September 7, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Leading South American beef exporter Minerva Foods announced it has agreed to acquire 16 cattle slaughtering and deboning plants (including 11 in Brazil, three in Uruguay, one in Argentina, and one lamb plant in Chile) from beef rival Marfrig Foods, the parent company of U.S.-based National Beef and Iowa Premium, for BRL 7.5 billion (US$1.5 billion). 

Five months after Marfrig acquired National Beef for US$969 million in 2018, Marfrig undertook a reorganization and named Eduardo Miron as its new CEO. Miron has previously served in the role of chief financial officer for the group. The company’s new structure involved two divisions: South America, including units in Brazil, Uruguay, Argentina, and Chile; and North America, including National Beef, a beef processing plant in Ohio, and Iowa Premium.

Minerva stated that this deal will move the company toward multiple goals. By increasing its capacity by approximately 44 percent from its current processing capacity of 29,540 head per day to 42,439 head per day, it will strengthen its position in the beef market. 

Also, the net revenue from the acquired plants added to the company’s current revenue will lift its total to BRL 50 billion, or US$10 billion, while also generating logistical synergies and providing opportunities to expand and improve its distribution, increase it access to international customers, and reinforce its leadership position in beef exports from South America. 

For Marfrig, which stated that it intends to retail only its largest-scale processing facilities in South America in order to focus on the production of value-added meat products, it redirects its business further down the supply chain and away from commodities, while Minerva shifts in the opposite direction. 

The acquisition of a lamb facility in Chile also adds to Minerva’s Australian holdings, after Minerva and the Saudi Agricultural and Livestock Investment Company (SALIC) acquired the Australian Lamb Company (ALC) last year.

The acquisition of ALC was conducted through Minerva Foods Australia, a joint venture established by the two companies the year prior. At the time, agreements designed to deepen their partnership were signed with the goal of strengthening Saudi Arabia’s food security and Minerva’s market exposure and operations in the Middle East and Asia – two markets that accounted for more than 60 percent of the world’s beef imports in 2020, and which were the destination for 55 percent of Minerva’s beef exports for the first three quarters that same year. 

In total now, Minerva now has 40 cattle slaughter and deboning plants: 21 in Brazil, five in Paraguay, six in Argentina, six in Uruguay, and two in Colombia. It also controls five lamb plants, four in Australia, and one in Chile. 

Domestically, this deal will now make Minerva the second largest producer of beef in the diversified and very competitive South American region. 

Minerva explained that it also translates to varied benefits and opportunities through and beyond itself. It creates value for other markets through producers with whom Minerva has pursued partnerships through various initiatives whether they be commercial, or in the form of technical and financial support, incentives for sustainable action, or a commitment to good production practices.

It also will give Minerva’s customers more premium and high-value-added products thanks to the increase in production capacity; and to its employees, who will have more professional windows open to them thanks to the company’s growth and greater number of production units. 

For shareholders, this expansion offers the creation of value in the medium and long term, and for society it strengthens South America’s competitiveness in global beef markets.

“We are very excited about this move, which is in line with our geographical diversification strategy, and which uniquely complements our operation in South America, which is one of the most competitive markets in the world,” commented Fernando Queiroz, CEO, Minerva Foods. “This will take our company to another level, give us access to new international clients, maximize commercial opportunities and operational synergies, reduce risks, and expand our ability to compete in the international animal protein market.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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