Brazil's BRF aims to set up local operations in China

Food processor BRF SA plans to start producing meat in China as part of an aggressive growth plan
calendar icon 9 December 2021
clock icon 3 minute read

Reuters reports that BRF mainly serves the Chinese market via exports. But as China rebuilds its pork herd and the pandemic has rattled global logistics, a local presence, as BRF has had for years in the Middle East, will be paramount.

"To be a much more relevant player in China we need to increase local production," Patricio Rohner, BRF's vice-president of international markets, told reporters after the presentation.

He said BRF already operates in China through local partnerships in sales and distribution.

BRF does not rule out acquisitions in China, but Rohner personally prefers building the company's own factory there.

"When you buy a rival, a local producer, they don't have the portfolio that the younger consumers need," he said.

BRF Chief Executive Lorival Luz said immense cost pressure will not prevent the company from reaching goals like posting net revenue of 65 billion reais ($11.65 billion) by 2024 and 100 billion reais by 2030. He sees input prices falling in 2022 after corn, soymeal and packaging more than doubled in 2021.

"The team knows how to operate in the face of adversities," Luz said.

Although higher input prices pushed back plans to double operating profits by a year, selling more processed food products in Brazil and in markets like Turkey can help restore margins, Luz said.

Other "avenues of growth" include investing to produce cultured meats, plant-based and pet products, the latter being a segment where the company made two acquisitions this year. BRF also aims to be the second-largest Brazilian pet food company by 2025, executives said citing a 15-fold increase in production capacity after the two acquisitions.

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