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The company is the largest poultry company in Mexico with over 800 production and distribution facilities. The company is headquartered in Celaya, Mexico. Traded on the BMV (Bachoco) and on the NYSE(IBA)
IBA's main strategy follows four basic ideas:
With the Mexican economy in a slump, inflation or interest rates increasing decreases consumer purchasing power significantly; this will have a direct effect on basic product companies. Depreciation (or fluctuations) in the exchange rate of the peso relative to the dollar could have the same overall effect.
The current Mexican president Felipe Calderon –part of the Partido de Accion Nacional (National Action Party)- was elected into office in 2006, no single party (Mexico has a multi-party political system) managed to establish majority in either of the houses in Mexico (Congress or Senate). This misalignment has and will continue to result in a certain level of political gridlock and political uncertainty.
The Chicken Industry has been characterized by a long-term decline in real-term pricing. The industry follows of cycle of high prices and profitability followed by overproduction which leads to periods of lower prices and profitability.
Since 2003 when NAFTA eliminated import tariffs and quotas American companies have been able to export their products which are generally frozen and value-added poultry products. This is especially true in periods of overproduction in the U.S. With weakening tariff barriers (as set out by NAFTA), American exports can be expected to increase.