São Paulo – The Middle East’s share in exports by the Brazilian meat packing company Minerva has increased. Middle Eastern countries accounted for 21% of the company’s foreign sales in 2015, up from 16% in 2014. Minerva reported that its top buyers in that area were Iran and Israel, which are non-Arab countries located in the Middle East, and the United Arab Emirates.
In December 2015 Minerva entered into an investment agreement with the Saudi Agricultural and Livestock Investment Company (SALIC) run by the Saudi sovereign wealth fund. In late 2015, Brazil and Saudi Arabia signed an agreement to lift the latter’s ban on Brazilian raw beef, so Minerva believes sales to the Middle East will continue to increase. “The outlook for that region remains positive,” Minerva said this Wednesday (9th).
The company names foreign sales as being largely responsible for its good performance last year, with consolidated gross income at a record BRL 10.1 billion, up 35% from 2014. It ascribes the increase to flexibility in funneling sales to overseas markets amid strong international demand and weaker domestic consumption, to the positive impact of the dollar hike on exports, and to increased slaughtering numbers.
Minerva saw its total foreign sales revenues soar by 44% to BRL 6.9 billion in 2015 from 2014. Export revenues amounted to BRL 5.8 billion last year, or 70% of total raw beef sales, and up 58% from BRL 3.7 billion in 2014. Domestic sales of raw beef grew much less, by 19% to BRL 2.4 billion.
CEO Fernando Galletti de Queiroz asserted that the international scenario remains favorable to Minerva, “with the continuously decreasing availability of beef worldwide, and international demand evolving well.” Asia, Minerva’s top buying region in 2015, was the target of 24% of total exports, followed by the Middle East and then by Africa, at 17%. The Americas and the European Union were the destinations of 12% of Minerva’s total exports each.
The deal with SALIC was part of an operation designed to increase Minerva’s capital and strengthen its capital structure. According to reports on the deal last year, the Saudi company acquired a 19.95% minority stake in a deal worth USD 188.4 million. In its financial statements, Minerva argues that besides boosting capital, the agreement ushers in a “strategic partnership in a region with a potentially strong demand, with a company whose mission is to make lucrative investments in worldwide agriculture and livestock value chains.”
*Translated by Gabriel Pomerancblum
