Brasil Foods initiates Chinese joint venture

16-02-2012 | |

Brasil Foods have signed a joint venture agreement with Hong Kong-listed food and vehicles distributor Dah Chong Hong Holdings Ltd to expand distribution of chilled poultry, pork and beef products in China.

“Everybody wants to get into the Chinese market but the point is how to do that,” said Brasil Foods Chief Executive Jose Antonio do Prado Fay. “In China, the best way is through a joint venture. We need local support for this kind of operation, and we think it is much smarter to find the right partner.”

“China is growing in technology and is growing in business that needs labour in the cities, that means food has become very important to China,” Fay said, adding that China would eventually become the company’s largest revenue contributor.

China now contributes about 10% of Brasil Foods revenue, while the Middle East represents 32%.
Dah Chong Hong Chief Executive Donald Yip said the new venture aimed to sell more than 140,000 metric tonnes of food in the first year and 300,000 metric tonnes in five years.

The 50:50 joint venture between BRF and DCH covers both in natura and processed products, and the joint venture will focus on overall capability building and the relevant business operation in local market, including sales, importation, procurement of products, customer clearance and trade marketing. The joint venture’s leadership will be shared, with the same number of representatives from both companies on its Board of Directors and Executive Committee.

Brasil Foods, which accounts for 20% of global poultry trade, generated about $13.5 billion in net sales in 2010, 40% from exports.

Source: Reuters

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