SINGAPORE – Brazilian meat packing company, BRF has sold its 49% stake in the SATS BRF Food joint venture in Singapore to SATS Food Services for SGD 17 million (US$12.3 million).
SATS, a ground handler and in-flight catering services provider, said that the unit will be renamed to Country Foods Pte Ltd.
SATS said the acquisition is part of plans to consolidate its position in aviation catering in Asia and become a leading supplier to the foodservice industry in China and India.
The company aims to build a digital integrated supply chain that centralises procurement and distribution to improve food safety, quality and production efficiency.
“By taking 100% ownership of our food distribution joint venture company, we can accelerate end-to-end traceability of raw materials for our customers, and deploy data analytics to achieve greater efficiency and quality, while reducing food waste,” said Alex Hungate, CEO of SATS.
The new entity, Country Foods, has also signed an exclusive distribution and licensing agreement with BRF Global to distribute products and the right to license brands owned by BRF in Singapore.
BRF’s exit in the business is part of the company’s restructuring plan as it aims to consolidate its presence in Brazil, Asia and in Muslim countries. The company had said that it would be selling some of its units in Europe, Thailand and Argentina.
As part of the restructuring the company also hopes to reopen a plant in the Carambeí, Southern Brazil, earlier than planned, as a better operating environment bolstered the company’s prospects and balance sheet.
BRF’s results for the second quarter of saw the company bounce back to profit after three quarterly losses on a combination of higher net revenue driven by an increase in sales volume and higher meat prices across geographies.
BRF has also made production adjustments at seven plants, to further strengthen its reorganization, which started in 2018
BRF reported a R$191 million (US$48.74 million) while its net revenue rose by almost 18% to R$8.33 billion (US$2.03 billion) in the second quarter.
The company has however ruled out any short-term prospect of recovering meat supplies due to severe disruptions caused by the swine flu outbreak, meaning the outlook for protein prices will remain strong during the second half of the year around the world