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Coasul Cooperative Agroindustrial is one of Brazil’s most prominent farming cooperatives for receiving, processing, storing and marketing of grains.
Well-known for commodities such as soybeans, corn, wheat, beans, rice, rye and oats, the cooperative also produces animal feed and has most recently invested in poultry processing.
Barely three years since the launch of business of its LeVida chicken products, the brand is responsible for over 30 percent of Coasul’s revenue and has defied industry trends for newcomers by becoming a successful household name and synonym for quality.
“We changed the technology of poultry farming and as a result are in a period of accelerated growth,” says president of the cooperative, Paulino Capelin Fachin.
Grains are a Given
Coasul was founded in 1969; born from the need for better transport, storage and trading facilities for agriculturalists in the southern Brazilian state of Paraná.
Today, the cooperative in São João (Paraná) has 6,464 associates and 25 grain production units. Among the services offered are complete support for the receipt, processing, storage and sale of grains plus transport services. Coasul concentrates on accommodating and facilitating its members’ businesses, providing technical assistance from agricultural engineers. It also has over 415,000 tons of storage, three of its own supermarkets, a commercial feed mill, and tools and machinery, available for associates.
“Coasul is a consolidated name in grain farming – it has been our business for 45 years,” Fachin affirms.
However, in the last three years Coasul has shifted focus and had unprecedented success with poultry farming – hatching into the domestic market with the LeVida brand in 2011. “Previously, the cooperative commercialized 300,000 tons of corn. Now this quantity is transformed into chicken feed for our farms,” Fachin explains.
Coasul began exporting chicken in 2012 and in 2013 received approval from the European Union and South Africa. “We sell to 40 countries worldwide and to all states in Brazil,” Fachin says. New opportunities are a consequence of success in existing foreign markets and approvals from China and Singapore are being finalized.
With other brands of chicken products failing to take flight in a competitive market, what makes LeVida different? The answer, according to Fachin, is unbeatable quality across the board: “We don’t aim to compete on price, but on quality,” he emphasizes.
Firstly he cites Coasul’s animal feed factory as an important differential in LeVida chicken: “Coasul produces 4 million sacks of corn a year and the best grains are selected for our own chicken feed, used exclusively by our associates and in our own production.” Coasul uses German machinery to compress corn and soy meal into pellets, which are easier and faster for the birds to ingest and contain the same nutrients as traditional powdered feed. The factory is highly technical and unites the most modern processes available on the market – “practically the most modern in Brazil and the whole world,” Fachin adds.
The cooperative’s integrated poultry house uses the Dark House system – a method that is not common in Brazil and raises the birds in an artificially lit environment. The technique for poultry production in controlled conditions allows a larger density of birds per square meter and importantly keeps them calm and undisturbed.
The technology also greatly reduces costs – providing a healthier cost to growth ratio. From hatching to slaughter, the birds are kept in artificial conditions minimizing their use of energy which is used for growth instead.
The result is poultry of the highest standard. “We maximize genetics to ensure quality,” Fachin says. “The Dark House conditions increase production through combining the three essential components of genetics: environment, temperature and feed.”
Another important ingredient of LeVida’s success is the state-of-the-art slaughterhouse and packing plant, which processes over 150,000 birds a day. The plant, which was constructed in 2010, was inspired by examples in the most technologically advanced countries and uses equipment imported to Brazil from the Netherlands.
Quality is a primary concern right down to delivery. Coasul provides logistics services to the associates – using its own fleet for the most crucial transport such as collection of the chickens and delivery of feed and trusted third parties for sending products abroad.
Together, the precise, technical and quality-focused process from beginning to end constitutes a winning recipe. “The right mix of new processes and solid procedures offered to our members and customers is the reason we have succeeded,” Fachin says.
A Flying Start
The strategy for sudden success is clearly effective in a market previously unexploited by Coasul. What made the grain-processing cooperative invest in chicken? According to Fachin “poultry farming was something that Coasul always had an interest in developing. The state of Paraná has many chicken producers, and chicken farming is a lighter alternative to pork or beef.”
Choosing chicken, Coasul has invested heavily in excelling in the industry. “We are always innovating in all areas because they are all directly related to the quality of our chicken: corn, soya and wheat are transformed into valuable feed,” Fachin says. The cooperative has extensive grain storage facilities and latest generation processing technology.
In 2013 alone more than $25 million were invested in expanding infrastructure. The cooperative purchased machinery such as fileting technology and processors, which prepare chicken for pre-prepared and cut packs. Packaging material is bought from suppliers, but the new machinery wraps and seals the products on-site for guaranteed safety and quality.
Strategic steps have made LeVida a leading brand in three short years. The number of chicken products has grown to include most recently mortadella cold cuts and sausages and other lines (such as seasoned chicken pieces) are also being extended.
Tasting the Difference
All of the company’s investments are driven by reducing labor and time and increasing productivity and variety. Individually Quick Frozen (IQF) chicken uses IQF technology that freezes pieces separately and packs them together in the same bag, enabling the consumer to remove them directly from the freezer one by one.
“We strive to be different and to take the best available resources to put better tasting chicken on supermarket shelves,” Fachin says.
The market is not the only one to be treated to a taste of LeVida’s success. Profits have risen for Coasul, reaching $390 million in 2013 with over one third of turnover coming from chicken and Fachin predicts revenue of $460 million in 2014.
Nonetheless, growth in the industry is no mean feat. In addition to many chicken producers who have failed, the cost of maintaining poultry houses, processing equipment and production plants is extremely high, and challenged by high taxes and regulation policies.
A rise in the cost of corn and soybeans took a swing at chicken farming in Brazil in 2011, which Fachin admits caused a considerable blow. However, the cooperatives careful investment inspired hasty recovery: “2012 was good, 2013 was better and 2014 will be the best yet,” he asserts.
The secret is quality. “85 percent of our associates are family businesses – small producers in a region renowned for its small farms. With the support and technology that we offer, these agriculturalists are fast and efficient and produce birds of the highest quality,” Fachin explains.
Coasul has found just the recipe to change the industry – improving the taste and presentation of chicken that and putting the LeVida brand well on the way to ruling the roost.