Brazil is the world's biggest exporter of chicken. One of the country's most dynamic and ambitious poultry producers, the Pluma Group aims to increase production of its Frango Bello brand by 40 percent this year to meet growing international demand. Reuben Ford catches the latest from Company President Laurí Paludo.
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As global consumption of chicken rises, producers are satisfying the demands of hungry consumers. Brazilian chicken is the most exported in the world, landing on the tables of millions of diners and supermarket shelves in most countries.
Frango Bello, produced by the Pluma Group. Mother of 7 companies based in, the south of Brazil, focuses on the international market with over 60 percent of production destined for overseas.
Also producing fertilized eggs, chicks, chickens and chicken feed, the vertically integrated group plans considerable growth in the future; particularly in exports. “Frango Bello currently process 100,000 birds a day. By the end of 2014, this will rise to 140,000 and in 2015/2016 we plan Frango Bello alone will process 300,000 chickens daily,” says Laurí Paludo, President of the Pluma Group.
The group encompasses hatcheries, farms, chicken feed factories and processing centers, manufacturing the brands Frango Bello, Frango Ouro and Mais Frango for the domestic market and 50 countries worldwide.
Which came first the chicken or the egg? In terms of providing products to the market, the answer for the Pluma Group is the egg. Founded in Dois Vizinhos in the south west of Paraná state in 1999, Pluma Agroavícola specializes in fertilized chicken eggs.
In 2006 the company entered the chicken market, purchasing its first factory in the region of Itaquiraí in neighboring state Mato Grosso do Sul and producing whole chickens and cuts under the Frango Bello brand. The slaughterhouse handled 5,000 birds a day. “From the outset our goal was to invest in the infrastructure of the factory and in new technology to constantly strive for better results across the board,” Paludo says.
Substantial changes were clearly successful. Today, Frango Bello processes 100,000 chickens a day – 20 times its original productivity in just eight years.
Following strong investment strategies, the group opened its own distribution center in 2008 in Campo Grande, Capital of Mato Grosso do Sul state and purchased another factory in Aparecida do Taboado, based in the northeast of the state. The branch produces Frango Ouro. an affiliated brand. Production began at 40,000 chickens daily and has already reached 50,000.
While Frango Bello is an international brand, Frango Ouro is sold internally to Brazil’s retail sector.
“We have invested over $30 million in infrastructure,” Paludo confirms. State-of-the-art technology from the United States, Europe and Japan was imported to the Frango Bello and Frango Ouro factories. New technology includes one freezing tunnel and one cold storage totaling an investment of $27 million and doubling production capacity.
The group also invested in 120 of its own chicken houses as well as increasing the number of integrated producers. At present, 60 percent of chickens are supplied by the group and 40 percent from integrated partners.
In 2011, Frango Bello launched an on-site chicken feed factory. “Mato Grosso do Sul produces high volumes of soy and corn – the main ingredients for our feed. Inaugurating our own factory benefits from local production, improves the quality of our feed and vertical integration,” Paludo explains. Frango Bello now has two chicken feed factories in the state.
“Our aim is not to be the biggest producer in the market – it is to provide the best quality,” Paludo affirms. Each factory houses a laboratory for testing all raw materials and conditions. The chicken houses operate in controlled climates, feed is monitored, and all 1,610 staff (1,200 at Frango Bello and 410 at Frango Ouro) are highly qualified and trained. The group has its own fleet of vehicles for safe and secure logistic purposes.
Vertical integration of processes allows total control during all stages of production from egg to frozen filet.
Strict regulations imposed by international markets demand constant attention to detail and sanitation. Over 60 percent of Frango Bello chicken is exported and according to Paludo, this is set to rise in the future. “We are one of the Brazilian producers licensed by almost all individual export regulation authorities worldwide. We export to the Middle East, Saudi Arabia, China, and Japan, (among others) and next year aim to focus on the European markets.”
Production at Frango Bello follows the HACCP (Hazard Analysis and Critical Control Points) systematic preventive approach to food safety from biological, chemical, and physical hazards.
“Our differential is quality. Frango Bello is a high quality brand, ranging from whole chickens to individual cuts,” Paludo asserts.
Frango Bello’s leading product for export is Chicken Shawarma – boneless whole chicken (leg and breast) The two plants produce almost the same products. However Frango Bello’s plant produces a range of products for export such as breast filets, shawarma, boneless legs, feet, gizzards, livers and hearts. Frango Ouro’s plant’s products are more for the domestic market and consist of a range of chicken breasts, legs, leg quarters, sausages as well as gizzards for export.
Driven by high quality, the group is constantly investing in adding value to its products. “Our research and development team are constantly working on improving existing lines and the possibility of new products,” Paludo says.
Revenue currently reaches around $13 million a month and the company projects total annual figures in excess of $175 million for 2014. Exports are increasing, especially with the prospect of developing the European markets this year. “We are investing heavily in our brands in Dubai and China,” Paludo adds. Investments in infrastructure and integration are also paying off and annual growth is averaging 10 percent.
Growth comes despite concern that fiscal and labor regulations in Brazil are hindering industry growth. Paludo explains that the infamous ‘Custo Brasil’ (Cost of Brazil) generated by high taxes and lack of solid infrastructure poses “a serious threat to exports” and must be carefully considered and included in strategic planning yearly.
Ambitious growth predictions are backed up by past performances and according to Paludo, Frango Bello will have increased its initial production by 60 times to 300,000 chickens-a-day by 2016.
The Pluma Group and its brands are on a mission “so far” accomplished. Overcoming economic challenges and becoming an important player on an international scale, Frango Bello will continue winging its way to more countries than ever before, while investments in domestic brands and company infrastructure are sustained.
“We are committed to perfecting our products and services and are on target to grow and meet international demand,” Paludo concludes.