BRF has signed an agreement to acquire the operations of Banvit, the largest poultry producer in Turkey, less than a week after it unveiled its new business unit set up specifically to target Muslim markets.
Turkey is the world’s largest consumer of halal chicken, accounting for around 10% of global consumption, BRF said. In Banvit, it had secured a stake in both the country’s largest poultry producer by volume and the market leader. The transaction will be via a joint venture between BRF and Qatar Investment Authority (QIA), the sovereign fund of Qatar, which will hold 60% and 40% interests respectively.
Banvit is a fully integrated producer, with facilities ranging from feed control to final food processing. The company has five feed plants, four hatcheries and five production plants across Turkey.
The deal is worth $470 million.
“The units are located in the country’s west, which concentrates the most consumers, and the east, which positions it as the only company capable of serving both the domestic and export markets,” explained BRF CEO Pedro Faria.
The assets of Banvit will be incorporated into OneFoods, the BRF subsidiary dedicated to the halal market announced last week, and led by Patricio Rohner.
Rohner said: “The acquisition of Banvit is the first step on the agenda to accelerate the growth of OneFoods, which holds market share in chicken products of approximately 45% in Saudi Arabia, the UAE, Kuwait, Qatar and Oman – countries where it operates with own distribution and a broad product portfolio.”
Despite its important role in the global halal market, Turkey’s consumption of chicken is low – around 20kg a year per person – and the penetration of processed food products is also low.
This means that the Turkish market offers excellent potential in terms of growth, Rohner said.
“In addition to the growth opportunities offered by the Turkish market, especially in processed products, we see important commercial and operational synergies to capture by integrating the operations of Banvit and OneFoods, which will further consolidate our strength and leadership in the halal animal protein market,” said Rohner.
The transaction in its first phase involves the acquisition of a 79.5% interest in Banvit, followed later by a tender offer for the remaining minority interest of 20.5%. The deal is still to obtain approval from the relevant competition authorities.
© FoodBev Media Ltd 2017