Long life industry expects to grow 4%

Historically volatile, long-life milk market started this year with low inventories, which has generated a dispute for the raw materials, according to the Brazilian Association of long life Milk (ABLV).
Given this high pressure scenario for the raw material, the industry has sought to pass on the increase to the final product and thus managed to rebalance the profitability in the first quarter of 2013, says the organisation. "If the raw material continue to be disputed, the industry will try to pass on," said Claudio Teixeira, who has just assumed the Presidency of ABLV.
Competition for raw material is still a reflection of the high production costs of dairy industry last year. According to the entity, the high costs forced a reduction in long-life milk stocks, which reached a critical level in September 2012-100 million litres, the equivalent of seven days of production. For comparison, stocks in the same month of 2011 amounted to 300 million liters, or 17 days.
Teixeira said that last year the industry worked with margins "narrow or non-existent". In addition to the higher costs of raw materials, the sector spraying, which has more than 80 brands, also contributed to the flatness of a thread with profitability margins are already historically low.
The period of greatest difficulty was in the middle of the second half. According to Teixeira, the long-lived industry paid an average of 5 cents more per litre of milk purchased from the producer than a year earlier. Other costs (including logistics and labor) were 10 cents over the same period in 2011. On the other hand, the average price of long life in the retail industry's sales was 6 cents below a year earlier.
Although the scenario has been leading companies-adverse difficulties, long-life milk production in 2012 grew 5.3% to 6.125 billion compared to the previous year, according to ABLV. The evolution took place of the vegetative growth of the population, but also the fact that UHT milk is gaining market share and milk pasteurized product. In the first case, sales declined 12%, to 1.3 billion gallons in 2012. The informal product fell 14.6 percent, to 1.520 billion liters last year, according to the Association.
With this advance, the long-life milk participation in sales of so-called fluid milk in Brazil reached 81% in 2012. This is a rise of three percentage points in 2011. In addition, he noted, the long life was present in 88 percent of Brazilian households last year.
For this year, the forecast is a growth of 3% to 4% in the production and sales of long life, says the ABLV. The reasons for the advance must be the same views in the past year. The timid growth in the supply of raw material in the country inhibits a greater advancement of long-life milk production. "Milk production in Brazil grows little, so the dispute [raw material] must continue", estimated the ruling ABLV, who presides over the Italac.
According to the entity, the Brazilian production of milk was 32.4 billion gallons in 2012, an increase of just 1% on the previous year.
In addition to the search of balance on the banks of the productive chain of long life, Teixeira said that the quality of the product follows a priority. In 2008, ABLV has created a quality monitoring program of long life. Since the deployment, have already been held about 80 analyses 1,600 brands marketed in the country.