The Brazilian Meat & Livestock Sector 4 TH Edition Background and Study Objectives São Paulo 2015 1
The Brazilian Meat & Livestock Sector 4 TH Edition Background and Study Objective This will be the 4 th edition of the Brazilian Meat & Livestock Report. The report is currently under development and will be delivered to clients in mid-july 2015. The Brazilian meat sector is classified as one of the most dynamic in the world. Currently, Brazil is the 2 nd largest meat producer in the world and number one in international trade. Similar to the past three reports, this effort will also give considerable attention to the supply side of each of the three livestock activities. Data and information will be provided regarding characterization of farmers and ranchers, their management practices as well as their production costs. Aside from a detailed analysis of each meat chain, information will be provided on the prospects for traceability of the three main segments of meat in Brazil. Poultry Meat While Brazil has a reputation for beef production, poultry exports now lead in meat protein exports. The competitive edge lies in the relatively low production costs of important raw materials corn and soybean meal and the well-developed integrated farming systems in place. Furthermore, the population consumes a large portion some 70% - of poultry meats, a critical factor when equating global crises as seen in 2008 and 2009. Nurturing this meat demand on the domestic side is the fact that Brazil s disposable income level has been increasing, and consequently, has shown strong signs of the growing meat protein demand. On the industry side, consolidation has been the prime word. Sadia and Perdigão the leading players in the poultry industry have merged into BR Foods and, other non-traditional players JBS and Marfrig have been taking stakes in the sector. With this in mind, the report will also cover the implications of industry concentration on the supply side of the chain. The situation of second tier players will also be addressed in this effort. Beef At the industry level, a consolidation process has taken place in the last four years. Four years ago, 25 % of the beef slaughter was in the hands of three companies. This figure now stands at over 1/3 for just three companies JBS, Marfrig and Minerva. Most importantly, the leading players JBS and Marfrig have taken their operations overseas and both companies have considerable stakes in the beef (and poultry) markets on a global basis. On the domestic front, the last few years has been characterized by a number of companies going out of business or entering chapter 11.These trends both at the industry and at the livestock level will be described and analyzed in this report. In considering the supply of live animals and the need to improve commercial relationships with industry, case examples will be given which will indicate the increasing or decreasing level of integration in the beef chain and the gradually growing importance of feedlot operations. 2
Pork Meat Different from the beef and poultry meat segments, Brazilian pork consumption has been rather static over the past 10 years. As a result, most of the leading players BR Foods, JBS and Marfrig are concentrating efforts on processed products for the domestic market and special cuts for the export market. Exports out of Brazil improved at the end of 2014 due to a Russian embargo on pork imports from the USA and the reopening of the South African market. With the high prices for beef in the local market, in late 2014 and early 2015, the local market has shown solid signs of recovery. Meat Availability Forecast As was done in the last edition of this report, an update of the domestic supply and demand for meats will be estimated to give the reader a better idea of potential meat exports. This forecast will be for a 10-year period and will give importance to the main drivers for production, export and imports. The forecast will include a gap analysis from the previous report and qualify any major changes. Study Methodology The report will be based on Informa Economics FNP s vast information database on the livestock and meat segment. The report will heavily rely on extensive desk research by the study team as well as in-depth interviews with specialists in each of the meat chains. Report Content: The report will be completed in mid-july 2015 and will be delivered to clients in mid-july 2015. Similar to past reports, the effort will cover the entire value chain, from farmer/rancher to final consumers in Brazil and export markets. Aside from a detailed analysis of the three meat segments, company profiles of the major industry players will be included. Data in the report will cover full-year 2014. Who Should Buy this Report? This study is designed to bring value to all players involved in the value chain for beef, pork and poultry products. Some of the players that may require data and information on this important sector include: Foreign investors and financial institutions involved in global investment strategies in the food chain; Industrial players looking at global expansion of their meat operations; Companies looking to expand their operations in feed rations and other feed supplements and ingredients; Manufacturers of feed equipment; International meat traders; International companies involved in the logistics of meat trade; Food service and fast food companies; Animal health companies interested in expanding operations in Latin America and Brazil; 3
Companies providing services to the meat segment. Study Outline Below is an outline of the 3 rd edition of this report. This outline will be replicated for the 4 th edition along with some additions. As deemed necessary, other subjects may be included based on potential client needs. Overview of Brazilian Meat and Livestock Sector Climatic Maps Geopolitical Maps Transport Infrastructure Maps Major Port Maps Beef Segment Livestock Data and Information o Herd Size Evolution by Region and State o Predominant Breeds o Production Systems o Farm Characterization o Feedlot Operations o Performance Indicators (mortality rate, birth rate, weight gains, etc.) o Disease Problems o Production Costs o Trends Slaughter and Industrial Segment o Slaughter Inspection Systems o Slaughter Evolution by Region and State o Procurement Systems o Market Shares of Major Players o Profiles of Major Players Company Name Ownership Headquarters Founding Date Employees Slaughter and Processing Locations Product Mix Sales Estimates Investment Programs Other Relevant Information o Apparent Consumption Data o Export Data Market Shares Evolution in Past Five Years Trends Key Success Factors 4
Broiler Segment Livestock Data and Information o Flock Size Evolution by Region and State o Predominant Breeds o Production Systems o Performance Indicators (mortality rate, birth rate, weight gains, etc.) o Disease Problems o Production Costs o Feed Ingredients and Supplements o Trends Slaughter and Industrial Segment o Slaughter Evolution by Region and State o Procurement Systems o Market Shares of Major Players o Profiles of Major Players Company Name Ownership Headquarters Founding Date Employees Slaughter and Processing Locations Sales Estimates Product Mix Investment Programs Other Relevant Information o Apparent Consumption Data o Export Data Major Exporters Market Shares Evolution in Past Five Years Trends Key Success Factors Pork Segment Livestock Data and Information o Herd Size Evolution by Region and State o Predominant Breeds o Production Systems o Performance Indicators (mortality rate, birth rate, weight gains, etc.) o Disease Problems o Production Costs o Feed Ingredients and Supplements o Trends Slaughter and Industrial Segment o Slaughter Evolution by Region and State o Procurement Systems o Market Shares of Major Players o Profiles of Major Players Company Name Ownership 5
o o Headquarters Founding Date Employees Slaughter and Processing Locations Sales Estimates Product Mix Investment Programs Other Relevant Information Apparent Consumption Data Export Data Major Exporters Market Shares Evolution in Past Five Years Trends Key Success Factors Meat Products - Distribution and Logistics in Brazil o Current Channels o Brazil Market Outlets Wholesalers Retailers Institutional o Market Prices Final Consumer Observations Traceability Section o Historical Perspective o Current Situation Beef Poultry Pork o Drivers o Trends Overall Trends o Geographics o Supply Chains o Other Relevant Factors Brazilian Supply & Demand Forecast of Beef, Poultry and Pork Meats Opportunities Challenges Key Success Factors Appendix: o o Listings of: Beef slaughterhouses Broiler Operations Hog Slaughterhouses Other Relevant Agencies and Entities Other pertinent data/information 6
Study Team Informa Economics FNP Informa Economics FNP, founded in 1989, is a subsidiary of the Informa Economics Group. Informa Economics FNP is a leading provider of agricultural, livestock and agribusiness information on the Brazilian market. Informa Economics FNP has over one thousand clients, both based in Brazil and all continents. Informa Economics FNP s services include: Publications on the agricultural and livestock sector in Brazil; Newsletters on the meat sector and biofuels; Ad hoc consulting services; and, Market research services in Brazil. Richard Brostowicz has over 35 years of experience in Brazil and 25 years of experience in Brazilian agriculture, and will lead the Informa Economics FNP team. Project coordination will be the responsibility of Ana Andrade. Richard J. Brostowicz, CEO of Informa Economics FNP, has been with AgraFNP since 2003. In this period with the company, Richard has supervised and worked directly on over 150 projects in consulting and market research as well as other risk analysis, feasibility and site location efforts. He began his career at AgraFNP in the Business Intelligence area with focus on market research initiatives with international clients. Prior to AgraFNP, Richard worked some 24 years at Monsanto s Brazilian operation located in São Paulo. In this company, he worked in numerous departments, including Planning, New Business Development, Manufacturing and ended his career at Monsanto, establishing the Business Intelligence Department. Some of the highlights of his career at Monsanto include the successful approval of Nutrasweet in Brazil, approval of Lactotropin (Bovine Somatotropin) for commercial use in Brazil and the reorganization and implementation of a hybrid distribution system for agricultural chemicals and seeds. Richard also worked some eight years as a financial director for a venture capital firm in Brazil and a few years in consumer market research. He received his bachelor s degree in marketing from the University of Wisconsin and later completed a post-graduate program in economics with OAS Organization of American States. Richard has been directly involved with previous editions of this report. Ana Andrade. Ana has a Bachelor s Degree in Animal Science by the Universidade Estadual Paulista/UNESP, and a Graduate certificate in Business Administration by the Fundação Getúlio Vargas/ FGV and the University of California, San Diego / UCSD. Currently she is a Market Analyst of the Technical Department, with activities including the commodity reports (soybeans, corn, cotton and sugarcane) and the livestock reports. In addition, Ana works on consulting project activities with important influence in national and international markets, with a focus on agribusiness companies. Prior to FNP, Ana worked for three years as an animal scientist and as a financial analyst in a company with cold storage units in the main Brazilian ports, focusing on food and drink. Recently coordinated a project with a local company to develop a program for quality beef products in Brazil, including the development of a structure for the entire value chain. Ana also is responsible for the monthly consulting report on meat prospects in Brazil. 7
José Vicente Ferraz, senior consultant, is one of the founders of AgraFNP and has been with the company since its inception in 1989. He is a graduate from the University of São Paulo s agronomic division (ESALQ) and received his MBA from Fundação Getúlio Vargas. Among some of his major accomplishments at AgraFNP, Vicente was responsible for the launch of the company s key yearbooks AgriAnual and AnualPec. He has coordinated, worked on or has been involved in over 200 ad hoc consultancy efforts for the company ranging from commodity crops, reforestation, beef cattle to biofuel feedstocks. Over the past ten years, Vicente has specialized in the livestock sector and is considered one of the experts in the Brazilian beef sector. Prior to his career at AgraFNP, Vicente held executive positions with the Bonfiglioli Group, and Fundap and RSL, two Brazilian consulting companies. He is also a full member research of NAIPPE, a center of high studies on public policies and strategic issues and has been directly involved in the past editions of this report. Victor Carvalho. Victor is an agronomist from Esalq/USP with specialization in finance by the University of Minnesota. He is currently responsible for all strategic reports, including the commodity reports (soybeans, corn, cotton and cane), the livestock report and the land acquisition and rental reports. In addition, Victor is responsible for all ad hoc consulting services, which deal with national accounts. Some of his efforts in ad hoc consulting focused on a special report on farming opportunities, a business identification effort for cattle, due diligence effort and a consulting job for grains, vegetables and beef meats. Prior to FNP, Victor worked as a hedge trader for three years with a Russian company focus on soybean trading, crushing and storage and before that, worked as a commodity trader in an investment bank. Ary Tranquilini. Ary is an agronomist from the University of São Paulo/ESALQ with 36 years of experience in the agricultural sector in Brazil. He worked with both Brazilian and foreign groups in farming operations for grains, livestock, fruits and vegetables. He has been working as a senior consultant in the last four years at Informa Economics FNP. Before Informa Economics FNP, he worked as a consultant, and operated a retail outlet store for agricultural inputs in São Paulo State. He also has eight years of experience living in the USA in agricultural exports and another seven years in Africa and Europe in large farms development programs. His early career experience was focused on managing several farming operations in many different regions of Brazil. Camila Montebelli, Business Intelligence Coordinator, graduated in Agricultural Engineering from ESALQ at the University of São Paulo (USP) and post-graduated in Business Intelligence from FIA - Business School. Camila is part of the Informa Economics FPN Business Intelligence team since 2013. During her period of study, she worked in various areas of agribusiness, including plant breeding, agricultural marketing, quality management, and farm management. Camila was an interchange student at The Ohio State University, where she studied international business and marketing, and had the opportunity to develop a market research project for an American company. Camila was an intern at a multinational market research firm focusing on agribusiness. Most of Camila s efforts at FNP have been focused on in-depth interviews for farm equipment companies, foliar fertilizer segment, biostimulants, animal nutrition segment and biopesticides. 8
Marcelo Claudino. Marcelo has over 20 years of experience in agribusiness where followed and delivered more than 350 research markets. Prior to joining Informa Economics FNP, was manager Intelligence and Market Research in associates Multinational companies in Agribusiness (Syngenta, Novartis and Sandoz) and Agnelo Agricultural Research and Market Advice. A specialization in Strategic Intelligence (FIA / USP) and Master Degree in International Economics (UPMF - Grenoble-FR), with a degree in Agricultural Engineering (ESALQ / USP). He is currently a Market Intelligence Manager and New Business at Informa Economics FNP. Ana Carolina Burt. Ana Carolina is na Agronomic Engineer graduate and post graduate (MBA Agribusiness) from the Escola Superior de Agricultura Luiz de Queiroz, University of São Paulo. Before working at Informa Economics FNP, Ana Carolina has worked in multinational BASF Crop Protection in the areas of Business Development, Crop Strategic Marketing Brazil, PMO (project management of new products and innovation process) and Sustainability and Stewardship for Latin America. Prior to BASF Ana Carolina has consulting experience serving large national and multinational clients in the segments of biofuels, bioenergy, agricultural trades, agro-industry, cement industry, aluminum with carbon credit projects, carbon management strategy, mapping and development of new business opportunities. Experience managing projects for Latin America with multidisciplinary teams and development of global and regional strategies. She is currently Business Intelligence Manager at Informa Economics FNP. Other professionals at Informa Economics FNP will provide their expertise on an as needed basis. Study Fees The study fees are US$ 5,000.00 or equivalent in other currencies. Those that purchase by April 30 th will receive a discount of US$ 500.00. These fees will be billed 50 percent upon the study s initiation and 50 percent upon delivery of the report. Some companies may only be interested in specific sections of the report. As such, FNP has developed the options and prices as follows: Options: Early Bird Post Start-Up Full Report US$ 4,500 US$ 5,000 Poultry Section US$ 2,300 - Pork Section US$ 2,300 - Beef Section US$ 2,300 - Poultry/Pork Sections US$ 4,400 - Final Product: The final report will be sent to the client as a PDF attachment. If client wishes, a CD can also be provided. 9
ENROLLMENT FORM Yes, I want to purchase the multi-client study entitled The Brazilian Meat & Livestock Industry 4 TH Edition. The cost of the study (and options) are: US$ 5,000 or US$ 4,500 if the order is placed by Abril 30, 2015. US$ 2,300 for beef section only US$ 2,300 for poultry section only US$ 2,300 for pork section only US$ 4,400 for poultry and pork sections only Please have someone contact me to provide further information. FAX to Informa Economics at (901) 766-8158 FAX to Informa Economics FNP at 55-11-4504-1411 Name: Signature: Title: Company: Street Address: City, Province/State, Code: Telephone: Fax: E-mail Address: PAYMENT METHOD Check Enclosed VISA MasterCard American Express Card Number: Expiration Date: Signature: Mr. Tom Scott President and Chief Operating Officer Informa Economics, Inc. 775 Ridge Lake Blvd., Suite 400 Memphis, TN 38120 Phone: (901) 766-4586 Fax: (901) 766-8158 Email: tom.scott@informaecon.com Mr. Richard Brostowicz CEO Informa Economics FNP, Brazil Rua Bela Cintra, 967 11. Floor 01415-000 São Paulo SP Brazil Phone: + 55 11 4504-1414 Fax: + 55 11 4504-1411 Email: richard.brostowicz@informa.com 10