São Paulo, Brazil-headquartered BRF SA, the world’s largest exporter of poultry products, intends to raise about $1.5 billion from the sale of 20% of a newly structured subsidiary in Dubai that will target the halal processed food market in the Middle East and beyond, according to a Reuters report. The capital will be generated through an initial public offering of shares in late March or early April.
On January 4 BRF filed a securities statement with the SEC in which its Sadia Halal unit was renamed OneFoods Holdings Ltd. The new entity aims to focus on further developing business in the halal meat sector, which expected to be worth more than $58 billion by 2020.
According to an unnamed source quoted in the Reuters dispatch, BRF estimates OneFoods has an enterprise value close to $6.5 billion, including market capitalization, debt, minority interest and cash.
“By creating a local company to consolidate our operations in Islamic markets, we moved further up the production chain to get closer to an estimated 1.8 billion consumers, which should support the accelerated growth of OneFoods,” said Pedro Faria, BRF’s Global CEO.
OneFoods has a market share of approximately 45% in chicken products in Saudi Arabia, the United Arab Emirates, Kuwait, Qatar and Oman, where it handles distribution and offers a broad product portfolio sold under leading brands, including Sadia.
“If you ask which is the number one halal food brand in the Middle East, the answer is Sadia,” said Faria. “This is a fantastic asset that shows how close we are to consumers and just how confident they are in the quality and origin of our products. We’re talking about a relationship of over 40 years, given that the first container of Sadia products arrived in the region in the 1970s.”
With a registered office in Dubai, OneFoods has around 15,000 employees and a fully integrated production chain. Products are supplied by 10 factories – eight in Brazil, one in the United Arab Emirates and one in Malaysia – all of which are halal-certified.
“The subsidiary’s operations are fully integrated, which gives OneFoods a unique position in terms of production costs compared to its competitors,” said Faria.
Patricio Rohner, BRF general manager in the Middle East and North Africa, will be the leader of OneFoods. The executive has been living in the region for over 15 years, where he has acquired extensive knowledge of local dynamics, consumer habits and commercial practices.
“OneFoods already operates in more than 40 countries in the Middle East, North Africa, Europe and Asia. Its goal is to accelerate the transition process and forge closer relationships with consumers in all its markets, by replicating the leadership it has attained in the Middle East through its brands, distribution, integrated chain, low costs and high-quality and innovative products,” said Rohner.
BRF became the seventh largest food company in the world following the merger of Sadia and Perdigao in 2009. With current market capitalization of approximately $12.3 billion, the producer of frozen and refrigerated poultry and other value-added products employs more than 110,000 people around the world.
