SAO PAULO (Reuters) - BRF SA, the world’s largest chicken exporter, said on Tuesday it would consider acquisitions in Turkey as part of a strategy to increase production there and remain a leading food supplier in the halal world.
Patricio Rohner, vice president of international operations, told a news conference that the company now accounts for about 12% of production in Turkey and aims to grow that to 20%.
He did not provide a timeline for the plans, which were disclosed after a series of presentations conducted by company executives to discuss BRF’s prospects with analysts and investors in São Paulo.
BRF reaffirmed a commitment to invest around $120 million to build a chicken-processing plant in Saudi Arabia, though management said studies are still under way.
Rohner told journalists that BRF could sell its chicken plant in Malaysia, which is considered small and not part of the company’s long-term strategy. While he did not provide details, Rohner said “a pair” of potential bidders have expressed an interest in acquiring the asset.
Chief Executive Lorival Luz said that acquisitions or greenfield expansion would be done respecting a rigid “financial discipline,” as the company remains committed to completing an organizational turnaround.
BRF is still recovering from a food security probe that accused Brazilian meat-packers of colluding with health officials to evade quality checks in 2017. The company, which reshuffled management after the scandal, is cooperating with the probe but has yet to regain permission to export to the European Union.
Last year, the EU banned 20 Brazilian meat units, mainly poultry, in connection with the probe. Twelve of those plants are operated by BRF.
But an outbreak of African swine fever that forced China to look to Brazil for additional meat supplies has been a boon to the company.
As exports pick up and the internal market recovers, BRF is using cash from operations to cut debt. The company recorded a second consecutive quarterly profit in the third quarter.
BRF’s recently named chief financial officer, Carlos Moura, said the company will pre-pay 1.5 billion reais ($360 million) of bank debt in the fourth quarter, in addition to 600 million reais due in the final three months of 2019. The plans are part of efforts to lengthen debt maturities and reduce the cost of loans in all currencies, he said.
Reporting by Ana Mano; Editing by Chizu Nomiyama and Leslie Adler