Wednesday, August 23, 2017

Products invest in new niches and in mergers and acquisitions

Sao Paulo-the resumption of growth of the sector of food will be accompanied by an intense movement of mergers and acquisitions. The process should be led by players that, despite the crisis, are highly capitalized and seeking new areas of expertise.
"The industry is shaken and must follow as well," says Elevan Financial Analyst, Raul. According to him, the companies with cash and with low indebtedness have opportunity to do "good business", which may improve your margins or complement operations.
Among the companies that are in a favourable position at the moment M white and Camil. Each, your way, you will be able to be a protagonist in the procurement process. "The M has an excellent purchase history and account with a liquid box" comments. At the end of June, the company, which operates in the pasta and cookies, had a box of R $905 million, but a lower debt to R $504 million, resulting in a net cash of R $413 million.
The Vice President of investments and controlling of M white, Geraldo Mattos junior, recently said in a teleconference that, within the process of expansion of the manufacturer, is the possibility of purchase. "The biggest jumps ever get through purchases," he said, adding that it may also include a ticket into new branches. The company recently entered into cakes and whole grains.
Another food company to be protagonist is the Camil. The company joined with an application for the opening of capital in the stock market and you can pick up in October, up to R $2 billion, according to market sources. The process is a resumption of failed attempt six years ago, to raise funds in the stock market.
According to information of the Camil, the rice and beans are highly sprayed between small, medium and large players. The five major rice companies accounted for 40.5 percent of the market, while the top five players beans, 29.2%. Euromonitor data show that the Camil is the leader in Brazil in the beans, followed by the Kraft Heinz, while rice leads ahead of Josapar-Joaquim Oliveira.
Among the purposes of the offer, is the expansion of the portfolio of brands and products in new categories, by means of "selective and strategic" acquisitions. According to the company, the non-perishable products markets with growth potential and synergies with existing branches of activity is business as flour products, canned goods, coffee, biscuits and pasta.
Amid the strengthening of major players is the growth of the sector, after a period of retraction. In 2015, production retreated 2.9 percent and sales fell 2.7%. The following year, the area had new retraction: 1% and 0.6% in the recipe. For the Brazilian food industry Association (Abia), the industry will resume the expansion, in terms of production, with a high between 0.5% and 0.7%. Have real sales-considering the IPCA as-deflator will advance between 0.7% and 1%, the Economist at Abia, Denis Ribeiro. "Our industry is reacting, with a tendency of recovery by the end of the year. Leave the negative is already something very good, "strengthens. In the last 12 months ended in June, the actual billing accumulates high of 1.45%, but production still back up 0.4%.
Some of the major procurement opportunities are being generated by the J&F, the holding company of investments of the Baptist family. With their controllers involved in a series of scandals, some of its main businesses were offered for sale. In June, the company sold for about R JBS''s operations $1 billion located in Argentina, Paraguay and Uruguay, to the refrigerator. Another subsidiary of the holding company of Baptist family of animal protein is put up for sale the Moy Park, with expertise in the field of chickens and processed foods in Europe, which had been purchased from the Marfrig, in 2015, $ $1.5 billion. In July, it was the turn of J&F sell your dairy company Vigor, which is also a partner of the Itambé, for the Mexican group Lala, by $5.7 billion.
The BRF, one of the main strategies is next abroad. At the beginning of the year, has a sovereign wealth Fund of Qatar and acquired the Turkish Banvit, through the OneFoods, your subsidiary responsible for concentrating the assets related to the production and distribution of products to the Muslim market.
Already in the internal scope, the focus of the BRF is the creation of a third brand, focused on low-income consumers, and which do not compete with their other products. "Now it will be positioned in the high Sound, Perdigão and average brand new on low incomes". The new operation will start at the beginning of 2018, but executives have declined to give further details. This new segment represents a consumption of about 30% of the market for processed foods, estimates the BRF.
According to ABIA, pull meat derivatives industry revenue in a consolidated manner, with R $133.1 billion, out of a total of R $497.3 billion.
DCI – 22/08/2017 News Item translated automatically
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