One of Brazil's largest producers of chicks and chicken unites small, medium and medium-large sized companies in the food segment, making them more competitive on a global scale. Reuben Ford reports on a company that takes conflict out of commercialization and represents the collective interests of a growing market.
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Unifrango Agroindustrial SA was founded to facilitate and oversee its clients’ purchases of agricultural inputs in the poultry sector. Today, the company expands its activities to include all areas of sales, logistics and business intelligence. It grows and improves poultry production processes from egg to chicken cuts.
As clients increase their participation in the domestic and international markets, the company has explored new opportunities. Unifrango offers services, which are inaccessible to each one individually, generating better results and supplier relations.
Thanks to the success of its services, Unifrango is expanding its range of products, applying the principles and relationships developed through chicken production and sales to other foods and feed.
“We are changing the negotiating buying process with more focus on establishing a strong supply chain assuring growth for our clients as well as competitive pricing,” states Hudson Silveira, an Executive of Unifrango.
Founded by poultry farming and chicken industry experts in Paraná state in 2001, Unifrango Agroindustrial SA began its activities buying large volumes of agricultural commodities for animal feed, abattoirs and hatcheries. The objective was simple: reduce costs and create competitive advantage for its clients.
The success, in a region with plenty of small and mid-sized producers, was immediate. Unifrango allowed them to compete with large companies and broadened markets. Seizing the opportunity afforded by growth, Unfrango started mediating sales of chickens and chicken cuts in 2004.
The company continued growth in 2005 and 2006 by initiating imports of some commodities and launching exports.
Today, Unifrango is formed by 18 shareholding companies, 14 of which are slaughterhouses with integrated production of chicken cuts and six commercial hatching houses (two of which are also slaughterhouses). The company’s shareholders export to more than 120 countries worldwide and have the most advanced production technology at their disposal.
Unifrango’s shareholders are the third largest producer of chicken in Brazil, processing over 2 million birds a day. It is the market leader in commercial production of chicks – hatching 2.2 million a day.
“We are not a holding company or a cooperative society, we see our shareholders as clients, and as an independent company successfully assist them in achieving results that would be impossible individually,” Silveira clarifies.
Operating independently, Unifrango has clients throughout the south and south-west region of Brazil. “The company is a viable business option for smaller and mid-sized producers. We reduce processing, commercial, storage and logistics costs as well as encourage intelligent expansion of their enterprises,” Silveira says.
Nurturing institutional relationships over 13 years has established a consolidated reputation of trust, reliability and respect that brings innumerous advantages to its clients and suppliers. As well as the shareholders, Unifrango mediates for third parties. “We avoid conflict. We do not share sensitive information between our clients such as customer information but we help our clients make informed decisions on when to buy and sell commodities, animal feed, chicken meat and logistics. We do not replace the buyer or the sales manager who play a key role in the process, rather we act as a platform to help them buy and sell. Everyone wins,” Silveira affirms.
Unifrango is constantly striving to provide the best value, support and services to its clients; 50 percent of whom are now third parties and this number is increasing.
Work on the company’s $12.5-million distribution center in Paraná began in 2010, destined to cater to increased demand for storage and cargo handling facilities.
Silveira explains the significance of the center: “The distribution center was an important step in opening up our business. The facility is also used for beef, pork, fish, fruit juices and powdered milk and dairy products. We have applied our know-how to the entire food market and increased growth, profitability and investment thanks to a broader range of products.”
The center opened in 2013 and confirmed Unifrango’s participation in the client’s complete production cycle. “Now, with the distribution center all of our clients can benefit from our storage and logistic services,” Silveira adds. Among these advantages are fast and easy access to the port of Paranaguá, gateway to world exports.
Mediation and Management
The company is committed to working on the best way possible to execute business, facilitating purchases and reducing costs to make clients more competitive in a global market. Additional services such as cargo insurance and credit, otherwise extremely costly for individual entities are more accessible. “We not only negotiate for our clients but we also regularly inspect their plants to ensure all aspects of compliance, monitor relationships between suppliers and customers including credit checks and levels of service and we liaise with local and federal government agencies and relevant associations on their behalf,” Silveira explains.
Although 95 percent of clients are in the poultry farming sector, more and more dairy, beef, pork and animal protein producers are identifying the advantages of Unifrango’s management services.
Unifrango has two facilities in Paraná state, where 99 percent of shareholders are based. The distribution center, certified by the Federal Inspection Service (SIF) is located in Apucarana City and provides cold and dry storage (capacity for over 9,000 pallets), cross docking, cold recovery (capacity for 200 pallets) and a container loading capability for exporting. There is a full service financial and administrative business office in Maringa City.
“We are currently in the process of restructuring. Our intention is a balance between business and storage logistics and we are in the middle of making the necessary adaptation. With the expansion of the distribution facility growth is projected to be 80 percent per annum,” Silveira reveals. Also planned for the near future is Unifrago’s own brand of food products.
The changes are the object of investment, but Silveira points out that the state-of-the-art distribution center, business expansion, improving control systems and professional training also account for considerable company spending. Unifrango refers to three pillars that unite and support its business concept: ethical and clear negotiations, confidentiality of each client’s sales figures and objectives, and modern solutions provided by a skilled team.
“Training staff is important, especially as we have no direct competitors – there is no other company that provides the range of services and knowhow that we do,” Silveira says. The company is also currently considering the opening of a Unifrango University, which will formalize learning and professional qualification procedures.
With a unique concept, Unifrango provides a real opportunity for small and mid-sized producers to survive and thrive in a market threatened by global producers. “We give our clients the chance to export to North America, Asia, Europe and the Middle East, at globally competitive prices,” Silveira says. Unifrango co-sponsors customers in international trade fairs and invests in its own stands to showcase their products.
Actions in Brazil and abroad have resulted in growing interest and a marked increase in revenue. In 2013, Unifrango’s growth hit a record 80 percent and even with the investments and adjustments underway this year, figures are estimated at 130 to 150 percent growth in 2014.
“In one of the most competitive industries worldwide, we focus on the interests of our clients – promoting family businesses and facilitating labor and cost-intensive processes. We are aware that Brazilian production needs to improve and invest in all areas of the poultry production chain to increase competitiveness in a global market,” Silveira says.
Unifrango has carved an interesting and intelligent niche in the market and provided important opportunity for Brazilian producers. As its growth figures continue to soar, infrastructure expands and products diversify, the market leader is one to watch.