Pif Paf is completing its 40-year anniversary in 2008 as the largest food company in Minas Gerais state, Brazil. It is also among the 10 most expressive in the country. Gisele Ribeiro reports on the “coolest” aspects of this company known for bringing to the market cooled and frozen products.
For the past seven years, Pif Paf has been awarded many prizes as best company in categories such as perishables, aviculture and agro-industry, financial and personnel management, among others. The company maintains six industrial plants, with five in Minas Gerais and one in Rio de Janeiro with a total production capacity of 160,000 tons.
The industrial and slaughter unit, semi-prepared and prepared food and swine derivatives are located respectively in three main facilities in Minas Gerais: Visconde do Rio Branco, Vicosa and Patrocinio. Visconde do Rio Branco, along with another unit, Areal, are responsible for a little over half of the total poultry production. Every month at least 12 tons of products are processed at PifPaf, including 6.5 tons of poultry cuts and more than five tons of pork and industrialized items, including pasta and vegetables.
Headquartered in Belo Horizonte, capital of Minas Gerais State, PifPaf also has plants that self-sustain its demand for animal feeding, egg production and incubators.
The company was founded in Rio de Janeiro by Avelino Costa, who had already achieved a highlighted position in the pork and meat segment in the beginning of the 1960s. In 1972, the Brazilian government announced a change in policies regarding zoning in the segment. “My father moved the company to Minas Gerais because everything to support the business could be found there. He was really scared that PifPaf could be forced to close its doors if it remained in Rio,” explains Luiz Carlos Mendes Costa, vice president and the founder’s son. “In the end, the government didn’t make changes that would have impacted us but the move had a fabulous impact on PifPaf. Our growth wouldn’t have been as great if we had stayed in Rio.”
Minas Gerais has a long tradition in research. It was already supplier to Rio in the early 1970s. One of its regions, called Viçosa, contains one of the most important universities in the country, known for its research in agronomy and agro-industrial cooperatives. Visconde de Rio Branco, the first unit to be built, is only 50Km from Viçosa University, with which it has a strong partnership. “My father always had a brilliant business sense and he could find a way to pay fair prices, navigating from highs to lows. He was very fast and aggressive in the business, traveling all over to see what was really going on. For this reason, when things didn’t go that well, our company was able to deal with loyal customers,” adds Costa.
The company also found success in exports as the first in the poultry segment to set an exporting contract abroad in 1975, mediated by Petrobrás. “The deal ended up not happening because of the war in Lebanon and our products found another destination,” remembers Costa.
By the 1980s, 90 percent of the company’s production went to international markets. Technical support and state-of-the art raw material inspection and development made possible an integrated production. PifPaf was one of the pioneers to utilize this kind of manufacturing process in the segment. Today, the company exports to Japan, China, Malaysia, Russia, Argentina, Angola, Arabian Emirates and many others.
“If there is one thing that Fernado Collor de Mello’s government did right it was encouraging importing machinery. In the 1990s, we had a significant improvement in productivity because of it. Modern equipment helped us to introduce other options of poultry cuts, hamburgers and sausages, among others. The machines substitute exactly what people at home would have to do on their own, taki g much more of their time,” says Costa.
In 1985, Luiz Carlos Mendes Costa started a wave of healthy changes for the company as its new vice president. “Diversification in cuts, poultry and pork mix, meat aggregates, and all new product engineering were key decisions that made us achieve the growth we have today,” says Costa. “We are not concerned with being the biggest but the best, with great customer service and delivering our products in a timely fashion way.” As lead manager, Luis Carlos has positioned Pif Paf as one of the top 10 food companies in Brazil, widely recognized for its strong brand, well established distribution channels and decentralized and tailor-made delivery structure.
The diversification intensified in the 1990s and helped Pif Paf to reach a range of almost 300 products. In 1999, the unit in Patrocínio was built with a focus on swine meat. Ham has become one of the leading products, along with a line of sausage and cooked shredded poultry. Pif Paf group is also the owner of TIAL brand launched in 2005. Juices under TIAL brand are offered during the flights of well-known airline companies such as VARIG and in hotel chains. Flavors such as grape, peach, mango, passion fruit, guava and papaya are among the most popular. The group estimates an increase of 60 percent in sales during the summer.
Pif Paf turned into a model for management. Total quality programs have been poured into the company since 1994 and in 2007 it introduced the revitalization program 5S. The program focuses on a Japanese work philosophy in which discipline, common sense and group responsibility reign in the company, creating a more pleasant atmosphere.
“If today we are able to produce 150,000 pieces of poultry each day, we plan on producing twice as much within three years,” says Costa. Pif Paf is expanding fast. Last year, a new unit built in Leopoldina, also in Minas Gerais, started operations. R$15 million was invested into pizza and frozen pasta production to fulfill Rio de Janeiro’s demand, which absorbs close to 30 percent of PifPaf’s products.
This year, R$260 million is being invested in an agro-industrial complex in Goiás State, right in the middle of Brazil. The initiative will represent an increase of over 40 percent in volume and revenue. The idea is to form partnerships with local rural producers, creating state-of-the art aviaries. In addition, the use of biodiesel as fuel has been effectively integrated into the plants since 2006, reducing by 30 percent the granulated material and 100 percent the sulphur dioxide emissions.
“We reached 1,650 percent growth in a period of 10 years. In 2008 we plan on achieving R$700 million in revenues, reaching R$1 billion by 2009. If we keep this speed, our goal is to open our capital in the near future,” says Costa. “Our partnerships with organizations such as SENAI, government and local communities have furthered our social commitment, serving as important tools of expansion for us.”
A total of 60,000 clients have market demands fulfilled by Pif Paf, including big brands such as Carrefour, Habib’s, and Extra, among others. Says Costa, “We still have lots of room to grow. Brazil is a huge country.”