2023-06-02 10:18:40
LAR, the third largest agro-industrial cooperative in Brazil, has agreed to sell its egg operation to Mantiqueira, the largest farm in the country.
The operation accounted for just 0.7% of LAR’s revenue – which generated net revenue of R$ 23 billion last year – but will increase Mantiqueira’s chicken stock by 10%, in addition to advancing the company’s positioning in the three southern states .
The region already accounts for 15% of the flock and 20% of the eggs sold by Mantiqueira.
The operation of LAR will increase the top line da Mantiqueira by R$ 180 million. Last year, the company controlled by businessman Leandro Pinto had a net income of BRL 1.5 billion in eggs and made another BRL 450 million in its beef, soy and corn operations.
The transaction depends on approval in the summary procedure by CADE, and the closing should happen by July 1st.
The purchase of the LAR operation marks Mantiqueira’s definitive entry into the integrated products business – in which the company supplies chickens and feed, and poultry farming families are remunerated for producing the eggs.
Mantiqueira had already been testing this type of operation since 2021 when it bought Gralha Azul, a small business that was part of a bankrupt estate also in Paraná.
But while Gralha Azul had only 35 producing families and 250,000 chickens, LAR’s operation is much larger: there are 98 families and 1.5 million chickens.
Mantiqueira is buying the entire LAR herd and the so-called Egg Processing Unit (UPO) – a set of assets that includes the building and the egg grading operation.
Buying an integrated operation is “a way to grow with low investment in fixed assets,” said Márcio Utsch, the former CEO of Alpargatas who in February became a partner and CEO of Mantiqueira, where he had been a director since 2019.
“The integration system works well in southern Brazil, and allows us to work on what we are good at: our brand and our egg certification and separation technology.”
With creative investments in marketing, Mantiqueira has managed to widen the spread between the market price of the commodity and its realized price consistently over the last few years.
embrace a business asset light “For us it is an important competitive advantage, especially at this moment with the cost of capital where it is,” said Marcio. “We are not privileging one model over the other, but making a mix between the two models.”
Geraldo Samor
1685874422
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