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Bird Flu Hasn’t Slowed Down Brazil’s Food Giant Sadia

Sadia, Brazil’s most famous food brand and a leader in the sectors it is present, continues having the Middle East as one of its main export markets.

Around 20% of the US$ 705 million company revenues with sales to the foreign market in the first half of 2006 came from the region, which was only behind the European Union.

Last year, when the company shipped the equivalent to US$ 1.9 billion, the Middle East received 26% and was the main destination for company produce.

The market is so important to the company that it even has exclusive advertising campaigns for the region. As is the case with Brazil, the advertising campaign is starred by a cartoon character.

In Brazil Sadia uses chick Lequetreque, who wears a helmet and is always in a hurry. In the Middle East the character is chicken Henrietta.

On the foreign market, apart from the Middle East, the company only has exclusive advertising campaigns in Russia. The company business in the region is run through an office in Dubai, one of the 11 the organization has abroad. Sadia has been exporting to the Arab countries since the 1960s.

Although the Brazilian chicken industry has suffered with the retraction of international consumption, caused by chicken flu, the company is still among the greatest export companies in Brazil.

In the period between January and July this year, the company was in the 15th place, according to the Federal government Foreign Trade Secretariat (Secex).

Company revenues with foreign sales dropped 14% and reached US$ 627 million in the first seven months of the year. On the Arab market, however, the company still expects growth of 5% to 10% in sales, according to information recently disclosed by the organization’s director for the foreign market, José Augusto Lima de Sá.

Investment in the Brazilian Savannah

On the domestic market the company has been expanding its business in the cerrado, the Brazilian savannah. The company forecasts investment of US$ 705 million in the midwestern Brazilian state of Mato Grosso up to 2009, being US$ 376 million invested by the company itself and another US$ 329 million by integrated producers. This is, according to the company, the greatest investment announced by the organization in recent years.

The money will be invested in the construction of two new poultry slaughterhouses and in a slaughterhouse for pork. Each of the poultry installations will have a capacity for processing 500,000 chickens a day. They will be installed in the cities of Lucas do Rio Verde and Campo Verde. The creation of 8,000 direct jobs and 24,000 indirect jobs is expected, according to the company.

When the enterprises are completed, in 2009, Sadia hopes to have additional revenues of US$ 564 million a year. Starting at the end of next year, however, the units should be producing at one third of their capacity.

Sadia is another company in the agro industrial sector that is investing heavily in the cerrado. The organization is following the strategy of other companies, like Perdigão, also in the food sector, Maggi Group, which trades agricultural commodities, as well as multinationals Bunge, and Cargill and the French Louis Dreyfus group.

According to Sadia, among the factors that influence the decision of investing in Mato Grosso are the availability of grains – as animal feed is made of maize and soy, and the state is the main producer of soy and the fourth main producer of maize in Brazil -, the climate, the availability of land for plantations and the diversification of risk, in case some sanitary problem occurs in one of the other states where the organization has units.

Since the 1970s

Sadia started operating in the cerrado in 1976, when the group inaugurated a cattle beef meat packing plant in the city of Várzea Grande, in Mato Grosso. Later, during the 1980s, the group built a soy crusher and purchased another meat packing plant in the state. All these operations were sold or leased during the 1990s and, in Mato Grosso, the company only kept its poultry slaughterhouse, also in Várzea Grande, which was inaugurated in 1992.

Still in the cerrado, in 2004, the company purchased company Só Frango Produtos Alimentí­cios, installed in the Federal District, where Brazilian capital Brasí­lia is located, and at the end of last year the organization returned to slaughtering cattle at the unit in Várzea Grande, which was leased out.

Apart from the Federal District and Mato Grosso, Sadia also has units in Rio Grande do Sul, Santa Catarina and Paraná, in the south of Brazil, and in Minas Gerais and Rio de Janeiro, in the southeast of the country.

The group has a total of 13 industrial units. It employs 46,000 people and operates with 10,000 integrated rural producers. Last year the company had revenues of US$ 3.9 billion, and profit of US$ 309 million. A total of 626 million chickens, 24 million turkeys and 3.8 million pigs were slaughtered.

Anba

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