Brazil and raw material: the number of units slaughtered grows, but according to BRF, 2018 was “the worst year of the decade”

Protectionism, high costs, and strikes of the transportation industry have made 2018 the most difficult year to handle in the last decade, according to BRF. Confirming this line of thinking are the top-managers of the Brazilian business operating in the meat-industry, which has recently published its balance sheet showing an EBITDA 8.4% lower on yearly base, and a consequent net loss for the period worth just over 1 billion Euro. BRF tried to control the loss in 2018 by putting in place a plan that saw the shut-down of some plants, the reduction of stock of raw material that was kept frozen, and the securitization of receivables. While the enactment of the plan allowed the company to retrieve 950 million euro, this strategy brought to the company less cash than expected. According to, Pedro Parente, GM of the company, admitted that “2018’s results were disappointing”, but that at the same time, “they are no reflection of the growing number of opportunities the business sees, that can create value for the stockholders and the business itself”. 2018, continues to explain Mr. Parente, was a transition year, “which began the crucial and significant process that will allow the business to recuperate and complete the restructuring process”. At the same time, the amount of meat put into the market by some producers located in the Mato Grosso has increased. Data from the country’s agriculture department (IMEA) certified that in the last 12 months, in the Southern regions, the average number of units slaughtered was up by 650 per day, while in the Northern and North-Eastern areas the increment was of between 100 and 440 units per day. As a whole, in the Southern region of the country, just over 7,000 units were slaughtered each day, 3,700 in the North, and 2,200 in the North-East. According to IMEA, this testifies to the fact that the demand for red meat is growing, and that the forecast regarding the price of raw material states that it should remain high.


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