation of a factory that the company is building in Abu Dhabi. Currently, BRF exports 70,000 tonnes of food a year to the Arab countries. The new unit, which should start operating in the last quarter of this year, should produce 80,000 tonnes of food products.
The products will be breaded, sausages and fresh Sadia pasta, products that, according to Toni, will complete the company portfolio exported from Brazil, as well as bringing other benefits, like the opening of new markets and tax breaks.
“Starting in the Emirates, we are going to reach markets that are more difficult for fresh products, like Iraq,” says the executive regarding the specific requirements for product expiration dates made by Baghdad. “With regard to other countries in the Arab League, import tariffs for food produced in the Emirates are cheaper,” she said.
Modernisation
This year, BRF should release the Sadia brand on the international market once again. The brand hired a North Americana advertising agency to develop new visual communication and modernize the packages. “In the Middle East the re-release should probably take place in July, after Ramadan,” said Toni.
“The Sadia brand is one we have been marketing in the Middle East for 25 years and today, in some places, it is recognized as better than local brands,” said the vice president at BRF. According to him, in some countries in the Middle East, customer acquaintance with the Sadia brand is even greater than in Brazil.
Currently, the BRF market share in the Middle East is between 50% and 70%, depending on the country. Kuwait, with 70%, is where the share is the highest. Apart from Sadia and Perdix, the numbers include products by brands Borella and Unef.
According to Toni, business in the Middle East generate US$ 2 billion a year to BRF, 30% of the company’s sales on the foreign market.
*Translated by Mark Ament
