From its modest beginnings, Agrodanieli’s mantra has been diversification. Having dominated the entire production cycle, the Brazilian producer of grains and poultry is now fine-tuning operations so it can venture further beyond its regional borders. Michael Sommers reports.
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Agrodanieli is one of those family businesses whose origins date back long before its actual establishment. Although the company officially came into being in 1997, its two founding brothers, Adelirio and Claudiomiro Danieli, had been successfully buying and selling grains and cereals since 1984. However, according to current president Adelirio, the actual seeds for this thriving grains and poultry producer were planted 40 years ago, on a tiny 26-hectare plot farm in the rural community of São Silvestre, near the town of Tapejara, Rio Grande do Sul.
“In 1975, my father died at the age of 48,” recalls Adelirio. “I was only 19 at the time, the oldest of seven brothers and sisters. To make ends meet, it was decided that we needed to diversify our production. We already grew corn, wheat, and soybeans and raised pork. In 1976, we added dairy cattle and vegetables. And then in 1978 we began to raise chickens, which we sold to local producers.”
At the time, such diversification in the segment was a pioneering concept in Brazil. Not only did the strategy pay off financially for the Danieli family, but in 1980 it also earned Adelirio a productivity award from INCRA, the federal authority in charge of Brazil’s agrarian reform. “Because of this award, I became very well-known in the region,” confesses Adelirio. “It resulted in a lot of opportunities to enter into new business endeavors with third parties.”
Such endeavors allowed Danieli to move beyond mere production and expand into the commercial realm. In 1984, Adelirio and partners invested in warehouses for the storing and shipping of grains. The following year they began buying and selling them as well.
The largest transformation began on a very small scale – with the creation of an artisanal abattoir for poultry in the basement of the family home. “Every morning we’d butcher around 30 to 40 chickens. Then in the afternoon we’d deliver them personally to consumers or to the local market. As demand increased we were always renovating our home,” he recalls with a laugh.
It was obviously time to expand beyond the family domain. In 1994, Adelirio constructed an industrialized slaughterhouse with several production lines. Three years later, he and Claudiomiro created Agrodanieli with the goal of creating an agribusiness that was not only completely diversified, but vertically integrated as well.
Today Agrodanieli’s activities embrace such a wide range of the production cycle that the company can proudly claim to “transform grains into premium meats.” To wit, the company not only grows, harvests, stores, and commercializes grains and cereals. It also makes use of them to produce feed that nourishes the hens whose eggs are incubated, hatched, and raised as chickens, which the group subsequently butchers, processes, and packages to be sold throughout Brazil and the world.
“All in all, our group is involved in seven major agro-industries,” says Adelirio. “Because our operations span the entire production cycle, we’re probably one of the most vertically integrated companies in the marketplace. There are many advantages to this, including safety in terms of production standards, consistent high quality, reduced costs, and efficient logistics due to the fact all of our operations are concentrated in the same locale.”
Constant diversification has nourished continued expansion. In 2005, Daniele invested in a new industrial park in São Domingos, also located within the municipal region of Tapejara. More recently, it completed construction of a state-of-the-art poultry processing plant in the municipality of Trindade do Sul, with a capacity for 300,000 birds a day.
Today, Agrodanieli has 750 hectares of farmland, a grain warehouse capable of storing up to 140,000 tons, and three modern poultry slaughtering and refrigeration plants equipped to process 500 chickens per day. A feed plant (part of whose production nourishes the group’s own hens and chickens) has a production capacity of 70 tons per hour, and a plant that can crush up to 600 tons of soybeans a day to produce soybean oil and meal. The group even opened its own supermarket in Tapejara. The largest supermarket in the city, Super Danieli sells all three of the group’s brands of frozen packaged chicken: its signature label, Danieli Alimentos.
Chicken accounts for Agrodanieli’s primary source of revenue. Available in various cuts, it is commercialized throughout Brazil and overseas as is soybean oil, 10 percent of which is consumed in house. Meanwhile, buyers of soybean meal are limited to Rio Grande do Sul; 40 percent of production is used for the company’s own needs.
Additionally, Agroadaniele operates a “bi-product” plant in which chicken feathers, organs, and blood are processed into meals used in the manufacture of pet food. Equally eco-friendly is another plant in which residual materials from its hatcheries and poultry processing operations are recycled and transformed into organic fertilizers. Adelirio stresses that the group’s social commitment is as important as its sustainable focus; as part of the concern with the well-being of its 2,000 collaborators, the company aided in the construction of residences for employees and their families.
Although Agrodanieli maintains solid local roots, it is simultaneously eager to expand both nationally and internationally. Currently, 50 percent of sales take place in Rio Grande do Sul compared to 38 percent throughout the rest of Brazil and 12 percent to international markets. Moreover, some 70 percent of revenues are derived from business carried out within the state.
“It’s our goal to increase exports, both nationally and globally, so that the sales outside of the state account for 50 percent of our business,” confesses Adelirio. “With this in mind, we’re working to increase foreign exports. Brazil’s reputation for secure, high-quality poultry products coupled with the current level of the Brazilian real vis-à-vis the U.S. dollar makes this an opportune moment to do so.
Due to its non-stop diversification, over the last decade, Agrodanieli has seen business grow yearly by an impressive average of 25 percent. As it looks to the future, however, the group is changing its focus. Having consolidated growth, emphasis is now upon improving operations.
“Over the next two to three years, our goal is to restructure the group, to make changes that will increase stability and improve operating processes,” says Adelirio. He sees this approach as essential viewed the current political and economic stability confronting Brazil, which has created challenging conditions for investments.
Ultimately, this renewed stress upon stability is in keeping with the family-owned company that, despite all its branching out, has always valued, and remained close to, its roots. “The Agrodanieli name is associated with a trusted company that has made great social contributions to the region,” says Adelirio. “We have a beautiful life story of growth that has taken place over years. But what really defines us is our simplicity and proximity to the soil, of being, quite literally, down to earth.”