January 26, 2013 Farming in Harmony

Volume 16 | Issue 1

Founded in 1970 Cooperativa Agroindustrial Copagril is one of the largest farming cooperatives in Brazil’s southern Paraná state. Averaging

Joining forces to overcome difficulty is at the heart of any farming cooperative’s success, but facing the challenges of climate changes and economic fluctuations is no mean feat. Cooperativa Agroindustrial Copagril takes the obstacles of the industry in its stride, particularly in Brazil, where high taxes, increased labor costs and logistic limitations test the patience of the farmer. “First and foremost, we offer security and peace of mind to our members,” says Ricardo Silvo Chapla, Copagril’s president.

His affirmation however, seemingly underrates Copagril’s performance. The cooperative is one of the most successful in the south of Brazil, increasing its revenue from $115 million to over $350 million in the last ten years.

COOPERATION IN THE MAKING
When the south of Brazil was colonized in the 1950s and 1970s, the need for cooperative farming to boost the sales and performance of local producers became clear. Particularly in pig farming, there were many small producers who operated individually. Immigrants to the West of Paraná brought with them methods and techniques from their homelands, but as the supply of pigs increased, the price dropped. With the creation of Copagril, the sector began to be organized, and the need emerged for the construction of a feed mill. In 1972, Copagril began buying pigs and integrating the necessary machinery with the producers.

In the 1980s, changes in the region, namely the closing of Lake Itaipú for the construction of a hydroelectric plant, had a significant impact on the agriculture. Producers were left with greatly reduced farmland and reduced productivity. Copagril offered the support needed to farmers and looked to increase stability through diversification.

In 1983 Copagril started working with milk production. Taking this step also enabled the cooperative to stabilize the milk industry in the region, making it the third largest producer in Brazil, with a monthly volume of almost three million liters and Copagril became the second biggest supplier of milk in Paraná. In 1996, Copagril established links with Mato Grosso do Sul state, receiving over one million liters of milk a month.

Having successfully expanded the cooperative, Copagril assumed a new phase of development, investing in new technology and structuring operations to include cereal production (primarily for the use in animal feed).

Simultaneously, milk production has grown and with the objective of offering the associates better livestock and productivity, Copagril has introduced a calf rearing project, which has two nurseries and rears 200 cattle.

“In 2005, we implemented our poultry farming initiative. This constitutes an important area of investment for the cooperative and we opened our own slaughter house,” says Chapla. An initiative to further diversify its agro-industrial activities, Copagril’s venture into the poultry segment was extremely successful. The new 873,000-square-meter plant can process 150,000 birds a day and generated 1,600 jobs.

The poultry treatment plant was idealized to maximize the potential of the region and added value for farmers who produced soy and corn, which was used for feed. “Poultry had a big social and economic impact on our business, and this industry now represents our most profitable and is the reason for tripling our staff in recent years. We have 307 production partners,” explains Chapla.

There is an important distinction between the cooperative’s functions; chicken production is exclusively of the Copagril brand, milk production and pig farming are collaborative projects.

STRATEGIC PLANNING
The poultry division has strengthened the company’s position in the market and has increased its infrastructure. A chicken feed factory is one of the consequences, which was constructed exclusively to produce feed for Copagril poultry, using produce from the cooperative.

“The harmony that exists between our operation and members has allowed us to grow and sustain our success. The technical developments in infrastructure have resulted from this balance and careful strategic planning and growth,” explains Chapla.

Last year Copagril invested $17 million in infrastructure and improving technology. The head offices are based in Paraná, where the pork products are also processed and stored. Around 5,200 animals are handled daily and 90 percent of the resulting meat is destined for the Brazilian market.

Dairy products are processed in Paraná – over 600,000 liters of milk are produced daily and Chapla points out that this volume is not the cooperative’s limit. “We operate carefully and plan our production levels to maintain healthy sales,” Chapla clarifies. His point exemplified by the capacity Copagril has to store cereals supplied by collaborators. Warehouses can safely store up to five million sacks of grain, which can be drawn upon and processed for feed when necessary.

The balance of activities also incorporates two supermarkets, which not only commercialize the cooperative’s products, but also offer stability. A third is due to open in December 2012. “The mix of divisions provides us with strength. The soy harvest was comparatively low this year, and other sectors compensated for potential losses,” exemplifies Chapla.

The general strategies of the cooperative have proven more than successful. Adjusting productivity according to demand and holding stock when appropriate allows Copagril to keep healthy profits and farmers in constant work. “Our priority is always to look to the needs of our associates, to offer them the conditions and opportunities they need and turn these into mutual success,” he continues. “We have no specific research and development department, our experience and collaboration dictates our decisions.”

STANDING OUT SOCIALLY
Chapla modestly points out that Copagril works effectively like many cooperatives. Respecting it associates and competitors, the company is more interested in keeping its head well above water, than cutting its neighbor’s throat. Copagril chooses to stand out from the crowd on other levels.

The global market for pork, poultry and dairy products has shrunk – thanks to the price of commodities and economic crisis. Despite this, Copagril exports approximately 50 percent of its chicken production to countries such as Japan, Hong Kong (China), Germany, Belgium, Holland, the Arab Emirates among others.

Copagril feeds the world, but still runs on a regional scale. The cooperative participates in social programs to develop the personal and professional skills of its employees. It also promotes the training of young associates and female committee members. The programs are of enormous importance to the evolution of the industry in Brazil and highlight the personal and social interest of the cooperative.

“Technology and genetic improvement, modern equipment and state-of-the art installations for the processing of chicken, pork, milk and cereals have been key factors in our growth, but working successfully in a social and environmental context has been our focus from the start,” concludes Chapla.

At the same time Copagril stretches around the globe it focuses on regional development and personal success. The harmonious balance between these factors is the reason for the cooperative’s expansion and continued profit. The farmers have become executive associates, with access to broader markets and structured sales models. From security and added value for the farmers to quality and value for money for the consumer, Copagril has it covered.

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