BRAZIL- According to a stock-exchange announcement on 28th February, Brazilian meat processor, BRF, plans to sell its pet-food business after registering a US$114.7 mln net loss in the fourth quarter.
BRF, the result of the 2009 merger between Brazillian Sadia and Perdigão, announced that it had hired Banco Santander as a financial advisor for the sale of the pet food arm and that it is already in early-stage discussions with potential buyers.
BRF’s investment in pet food intensified in 2020, as the company set a target to triple its sales revenues over the next decade by focusing on areas such as plant-based proteins, ready meals, and pet food.
Becoming “one of the largest and most relevant players in the Brazilian pet food market by 2025” was part of the company’s overall corporate strategy for 2030.
In 2021, BRF acquired two Brazil-based pet food makers Mogiana Alimentos and Hercosul.
According to Bloomberg, BRF controls about 10% of the fast-growing Brazilian pet-food market with brands including Balance and Gran Plus.
While becoming a leading pet food processor was the plan for BRF, consecutive losses in the last four quarters and a 38.8% yearly fall have forced the company to restrategize and change its goals.
According to BRF’s reports to the press, the company plans to sell up to 4 billion reais (USD20.96 billion) in non-core assets this year to cut debt.
The sale of the pet business will also go a long way in mitigating losses by the company.
Following the restructuring after the sale, BRF will focus on its main business of chicken, pork, and processed food, while considering plans to reduce its debt leverage.
Meanwhile, in the stock exchange filing, BRF clarified that it has no intention of merging the company with Brazilian meat peer, Marfrig Global Foods, at this time.
Marfrig is now BRF’s biggest shareholder, having built up a stake of more than 30%.
In March 2022, Marfrig founder Marcos Molina became BRF’s chairman and, in August, Marfrig CEO Miguel Gularte became BRF’s CEO.