Marfrig Global Foods SA, one of Brazil's main producers of beef, expects the Asia-Pacific region to be its principal motor for growth going forward after China and the United States opened their markets to Brazilian fresh beef in 2015, a company executive said on Monday.
Mergers and acquisitions in the region, however, are not on the company's immediate radar, Marfrig Vice President of Finance Jos? Eduardo de Oliveira Miron told Reuters. "We are concentrating on organic growth," he said. "We see growth in beef consumption in the world propelled by the Asian markets, where demand should remain robust and met mainly by imports."
Asian consumers have been the focus of other Brazilian meat exporters including BRF SA and JBS SA, which have expanded their foothold in the region through acquisitions, partnerships and joint ventures. After suffering a minor debt crisis from rapid expansion in recent years, Marfrig resorted to selling its poultry businesses in Britain and Brazil to JBS. But Miron said the company was back on stable footing.
"We are betting on sustainable growth through the reduction of leverage, continued free cash flow generation and consolidation of operations," Miron said. In September, Brazil's agriculture minister, Blairo Maggi, led a Brazilian trade mission including 40 agribusiness companies to the region, visiting China, India, Vietnam, South Korea, Thailand, Malaysia and other countries, stirring up as much as $2 billion in new trade. Miron said a small per capita increase in Chinese beef consumption could easily be equivalent to all of Brazil's current exports of beef annually of nearly 2 million tonnes.
Miron said the company's Keystone division, which focuses on supplying restaurant chains in the United States and Asia, is leading one of the company's main investments of $35 million to build a new plant in Thailand. It will have capacity to produce 20,000 tonnes of processed food a year starting in 2017. Next year, Miron said the beef division is expected to expand its sales in Malaysia, which should allow the company to export beef on the bone and raise the value of products sold there.