The Group

The food market is one of the most dynamic in the world, with an enormous level of synergy between sectors and regions, as well as significant volumes of shipments handled through a sophisticated multimodal logistics system. Marfrig is one of the biggest companies in this market. Its leadership extends into the sectors of processing and product distribution of beef, pork, lamb and poultry. The domestic and international markets receive fresh, processed and industrialized food products.


However, the Group’s operation goes beyond this, supporting agribusiness in terms of benefitting from the gains in scale in global markets, as well as by distributing other generic food products, such as vegetables, fish, frozen and canned parboiled potatoes, as well as readymade dishes, breaded products and pastas.


With a range of products exported to more than 100 countries and a target to increase its internationalization, the Marfrig Group began 2010 with the following business units:

 

  • 31 beef slaughtering plants: 22 in Brazil, 5 in Argentina and 4 in Uruguay;
  • 17 poultry slaughtering units: 14 in Brazil and 3 in Europe;
  • 33 plants for processed and industrialized products: 15 in Brazil, 5 in Argentina, 3 in Uruguay, 1 in the United States and 9 in Europe;
  • 4 pork slaughtering units in Brazil;
  • 1 turkey slaughtering unit in Brazil;
  • 5 lamb slaughtering units: 2 in Brazil, 2 in Uruguay and 1 in Chile;
  • 4 of its own feedstock manufacturing plants for poultry and pork;
  • 2 tradings (Chile and the United Kingdom).

Marfrig, the fourth largest producer of beef and beef products in the world, also had the monthly installed capacity on December 31, 2009, to produce approximately 45,400 tons of processed and industrialized products and 31,500 tons of leather products. These figures are growing every year, underscoring the Company’s profile, with its cutting edge technology throughout the production process, which has made it the second largest producer and exporter of food products based on the meat from poultry and pork in Brazil (with the acquisition of Seara), the second largest company in Northern Ireland (and one of the leaders in chicken-based food products in the United Kingdom), as well as being the largest private company in Uruguay and the market leader in Argentina with its Paty brand.


The Company went public in 2007, with shares traded on the BM&FBOVESPA’s Novo Mercado, a segment of the São Paulo stock exchange that establishes rigorous criteria for Corporate Governance, among other requirements.


In 2010, Marfrig was operating with 97 plants distributed in 13 different countries.



Business Units

The Marfrig Group has divided its operations into five strategic business units: Beef Brazil & Food Service; Poultry, Pork and Industrialized (New Seara); Argentina; Uruguay and Europe. Each of these units is managed by an executive responsible for the operating and financial performance. However, all units operate according to the same guidelines.

 

Brazil (Beef & Food Service)
In 2009, Marfrig registered a slaughtering capacity of 22,300 head/day and production of 11,900 tons of processed and industrialized products a month at its 25 plants spread out in eight Brazilian states. The brands most recognized in Brazil are Bassi, Montana, Pampeano and Palatare, together with GJ in the export market. The slaughter of lamb in the Company’s Promissão unit began in April 2009, with a capacity of 1,000 head/day. The Company exported beef to more than 100 countries. The Marfrig Group is one of the leading suppliers of animal protein to the food service segment, and its clients include restaurants such as: Barbacoa, Fogo de Chão, Habib’s and Porcão.


Food service is a segment that has registered an average growth of between approximately 11% and 13% over the last five years.

 

 

 

Installed Capacity per Unit  Beef Brazil

UNITS

STATE

ACTIVITY

DAILY CAPACITY

INDUSTRIALIZED
TONS/MONTH

Tangará da Serra

MT

Slaughter

2,000

 

Bataguassu

MS

Slaughter

2,000

 

Porto Murtinho

MS

Slaughter

850

 

Chupinguaia

RO

Slaughter

1,500

 

Mineiros

GO

Slaughter

2,000

 

Paranatinga

MT

Slaughter

2,000

 

Promissão 1

SP

Slaughter/Industrialized

1,000

2,940

Promissão 2 (Frigoclass)

SP

Slaughter

800

 

São Gabriel

RS

Slaughter

1,000

 

Pampeano

RS

Industrialized

 

6,300

Extremo Sul – Pelotas

RS

Slaughter

400

 

Alegrete

RS

Slaughter

800

 

Bagé

RS

Slaughter

700

 

Capão do Leão

RS

Slaughter

800

 

Mata Leão

RS

Slaughter

200

 

Pirenópolis

GO

Slaughter

800

 

Tucumã

PA

Slaughter/Industrialized

1,500

1,680

Paranavaí

PR

Slaughter

800

 

Paranaíba

MS

Slaughter

600

 

Rio Verde

GO

Slaughter

700

 

Rolim de Moura

RO

Slaughter

1,200

 

Ariquemes

RO

Slaughter

500

 

Mãe do Rio

PA

Slaughter

200

 

São Paulo – Bom Charque

SP

Slaughter

 

945

Santo André

SP

Slaughter

 

105

Total

 

 

22,350

11,970

 

Brands and Products

Marfrig Alimentos’ portfolio of brands allows it to supply the most diverse requirements in the Brazilian market and at approximately 100 international destinations. The main brands in the largest supermarket and food retail chains in Brazil, are Bassi (special selected meat cuts), Montana (selected meat cuts for BBQs) and Palatare (fresh beef). The GJ brand is the packaging for beef exports (fresh, industrialized and processed).

 

Brazil (Poultry, Pork and Industrialized)

With the acquisition of Seara, the Marfrig Group became the second largest producer and exporter of poultry and pork meat in Brazil according to data released by ABIPECS (the Brazilian Association of Beef Producers) and ABEF (The Brazilian Association of Chicken Exporters). The Company’s installed production capacity in 2010 stands at 2.4 million chicken/day at 14 plants in six states; 10,400 porks/day in 4 plants located in three states; 30,000 turkeys/day at its plant in the state of Rio Grande do Sul. It also produces 30,500 tons of industrialized and processed products a month in nine plants in six different states. The Group’s brands are recognized nationally and internationally, and include: Seara, DaGranja, Mabella and Pena Branca.

 

Brands and Products

The Group’s strategy is to transform the Seara brand into a global Marfrig brand, while the other will remain under the Seara umbrella, with regional penetration. Brands such as Mabella, Pena Branca and DaGranja will be regional brands increasing the range of customer choice and expanding the presence of our products in the retail chains throughout the Country.

 

 

 


Installed Capacity per Unit Poultry, Pork and Industrialized

 

 

UNITS

STATE

CHICKEN/DAY

PORK/DAY

TURKEYS/DAY

INDUSTRIALIZED
TONS/MONTH

DaGranja – Lapa

PR

240,000

 

 

955

DaGranja – Uberaba

MG

160,000

 

 

 

Pena Branca – Amparo

SP

160,000

 

 

 

Pena Branca – Jaguariúna

SP

160,000

 

 

 

Pena Branca – São José do Rio Preto

SP

 

 

 

3,045

Pena Branca – Roca Sales

RS

 

 

 

3,360

Pena Branca – Caxias do Sul

RS

160,000

 

 

 

Pena Branca – Ipumirim

SC

160,000

 

 

 

Braslo

SP

 

 

 

3,150

Kilo Certo

SP

 

 

 

1,260

Prontodelis

DF

 

 

 

420

Caixas do Sul

RS

 

 

30,000

 

Sidrolândia – Seara

MS

178,000

 

 

 

Forquilhinha – Seara

SC

183,000

 

 

 

Jaguará do Sul – Seara

SC

123,000

 

 

 

Nuporanga – Seara

SP

183,000

 

 

 

Jacarezinho – Seara

PR

188,000

 

 

 

Itapiranga – Seara

SC

183,000

 

 

 

Seara

SC

185,000

4,100

 

 

Dourados – Seara

MS

 

2,100

 

9,240

Mabella – Frederico Westphallen

RS

 

2,200

 

1,911

Mabella – Itapiranga

SC

 

2,000

 

 

Carroll's

MT

 

 

 

 

Total

 

2,423,000

10,400

30,000

30,481

 

 

Argentina (Marfrig Quickfood)
Marfrig is the largest company in the sector in terms of beef production, sales and export, with a market share of 63% in the hamburger segment with its Paty brand. The Group’s sales in the country are made directly to the local market and exports largely concentrated in special cuts. In South America and Argentina, the Marfrig Group has the largest Hilton Quota1, operating five slaughtering units with a capacity of 3,900 head/day; five plants producing industrialized products with a capacity of 5,313 tons/month and three confinements with 53,000 head of cattle.

1. Hilton Quota (“Cota Hilton”) is an export quota of high-quality and value boneless beef that the European Union grants annually to beef producing and exporting countries. In practice, Argentina has the highest quota, with 28,000 tons per year, which represents half of the total Hilton Quota delivered to Europe. The name comes from the commercial agreement signed at GATT (General Agreement on Tariffs and Trade) at the so-called Tokyo Round, in 1979, held at a hotel owned by the Hilton chain. At this round, the European Union agreed to establish a quota for high-quality beef exports to its market and other nations. In Argentina, the 28,000 tons of Hilton Quota are allocated to cold storage companies and groups of producers based on the criteria in the existing norm established for this purpose, which is linked to the export performance of each company.

  

Installed Capacity per Unit Argentina

UNITS

ACTIVITY

BEEF
SLAUGHTER

INDUSTRIALIZED
TONS/MONTH

AB&P

Slaughter

800

 

Quickfood

Industrialized

 

1,785

Quickfood Baradeiro

Industrialized

 

1,155

Quickfood San Jorge

Slaughter/Industrialized

700

1,785

Quickfood Vila Mercedes

Slaughter

900

 

Mirab

Industrialized

 

210

Mirab

Packaging and distribution

 

 

Estância del Sur

Slaughter

800

 

Vivoratá (Best Beef)

Slaughter/Industrialized

700

378

Total

 

3,900

5,313

 

 

Brands and Products
A variety of options to supply the most diversified markets is a central characteristic of Marfrig’s business. In Argentina, the Group operates with the Paty brand (the market leader with a share of approximately 63% in hamburger sales), Quickfood (a traditional brand that has been on the market for more than 60 years), Aberdeen Angus (high-quality selected cuts) and La Morocha (cuts for export), as well as Pemmican and Mirab of Beef Jerky in the USA. The production of Beef Jerky in Argentina, Uruguay and Brazil is exported to the USA, Japan and Europe.


 

 

 

 

Uruguay (Marfrig Tacuarembó)

The operations of the Uruguay Division account for approximately 30% of total production and 26% of beef exports in the country. Tacuarembó – Mafrig is the largest private company in the country, and has four beef slaughtering units, two lamb slaughterhouses and three plants for industrialized products.

 

The division also controls and consolidates the operations in Chile, where Patagonia Cold store produces lamb with a capacity of 3,000 head/day and the trading company; Quinto Cuarto, which imports and exports products based on animal protein (beef, pork and chicken) from Argentina, Uruguay and Brazil. In 2009, the Uruguay division had an installed capacity of 3,900 head of beef/day and 8,400 lambs/day. It also had an installed production capacity of 5,648 tons of industrialized products per month.

 

Capacidade Instalada por Unidade  Uruguai

UNITS

COUNTRY

ACTIVITY

BEEF
SLAUGHTER/DAY

LAMB
SLAUGHTER/DAY

INDUSTRIALIZED
TONS/MONTH

Colonia

Uruguay

Slaughter/Industrialized

1,200

 

630

Inaler

Uruguay

Slaughter

750

3,400

 

Tacuarembó

Uruguay

Slaughter/Industrialized

1,000

 

788

Cledinor (La Caballada)

Uruguay

Slaughter

950

2,000

 

Frai Bentos

Uruguay

Industrialized

 

 

4,200

Patagonia

Chile

Slaughter/Lambs

 

3,000

 

Quinto Cuarto

Chile

Deboning and sales

 

 

 

Total

 

 

3,900

8,400

5,618

 

Brands and Products
In Uruguay, Marfrig operates under the Tacuarembó brand for fresh beef products; Viva, for special beef cuts; Bernina for processed and industrialized products exported to the main European markets; and Zenda (tannery), which supplies leather to the main car manufacturers and airlines. The Patagonia brand provides packaging for lamb products supplied worldwide.

 

 

 

 

Europe (Marfrig Moy Park)

The Marfrig Group acquired the companies in Grupo OSI in Europe in 2008, represented by Moy Park, Kitchen Range and Albert Van Zoonen. As a result, it became the largest producer of chicken meat products in the UK. A new beef cut operation was started up in 2009, increasing the company’s processing capacity. Among Moy Park’s main customers are the large retail chains in the UK, such as Tesco, Sainsbury’s, Waitrose, as well as the restaurant chains McDonald’s, Morrison’s and KFC.


With offices located in Northern Ireland, England, France and Holland, Moy Park is the market leader in the chicken segment, with an estimated share of 30%, divided 40% in the selected cuts market and 60% in cooked cuts. Moy Park’s sales are concentrated in the large retailers and distributers in the UK, which is our main client.


The European division has an installed capacity distributed in three plants with a slaughter capacity of 646,000 chickens/day; nine plants for processed and industrialized products with a capacity of 11,200 tons a month and two trading companies in the UK (Weston), which were incorporated by the European Division.

 

Brands and Products
The purchase of Grupo OSI’s operations in 2008 gave Marfrig access to the main distribution channels to retail chains in the UK and Europe. The brands Albert Van Zoonen produces and distributes frozen products in Holland, while Moy Park is in Northern Ireland, the UK and France. Kitchen Range Foods is a brand of food and bakery products sold throughout the UK.

 


 


Installed Capacity per Unit Europe

UNITS

COUNTRY

ACTIVITY

CHICKEN
SLAUGHTER/DAY

INDUSTRIALIZED
TONS/MONTH

Craigavon (MoyPark)

Northern Ireland

Industrialized

 

3,444

Granthan (Moy Park)

England

Industrialized

 

2,520

Wisbech (Moy Park)

England

Industrialized

 

1,470

Huntindton (Moy Park)

England

Industrialized

 

840

Peterborough (Kitchen Range)

England

Industrialized

 

315

Henin-Beaumont (Moy Park)

France

Industrialized

 

1,680

Marquise (Moy Park)

France

Industrialized

 

420

Schagen – AVZ (Moy Park)

Holland

Industrialized

 

315

Dunganon (Moy Park)

Northern Ireland

Slaughter

230,000

 

Anwick (Moy Park)

England

Slaughter

270,000

 

Ashbourne (Moy Park)

England

Slaughter

146,000

 

CDB Meats

England

Industrialized

 

210

Weston

England

Sales

 

 

Total

 

 

646,000

11,214

 

 

Organogram and Shareholder Structure

 

 

The structure of the Marfrig Group can be shown in the following organogram (from 2010):
     

     
And the following shareholder structure:
 
     
OPERATING
HOLDINGS OR NON-OPERATING