US’s Kraft and Brazil’s Sadia Join Forces

Brazilian Sadia US company Kraft and Sadia S.A., a Brazilian food firm, have established a joint venture for the production, trade and distribution of cheese under the brand Philadelphia, produced by Kraft, together with cheeses and pâtés produced by Sadia.

The announcement of the joint venture, last week, forecasts initial investment of 30 million Brazilian reais (US$ 17.8 million) in the Kraft unit in Curitiba (capital of the southern Brazilian state of Paraná). The beginning of activities of the new company is forecasted for the second half of August 2008.

The estimate is that the company should have revenues of 40 million reais (US$ 23.7 million) in the first year of activities. Apart from production of dairy products, the contract signed between both parties forecasts that Sadia should exclusively trade and produce Kraft cheeses in Brazil, as well as the items to be produced in the new factory. 

According to the vice president of the board of governors at Sadia, Eduardo d'Avila, if market conditions allow it, within three to five years a new unit should be built.

In a press statement, the Investor Relations director at Sadia, Welson Teixeira Júnior, stated that "this partnership with Kraft represents an important step to strengthening the company in the cheese sector".

The executive also stated that the union "is in perfect agreement with the growth strategy and with creation of value for the company and for its shareholders."

According to analysts, this joint venture is one more Sadia step in the direction of diversification of its activities. This way, it expands its production scale and competitiveness, getting ready to face giants in the sector, like Perdigão.

The main Sadia competitor has been operating in the dairy sector since it purchased Batávia, also headquartered in Paraná, in 2006. In the following year,

Perdigão became the leader in the UHT milk sector after purchasing Eleva, in the southern Brazilian state of Rio Grande do Sul. The operation placed Perdigão ahead of Sadia in revenues and in market value.

Sadia, established in Santa Catarina in the 1940s, has an industrial park consisting of 14 industrial units – 13 in Brazil and one in Russia. The group also has two agricultural units as well as distribution centers in seven Brazilian states.

Abroad, the company has commercial offices in 11 countries: Panama, Chile, Uruguay, Argentina, Germany, England, Russia, Turkey, the United Arab Emirates, China and Japan. The company, which has 52,000 employees, is among the 40 main Brazilian exporters and also among the main food sector companies in Latin America. In the end of 2001, the group reached the second place in the Middle East in the poultry market.

Kraft is one of the world's largest food sector companies, with business in 150 countries. The group owns 50 brands, of which some of the best known by Brazilian consumers are Philadelphia cream cheese, Nabisco and Oreo biscuits and Milka chocolates. The company, which has 990,000 employees worldwide, had global profit of US$ 100 million in 2006.

Omar Nasser works for Fiep (Federation of Industries of the State of Paraná).

Anba

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