One of Brazil's most dynamic poultry producers breaks boundaries when it comes to growth and investment. Reuben Ford finds out more about accepting and beating the challenge of the competitive chicken industry.
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Leaving more traditional chicken farms scratching their heads, Avenorte Avícola Cianorte Ltda has adopted an aggressive growth strategy. The entrepreneurial attitude has increased production from 2,000 to 200,000 birds a day and achieved the largest market share in the southern Brazilian state of Paraná.
The company manufactures under the brand Guibon Chicken – producing a variety of frozen whole chicken, cuts, processed meat and giblets adapted to a variety of markets and consumer tastes worldwide.
“The market presents the same conditions to every company. We have been building relationships for 15 years and really go after what our clients want – quickly, efficiently and with the highest quality. That is how it has to be done,” affirms Rodrigo Guimarães, Director of the Guibon brand.
Avenorte Avícola Cianorte Ltda was founded in 1997 by four entrepreneurs in Cianorte, Paraná. The four men (one being the father of existing Company Director, Rodrigo Guimarães) put together $350,000 to inaugurate a chicken abattoir. One year later, the facility began activities, employing 60 people and processing 2,000 birds a day.
“Production increased steadily, already reaching 10,000 a day at the end of 1998. Thanks to expansion and ambition this number had grown to 40,000 a day by 2002,” Guimarães says.
In 2007, Avenorte invested in expanding its infrastructure, building a modern feed mill with the latest technology and processing software. The facility offered increased support – the best feed – to the company’s partners, integrating them and inspiring a considerable boost in production. The facility began operating in two shifts, each processing between 50,000 and 60,000 chickens; bringing total daily capacity to 120,000 birds.
“The economic crisis, which struck the markets in 2008, caused an adaptation in planning,” admits Guimarães. “But we were always focused on remaining at the vanguard of the market and achieving constant growth.”
Plans for a new facility began in 2008, but were interrupted by this economic climate. Avenorte held investments in the plant to generate capital for the venture without hindering growth. The inauguration, in 2011, increased output to 150,000 birds in two processing shifts. “The new premises house the latest in technology and equipment were a platform for the growth for the whole company,” Guimarães emphasizes.
Thanks to increased revenue from the plant, Avenorte built up capital to sail through the next crisis to hit the industry in 2012. Unlike others in the food industry who were tightening their belts, the company stepped up investment.
Today, the Guibon brand produces 205,000 chickens a day – an achievement that Guimarães attributes to “development that shows the result of determination, commitment and ability to push the boundaries and challenges in all these years of history.”
Technology and Integration
Investment in state-of-the-art technology, such as cutting machines, fileting equipment and production lines have streamlined and consistently modernized Avenorte. As well as embodying great design, the plant is equipped to cater for 100 percent of the company’s capacity.
The brand has grown with the region and the Brazilian chicken industry, becoming increasingly associated with stability and quality products and establishing its own logistics branch, Guibon Transport and Logistics Ltd.
“We have control over the quality of our products from farm to factory and treatment to table,” Guimarães says. All of the birds reared, processed and delivered belong to the Guibon brand and among the 1,800 staff are in-house technicians and experts, who oversee that quality standards are maintained.
A second processing center located at the company’s 5,000-square-meter industrial complex handles sub products, so that none of the chicken is wasted and production remains vertically integrated.
Guibon produces general chicken cuts, including breast, wings, feet, fileted pieces, hearts, gizzards, giblets and liver as well as whole chickens. All products are frozen using the latest technology and the company presently produces 45 tons of frozen chicken an hour.
“Products, like investments, are driven by our clients. We developed a feed mill and transport fleet to meet demand,” Guimarães clarifies. Guibon manufactures 100 percent of the feed needed for its chickens and 100 percent of its ingredients. The logistics company currently delivers 30 percent of production. Guimarães is very clear about investment strategy: “We match our characteristics with the market and have a transparent down-to-earth way of doing business.”
Guibon is sold to suppliers, distributors, hypermarkets and retail chains throughout Brazil and exported mainly to Hong Kong (70 percent), Dubai, the Middle East and China.
With a target of 450,000 birds processed a day within the next five years, Guibon shows no sign of slowing down its constant strive for success. Guimarães explains annual growth figures that reveal a startlingly healthy upward trend. Annual revenue has increased from $120 million in 2011, to $150 million in 2012, $215 million in 2013 and in excess of $250 million predicted for 2014.
In the face of stiff competition from domestic and international (Chinese) producers, the results are more impressive still. Variations in the cost of agricultural inputs, fluctuating corn and soy prices and agricultural crises have all threatened development.
Valuing relationships and commitments highly and dealing with clients and collaborators personally are clearly an important factor in this super-survival. The secret is a mix of determination, drive and dedication, as Guimarães concludes: “Perseverance is part of our history.”