Marfrig Global Foods S.A. is a multinational company with operations in the food and food service sectors in Brazil and in 15 other countries around the world. Our activities are focused on the production, processing preparation, sale and distribution of animal protein (beef, pork, lamb and poultry), pasta and similar foods (pizzas, lasagnas, breaded products and desserts), ready-to-eat meals and frozen vegetables, as well as the distribution of other food products (frozen items, cold cuts, sausages and fish, among others) and semi-finished and finished leather.
In 2011 we were recognized as the “Best Meat Company” by the Abril Group’s Exame magazine’s Biggest and Best guide (Maiores e Melhores) and “Best Meat Company” by the Globo Organization’s Globo Rural magazine.
We have built an integrated and geographically diversified business model, consisting of production facilities in locations that offer significant cost advantages, combined with a distribution network that covers more than 160 countries and accesses the world’s principal consumer channels and markets. We have a vertical business model in poultry and pork in Brazil (Seara Alimentos), Europe (Moy Park Holdings Europe Ltd. (“Moy Park”)) and the United States (Keystone Foods Holdings LLC (“Keystone”)), while in other regions we acquire poultry and pork raw material from third parties. Most of our cattle is acquired from third parties, providing us with a wide and varied portfolio of proteins and products. We also have a strong and growing presence in the processed foods segment, which will be one of our main drivers of growth in volumes and margins in the coming years.
As part of an initiative to improve operational efficiency, ensure more rapid decision-making and pursue synergies among the various divisions, our organizational structure has been divided into two major segments:
• Marfrig Beef, which comprises the beef divisions in Brazil, Argentina, Uruguay and Chile and the lamb and leather product divisions; and
• Seara Foods, which comprises the poultry, pork, prepared and processed products in Brazil, Europe (Moy Park) and other global operations (Keystone).
This structure serves some 69,000regional and global clients, including the food service market and major retail chains.
Marfrig has a portfolio of solid, well-positioned and well-known brands that are symbols of high-quality food products, including Seara, Bassi, Montana, Tacuarembó and Moy Park. In addition, in 2011 the Marfrig Group entered into a partnership with British chef Jamie Oliver to sell products under his brand in the United Kingdom. Seara remains strategically positioned as our global brand, with high-quality products at competitive prices in the Brazilian and international markets.
The Marfrig Group is managed by an experienced team committed to the highest standards of corporate governance and environmental responsibility.
We currently operate 183 processing plants, distribution centers, feedlots and offices in 17 countries in South America, North America, Europe, Asia and Africa. We have a daily slaughtering capacity of 20,730 head of cattle, 3,726,860 chickens, 11,179 head of pork, 41,000 turkeys and 11,900 lambs. We have a monthly production capacity of 120,667 metric tons of processed food and 294,000 leather articles. Together, this production platform gives us significant growth capacity as well as the ability to hedge against several industry risks.
Since our initial public offering in 2007, we have implemented a strategy of deliberate and consistent growth based on a global and diversified business model. From our initial public offering in 2007 through the end of 2011, our volume of products sold increased by approximately 402.4%. From 2008 through the end of 2011, our volume of products sold increased from 1,480,767 metric tons to 4,779,019 metric tons, representing a compound annual growth rate of 47.8%. At the same time we continued to upgrade our internal processes, seeking both improvements in efficiency and strict cost control, which we believe has resulted in an increase in our profitability.
In 2011, we increased the share of value-added and processed products in our sales, which increased from approximately 28% in 2010 to approximately 37% in 2011, primarily as a result of the acquisition of Keystone, investments in the Seara brand and Seara’s new products launch like lasagnas, ready-to-eat meals, pizzas, sliced meats and sandwiches, as well as specialty beef cuts. In addition to expanding its national presence, Seara launched several product lines targeting the export market, including hamburgers, breaded products and ready-to-eat meals, which were shipped to customers in South America, Europe, Asia and the Middle East.
Our strategy to further strengthen the Seara brand was reinforced by an agreement for the exchange of assets with BRF in December 2011. Once concluded, this will allow us to gradually increase our domestic sales and practically double our Brazilian nominal installed production capacity of processed and value-added products by 2013. As a result, we will be closer to our goal of generating 50% of our revenue from this product category and increasing the stability of our operating margins.
In order to take advantage of the growing opportunities in the Chinese market and expand our presence in that country, which we consider one of the major drivers of global protein demand growth, we established two Chinese joint ventures through Keystone, one of which, Keystone-Chinwhiz (60% Keystone – 40% Chinwhiz), is building a vertically integrated poultry production chain, which began processing around 200,000 birds per day in 2012. In addition, Marfrig was the first Brazilian company authorized to export pork products to China.Top