With larger factory, CCGL wants to win 15% of the Brazilian market of milk powder

SÃO PAULO-Rio Grande do Sul Ltda Central cooperative (CCGL) opened last week to expand the plant located in Cruz Alta, Rio Grande do Sul, with the introduction of a second production plant. With the investment of us $ 130,000,000, the Group R$ high aimer. Wish to bet at potential for sales of the main product manufactured in the plant of High Cross, the powdered milk-the unit also makes chocolate milk cream, but in smaller quantities. According to the President of the cooperative, Caio Cezar Vianna, CCGL today holds 8% of the national market of milk powder. The objective is, in the coming years, reaching 15% market share.
According to him, the only factor that prevented the cooperative to gain more space in the market was precisely the productive structure, which was insufficient. "Three years ago we''re operating with the capacity fully packed at the peak of the harvest", explained in an interview with Broadcast Agro, real-time service State Agency.
With the expansion, the production capacity will pass from the current 1 million liters of milk/day to 2,200,000 litres/day. The new unit is already operating in the testing phase. Vianna expects the structure is perfectly adjusted to the end of August. From there, the CCGL wants to increase the milk gradually. "Imagine having the second plant working with 100% capacity in a horizon of five years. Thinking optimistically, three years. And, with pessimism, six, "he said.
Today, the North and northeast regions-which are the largest consumers of the country''s milk powder-receive 90% of the production of CCGL. With the increased production, the cooperative wants to achieve also the Southeast. Another focus of attention is the external market. The CCGL is enabled for export by the Ministry of agriculture. In 2016, however, recovery of milk in the domestic market, associated with a time of low prices in the international market, made the export disadvantage. "At any time, if the frame change, we can send this product again for off, regulating the prices of the internal market, avoiding '' superofertar '' domestic market" evaluated. "We want to be prepared for that."
Vianna explains that the decision to focus on the milk powder is strategic since it has a higher durability and, in addition, is a dehydrated product, which reduces in eight times the original volume of the milk. "Therefore, allows for a cheap storage and logistics also cheap, what guarantees us a greater commercial flexibility", commented.
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Today, the Rio Grande do Sul lives a time of fall in the production of milk. Some producers have abandoned the activity, dissuaded by high production costs, especially the cost of animal feed because of skyrocketing in price of corn. Later, the situation was aggravated by the offseason, affected by rain and, as a result, by the intense cold and frost.
Vianna recognizes that CCGL felt this decrease in volume picked up, but that, in the case of the cooperative, this was a "good problem", since they were operating on the roof of the ability. Now, the group will depend on an increase in the uptake of milk by producers associated to have expansion plans taken forward.
"From now on we want to receive more milk and we know that this process may be slower," he said. He is confident that the value of the product in the local market is enough to reenergize the cattleman. The Technical Chamber of Conseleite estimated that the reference price of milk paid to producers in Rio Grande do Sul should increase 8.79 percent in June, reaching 1.1255 R$ per liter. In the last three months, the accumulated 13.84% is high.
Today, CCGL has a network of 3700 milk producers. The Group expects to operate the two plants close to maximum capacity, will need to raise the number of suppliers to 6000 and, yet, consider that the current producers will increase their volume.