BRF S.A.

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BRF S.A.
Sociedade Anônima
Traded as BM&F BovespaBRFS3
NYSEBRFS
Industry Food processing
Founded 18 August 1934
Headquarters Itajaí, Santa Catarina, Brazil
Area served
Brazil, Argentina, Netherlands, Malaysia, United Arab Emirates, United Kingdom, Thailand and Turkey.
Key people
Pedro de Andrade Farias,(CEO)[1]
Products Meats
Processed food
Margarines
Pastas
Pizzas
Frozen vegetables
Number of employees
over 100 thousand
Subsidiaries OneFoods
Website www.brf-global.com

BRF S.A. is one of the biggest food companies in the world, with over 30 brands in its portfolio, among them Sadia, Perdigão, Qualy, Paty, Dánica and Bocatti. Its products are sold in over 150 countries, in all five continents. More than 100 thousand employees work at the company, which owns more than 50 factories in seven countries: Argentina, Brazil, United Arab Emirates, Netherlands, Malaysia, United Kingdom, Thailand and Turkey.

In 2016, the company sold over 4 million tons of food and made more than 600 thousand monthly deliveries. In all over the world, the company has over 240 thousand clients and feeds thousands of families. Over 13 thousand integrated producers work daily on the field to supply fundamental ingredients of the food produced by the company: poultry and domestic pig].

It is worth mentioning that BRF is the result of the merger between Sadia and Perdigão, two of the main food companies in Brazil. The operation was announced in 2009 and concluded in 13 July@th 2013 after being approved by Economical Defense Administrative Council – Conselho Administrativo de Defesa Econômica (CADE). As the process was concluded, both Sadia and Perdigão stopped functioning as companies and became brands of BRF's portfolio.

History[edit]

The negotiation for the acquisition of Sadia by Perdigão started in 2008, with then-president José Antonio do Prado Fay[2]. The successful merger, officially announced in May 2009, created BRF, which continued under Fay's lead.

In October 2011, BRF made two acquisitions in Argentina, acquiring the companies Avex (a poultry company) and Dánica (a leading company in the production of margarine) for 150 million dollars.[3][4]

One year later, in Abu Dhabi, BRF acquires 49% of the food distribution company Federal Foods, for 36 million dollars.

Still in 2012, once the merger process between Perdigão and Sadia was concluded, the company which was then called BRF Brasil Foods became one of the biggest food companies in the world.

In the following year, with the goal of consolidating as a global brand, the company changed its name to BRF S.A. Since then, the company has presented itself to the market as BRF. The company logo also kept up with the changes and was redesigned after two years of research among strategic audiences, that being accomplished with the help of consulting agencies Interbrand and A10.

In April 2013, the entrepreneur Abilio Diniz is elected the new president of BRF's[5] Administrative Council and boosts the plan for internal changes. After four months, Claudio Galeazzi occupies José Antonio do Prado Fay's position, becoming the company's CEO. Galeazzi repeats with Abilio Diniz a partnership that lasted years, similar to other companies where Diniz was in charge (like Grupo Pão de Açúcar, for instance).

In May 2013, Sadia announces that is an official supporter of the Olympic Games and Paralympic Rio 2016 Games. From June 2013 to January 2016, the brand was also a sponsor for Brazil's National Soccer Team. The contract included the main team and all other categories. The numbers of the deal were not published.

In April 2014, another slice of Federal Foods is acquired by close to 27.8 million Dollars[6]; in August of that same year, BRF incorporates Alyasra Food Company, a frozen food distributor from Kuwait, for 160 million dollars. With those acquisitions, the company expands its operations in the Middle East and follows through with its plan to become more and more international[7].

In September 2014, BRF sells its dairy assets to the French group Lactalis for 1.8 billion reais. Among the sold assets are brands such as Batavo, Cotochés and Elegê. According to BRF, the decision of selling the dairy division was a consequence of the low return the company was getting from it[8]. In that same month, Claudio Galeazzi announces he is leaving the group's presidency and the executive Pedro Faria takes his place, effective January 2015[9].

In 2015, BRF became the first Brazilian company to invest in offering Green Bonds, which are debt securities that come with a guarantee that all resources collected will be invested in environmentally responsible projects[10]. In that year, 50.2% of BRF's income came from the international market (export).

Following through with the strategic plan of turning the company global, during that same year, in Asia, SATS BRF was created in Singapore; in China, BRF launches a line of snacks with the Sadia brand; in Middle East, partially acquires Qatar National Import and Export (QNIE); in Argentina, acquired iconic brands such as Vieníssima (sausages), Goodmark (hamburgers), Manty and Delícia (margarine) through the Avex and QuickFood subsidiaries.

Back to Brazil, still in 2015, Perdigão goes back to acting in strategic categories (ham, smoked sausage, among others) after being away from the market for three years, as agreed with the Economical Defense Administrative Council – Conselho Administrativo de Defesa Econômica (CADE) during the Sadia and Perdigão merger.

In the year of 2016, the Sadia Halal subsidiary is created, which will manage the assets related to producing, distributing and selling food to the Muslim markets. A deal is made with FFM Berhad as well, insuring the cooperation between the two companies in the FFM Further Processing SDN BHD (“FFP”), a food processing company based out of Malaysia. Also in 2016, BRF seals an investing deal with COFCO Meat, a Chinese food producer focused on swine, with vertically integrated operations, operating in all chains of that industry segment.

In the beginning of 2017, BRF begins the operations of subsidiary OneFoods, focused on the halal market. Headquartered in Dubai, in the United Arab Emirates, the company came into the market already as the biggest halal animal protein company in the world. It arrives in Turkey, the largest consumer of halal chicken on the planet, to take over the operations of Banvit, the biggest poultry producer and market leader in the country. 

Organizational Structure[edit]

The management model used by BRF in its global approach adapts processes and products to the different profiles and consumer habits, respecting the local cultural traditions where it is present. BRF divides itself in the following management groups:

Management Council: Consists of nine members, among which six are independent. The qualifications required to be a part of the Management Council include items such as spotless reputation, not working for any competitors or having any conflict of interests.

Committees: since 2006 Management Council support committees are maintained, consisting of members of the council itself.

Fiscal Council: Consists of three members, among them a specialist in finance. They meet monthly and, when needed, participate in the Management Council meetings.

Executive Leadership: consists of four members, who are responsible for the business management as a whole while following the strategic guidelines defined by the executives and approved by the Management Council. These members are divided in 4 vice-presidencies.

In Brazil, the company owns more than 30 factories and 20 Distribution centers. Abroad, operates nine industrial units in Argentina, one in the United Kingdom, one in Netherlands, five in Thailand, one in Malaysia, one in the United Arab Emirates and five in Turkey, apart from 27 distribution centers.

Investors[edit]

An open capital company created in 1980, BRF is a part of the New Stock Exchange – Novo Mercado of BM&FBovespa (BRFS3) since 2006 and is also listed in the New York Stock Exchange (NYSE:BRFS – ADRs level III).

The company is featured in the main sustainability indexes in the world, consolidating the connection between social-environmental practices, market reputation and business performance. Since 2005, it has been a part of the Company Sustainability Index – Índice de Sustentabilidade Empresarial (ISE) from BM&FBovespa, the only Brazilian company in the food market segment.

In the same year, it starts filling the forms of the CDP Climate Change and being placed, in the 2015 edition, among the 10 companies in the CDP Brazil Carbon Disclosure Leadership Index, an index that features the companies listed in the New York Stock Exchange that are considered role models when it comes to transparency and practices for reducing the emission of Greenhouse gases.

Still in 2015, it was one of the ten companies from the country that were chosen to be a part of the Euronext-Vigeo EM 70, a European stock exchange index that includes companies from developing countries that have high performances in corporate governance.[11]

Since 2009, the company is also a part of the ICO2 Index from BM&Fbovespa. And, since 2013, it has been a part of the Global Impact 100 Index, a stock index that lists companies that represent the UN Global Compact, being considered the most sustainable in the world.

BRF is also the only company in its market segment featured in the Dow Jones Sustainability Index – Emerging Markets (DJSI), since 2012. 

Brands[edit]

BRF has invested over R$2.5 billion in building and acquiring Brands and factory units until December 2016. With over 30 brands around the world, the company is present in key categories, such as frozen Meals, frozen poultry and swine cuts, Pizzas, cold cuts and breaded Meals.

Some of the brands that make the company's portfolio are: Sadia, Perdigão, Perdix, Qualy, Paty, Danica, Bocatti, Speedy Pollo, Vienissima, among others.

In Brazil, the investment in research and innovation is also a highlight. There were 25 new products just in 2016, specially the Salamitos line of snacks, the Jamie Oliver line, new frozen meal lines from Sadia and Perdigão, as well as Qualy QMix and Multigrãos.

Sustainability Vision[edit]

Our social-economical commitments became official back in 2009 – the date of the merger between Sadia and Perdigão and the creation of BRF – and, through the sustainability guidelines, were structured in 2011. Gradually, issues such as the development of the chain of value, human capital, valuing natural capital and responsible consumption were incorporated in our planning.

Since then, the legacy[disambiguation needed] that we intend to structure, coming from a broad sustainable vision, includes the positive transformation of BRF's global network, based in premises such as ethics and responsibility[disambiguation needed]; the improvement of people's quality of life; and the respect and value[disambiguation needed] of all the links in the food production chain.

Our indicators and social-environmental goals are developed by several company departments and monitored continuously by the Sustainability Department. Through the Finance, Governance and Sustainability Committee – related to the BRF Management Council – the subject is a part of the corporate strategies. Therefore, aspects such as environmental conformity for industry operations, the development of integrated suppliers and producers, the respect and value of our people and the voluntary commitment to animal welfare have increasingly become a part of BRF's business and purpose.

Voluntary commitments

Sustainable Development Goals (ODS): launched in 2015, it suggests an approach using several segments to promote, among other topics, an end to poverty, hunger and to promote respect to human rights. These objectives are being incorporated into the company's strategy, including in the creation process of Food Vision (a guidance for the future that motivates us to produce food with more love, respect to nature and an awareness of our social role in feeding the world) and in one of our most legitimate causes, avoiding the waste of food.

'Global Compact': we have signed of the list of commitments since 2011 and, since 2013, we are a part of the Global Compact 100 Stock Index, that recognizes companies that are committed with the incorporation of those principles to their business model.

Corporate pact for integrity and against corruption: a commitment towards business ethics, in line with our values and the values of other organizations that signed it.

'Institute national pact to the end of slave labor (INPACTO)': we contribute to stop slave labor in chains of production.

'Na Mão Certa Program': supports the fight against sexual exploitation of children and teenagers in Brazilian highways.

GHG Protocol Brazilian Program: we have adopted the method that calculates the GHG using the Public Emission Registry to publish its global inventory of greenhouse gases emission.

'CDP Climate Change': an incentive to the responsible management of carbon emissions and aspects related to climate changes, strategies, risks and opportunities.

'CDP Water': approaches the management of water resources used in organizations and its chains of production, the implications for the current and future business, as well as identifying risks and opportunities.

Pact For Sport: a voluntary initiative, unlike any other around the world, that defines rules and mechanics for the relationship between investors and sport institutions.

Business Changes[edit]

The merger between Sadia and Perdigão, approved by CADE (Economical Defense Administrative Council) in 13 July@th 2013, established a new market dynamic, given that BRF would have to let go of some physical assets and consumer brands, among them Rezende, Wilson, Escolha Saudável, Light & Elegant, Doriana, Delicata, Freski, Confiança, Tekitos, Texas, Patitas and Fiesta.

According to CADE, those assets and brands should be sold in a single package and to a single operator. During that same year, BRF started dealing with players from the market to follow CADE's order. Months later, the Marfrig Group took over the assets pointed out by CADE. Later, the Marfrig Group sold those same assets to JBS.

Apart from selling assets and brands, BRF had also to suspend temporarily the sales of several items from Perdigão's portfolio, among them pizzas, frozen meals and cold cuts. Starting in 2015, the brand went back to selling Ham and Smoked Sausage. And in 2016, relaunched the brand's salami. Starting July 2017, at the time all CADE restrictions cease, the brand will once again expand its portfolio, following all the directions made by the regulating institution.

References[edit]