January 10, 2017

BRF SA, Brazil’s largest meatpacker, and Qatar’s sovereign wealth fund have acquired Banvit, the largest poultry producer in Turkey in a deal that values the company at $470 million.

Under the terms of the deal BRF and Qatar Investment Authority (QIA) have formed a joint venture through which BRF will control a 40 percent interest in the new venture, while QIA will be the majority stakeholder with the remaining 60 percent. The first phase of the transaction centered on the acquisition of 79.5 percent of the company, to be followed by a later tender offer for the remaining 20.5 percent.

The announcement of the deal comes less than one week after BRF announced the formation of OneFood, a new subsidiary that is being labeled as the largest halal meat company in the world.

Based in Dubai, OneFood will encompass all of BRF’s assets associated with the production of halal meat including feed mills, grain storage, chicken hatcheries, eight slaughterhouses in Brazil, and one processing plant located in UAE, reports Global Meat News. Additionally, BRF plans to integrate the equity of FFM Further Processing in Malaysia and other distribution centers in Qatar, Saudi Arabia, UAE, Kuwait, and Oman into the subsidiary, which will now include Bavit as well.

“The acquisition of Banvit is the first step on the agenda to accelerate the growth of OneFoods, which holds market share in chicken products of approximately 45 percent in Saudi Arabia, United Arab Emirates, Kuwait, Qatar and Oman, countries where it operates with its own distribution and a broad product portfolio,” explained Patricio Rohner, head of OneFood.

Banvit and Turkey

With operations that span from feed to processing, Banvit is a fully integrated leader in Turkey’s meat sector with five feed plants, four hatcheries, and five production plants.

“The units are located in the country’s West, which concentrates most consumers, and East, which positions it as the only company capable of serving both the domestic and export markets,” said Pedro Faria, Global CEO of BRF.

With a population of 80 million, of which 98 percent identify as Muslim, the halal meat market in Turkey poses a unique opportunity for global expansion for BRF. The global halal food industry is worth approximately $1 trillion, according to Nurettin Canikli, Turkey’s Minister of Customs and Trade, and of this market, Turkey contributes around 10 percent. Furthermore, looking forward, the 2015 edition of the State of the Global Economy report issued by Thomson Reuters states that global spending on halal foods is expected to climb to $2.5 billion by 2019.

Additionally, ITE Food & Drink notes that Turkey’s geographic location, spanning between Asia and Europe is key to halal food trade flows. Surrounded by Muslim countries, Turkey is central to a region of more than 1.2 billion halal consumers, but not just consumers – young consumers who are looking for processed and ready-to-eat halal food choices, making a foothold in the country’s meat industry even more valuable.

“In addition to the growth opportunities offered by the Turkish market, especially in processed products, we see important commercial and operational synergies to capture by integrating the operations of Banvit and OneFoods, which will further consolidate our strength and leadership in the halal animal protein market,” said Rohner.

–Lynda Kiernan