Brazilian meat company BRF will sell some operational units in Europe, Thailand and Argentina as part of newly approved restructuring plans.
The company will focus mainly on Brazil, Asia and markets in the Muslim world – all regions, BRF said, where it “occupies a leading position and has strong competitive advantages”. Production for Muslim-majority markets would be focused on Turkey, where it already operates a number of plants through its subsidiary Banvit.
The plan also includes selling off real estate and non-operational assets, as well as minority interests in other companies, with BRF setting a target of BRL 5 billion ($1.28 billion) through the sale of assets.
BRF was keen to point out that, in the event it reduced its operational activity in a country, export trade to that country would continue.
The company’s previously announced Brazilian factory restructuring plan will continue as part of an increased focus on the domestic market for BRF. The main goal is to adjust production to suit market demand. The initiative, which began in March, includes adjustments to the production lines, collective paid leave and a reduction of around 5% in the number of employees at BRF plants in Brazil.
In a statement signed by chief financial officer Lorival Nogueira Luz Jr, BRF said: “Within the next 60 days, final adjustments will be implemented in 22 of the 35 plants in the country with the objective of minimising the impact of these changes on the local communities.”
The company is still reeling from the impact of the so-called ‘carne fraca’ scandal; officials from BRF, as well as a handful of other Brazilian companies, were accused of paying inspectors and politicians to overlook potentially contaminated or rotten meat, which was due for export.
As a result, exports to major markets including the European Union were halted, and the company has since responded with a number of high-level changes.
Chairman Abilio Diniz and CEO Pedro Faria both left the company, while last month former Petrobras CEO Pedro Parente was unanimously selected to lead the company as BRF’s new global CEO. He succeeds Nogueira Luz Jr, who had been in interim charge since Faria left the company.
The consequences of the scandal have cut hard and deep: in May the company’s first-quarter trading statement included a loss of BRL 114 million ($32 million) despite rising domestic sales, partly as a result of the trade bans and the reduction of production capacity at five of its facilities.
© FoodBev Media Ltd 2019