Brazilian boom in ME as exporters grow sales
BRF brought in around 22% of its total revenue from the Middle East and Africa, second only to its domestic sales in Brazil. The firm brought in almost US$1.8 bn (€1.6 bn) from the region, through sales of over 1m tonnes of its products.
Revenue up, but profits still low
Its earnings before interest and tax for the MEA region came to around US$309,000 (€275,800), up 286% from 2014, and by far the lowest EBIT figure for its global operations. While BRF did not comment on the profit from the region, the last few years have seen the firm invest heavily in the Middle East, from its Abu Dhabi factory to the acquisition of a number of distributors – both of which it did reference in its annual report.
“The company continued the acquisition strategy in this region, acquiring the frozen foods distribution business from Qatar National Import and Export. Thus, the company began to control distribution in most of the Gulf region, strengthening its presence in the region even more, in addition to implementing an efficient process, installing a local service centre,” said the BRF annual report.
“Currently, 50% of the distribution of its products in the region is handled in-house, 25% is outsourced, but under the Company’s control (freight price, etc.), and the other 25% is carried out under the traditional model,” the report added.
Regarding the Abu Dhabi facility, which opened in 2014, the annual report said: “Given the success of this operation, the company decided to accelerate its expansion, which before was expected to be in 2020, increasing annual production from 70,000 tons to 100,000. The additional production capacity aims to meet both the increased demand in current markets as well as that of potential new markets.
“The company will increase the number of lines of products in the plant to meet the demands of each market in a flexible and personalised manner. It is also a way to make the United Arab Emirates an important centre for export,” the report continued.
JBS and Minerva on the up
Brazilian meat producer JBS saw the Middle East take a larger slice of its export business, with the MEA region bringing in US$2.2bn (€1.9 bn), equivalent to 14.3% of its international revenue in 2015. For the year before, the region made up 12.3% of JBS’s exports, worth just under US$2.2bn (€1.9 bn).
Beef producer Minerva also had a good 2015 in the Middle East, with its revenue from the region up five percentage points from 2014, making up 21% of its foreign sales, worth around US$397 m (€354.4 m). While its largest customers around the Gulf are Iran and the UAE, Minerva will be expecting significant sales in Saudi Arabia, thanks to the resumption of beef imports from Brazil and the firm’s deal with SALIC.