May 23, 2017

The largest deal in the history of the Chilean pork sector has been finalized in Copenhagen. The Danish Agribusiness Fund (DAF) has agreed to invest $12 million in Chile-based Coexca S.A., one of the leading pork producers in Latin America.

The deal, which was facilitated by Edinburgh-based agricultural investment firm JB Equity, will provide support for Chile to further its reach into the global pork market. It also will open the door for an ambitious five-year, $40 million investment plan, according to a JB Equity release.

With sales offices in both Asia and Europe, Coexca exports its products to more than 33 countries with a large percentage of these exports going to Asian markets, earning the company turnover of $85 million.

However, Guillermo Garcia Gonzalez, CEO of Coexca, said that this investment deal with DAF is indicative of an “exciting new stage of development for the company.”

“Our union with DAF and JB Equity will allow us to double Coexca’s current pork production capacity and establish a new and modern pig farm in the Maule Region of Chile,” said Gonzalez.

Gonzalez told Global Meat News that the new pig farm would total 1,000 hectares and would lift the company’s pig herd from 7,500 to more than 1,000 head. The company also has plans in the pipeline for a new industrial freezer and the commencement of a second deboning shift beginning in 2018.

At nearly 22 kilograms per person per year, Chile has the highest pork meat consumption rate in all of Latin America. However, thanks to a high level of re-investment in the industry, improvements in food safety and production technology, and the country’s focus on international trade, the country now stands as the sixth largest pork exporter in the world.

This deal will not only provide Coexca with the capital needed for these improvements, but also will serve to strengthen ties for the company with Denmark, the top pork producer in the world.

“Denmark is the leading country in pork production [and DAF] will help us to be a better and stronger company. It is a big honour [sic] to join force with them. I am very happy Gonzalez told Global Meat News.”

“Coexca is a good example of what cooperative and progressive farmers and processors can achieve by working with institutional investors who understand their industry,” said Helle Bjerre, vice president for Latin America, DAF.

DAF

In January 2016 it was announced that PensionDenmark and PKA have partnered with the government of Denmark and the Investment Fund for Developing Countries (IFU) to launch the newly formed Danish Agribusiness Fund (DAF), designed to improve agricultural production in developing countries.

Each of the pension funds committed DKK 200 million (US$29 million) to the 700 million kroner (US$101.85 million) agri-focused fund, which was launched with the goal of investing along the entire supply chain, from “farm to fork” across Asia, Latin America, Africa, and certain points across Europe, including Danish commercial ventures. The fund will be managed by the IFU which oversees 1,200 investments in more than 100 developing countries in Asia, Africa, Latin America, and Europe.

As a facilitator of the investment agreement between Coexca and DAF, which JB Equity’s chief investment officer Hamish Webb refers to as a “perfect union” between one of the top pork producers in Chile and one of the most experienced agricultural investors in Europe, JB Equity will join Coexca as a shareholder, netting a 2 percent stake in the company. 

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.