SDA » Topics » Distribution

This excerpt taken from the SDA 20-F filed Jul 30, 2009.

Distribution

        Within the Brazilian market, Sadia sells its finished products through its own distribution network to wholesale and retail outlets, as well as to institutional clients and food services clients. For the year ended December 31, 2008, the Company sold products to approximately 125,000 customers throughout Brazil. Sadia's distribution strategy in Brazil is focused on selling directly to customers rather than selling to large distributors that then resell the products. This strategy avoids concentration among a few large purchasers.

        Sadia maintains sales representation offices in Argentina, Austria, Chile, China, England, Germany, Japan, Netherlands, Portugal, Russia, Turkey, the United Arab Emirates, Uruguay and Venezuela. In 2008, it sold products to approximately 628 foreign clients.

        Our distribution arrangements in our export markets vary according to the market:

        Europe. In Europe, we have developed our own distribution network and sell directly to food processing and food services companies as well as local distributors. We are currently able to distribute products in 24 European countries, and we are able to deliver such products within approximately three to four days of receiving an order. We intend to expand our distribution network to broaden and deepen our coverage in Europe and to support more targeted marketing efforts. We are also able to process some products in Europe, which allows us to distribute those products more effectively.

        Far East. In Japan, our biggest market in the Far East, we sell to distributors and trading companies. We primarily supply special cuts of chicken, including boneless legs and wing cuts, produced specifically for the Japanese market, which has helped us foster customer loyalty. We also believe that our quality standards and product range have made us one of the preferred suppliers of chicken products in the Japanese market. In addition to Japan, we sell a significant amount of products in Hong Kong and Singapore. Our most popular products in these latter markets include chicken wings and feet and pork cuts.

        Eurasia. In Russia and other areas of Eurasia, we sell primarily to distributors, who resell our products to supermarkets and other customers. Our Sadia brand of pork, poultry and further processed products is carried in many supermarkets, and we believe it is a well-recognized brand in Russia. We have historically sold approximately 54.3% of our frozen pork cuts to Russia and Eurasia and also supply volumes of frozen whole and cut chickens. Russia imposes quotas on imports of poultry and pork products from Brazil and other exporting countries. It is not uncommon for Russian quotas for poultry and pork products to be subject to changes in policy and delays in allocation, and a delay in allocating quotas to poultry in the first half of 2006 led to a significant decline in our sales volumes of poultry products during that period. The Company formed a joint venture in Russia in 2006 with a local partner aiming at local production of meat. The joint venture launched its operations on commercial scale in early 2009. The Company is currently in negotiations to sell its stake in the joint venture to its partner. This decision does not change the Company's market strategy in the Russian market which was built solely based on exports from Brazil. For more information on this joint venture and the contemplated sale of the Company's interest in it, see "Item 4. Information on the Company—A. History and Development of the Company—Investments (Capital Expenditures)."

        Middle East. In the Middle East, we sell our products through large distributors, primarily frozen whole and cut chickens, as well as a significant volume of further processed products. We are leaders in the retail segment in the Gulf countries for whole chicken and chicken parts (according to the Middle East Marketing Research Bureau) and our Sadia brand has reached the leadership on the "Top of Mind" and "Preference" researches, carried out by Information Systems, Organisation and Society (ISOS) Research. We believe that we are one of the preferred suppliers of these products in this region due to our quality standards and our long-standing relationships with large distributors, most of which have been our customers for decades. We have also started developing our own distribution network in Saudi Arabia.

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        Americas. In Americas we sell primarily frozen whole chicken and chicken cuts, with Venezuela currently being a very significant market for us. We also have a distribution network in Argentina, Uruguay and Chile.

        Africa and Other Countries. We sell modest amounts of our products to several countries in Africa and other regions, primarily through trading companies that resell our products to distributors. Our sales to many of these countries are subject to significant fluctuations in demand.

        In 2008, the ten largest export customers of the Company represented 43.0% of total exports, while the then largest domestic customers of the Company represented 23.9% of total domestic sales, the largest of such clients accounting for 7.2% of total domestic sales and 11.9% of total export sales.

This excerpt taken from the SDA 20-F filed Jun 30, 2009.

Distribution

        Within the Brazilian market, Sadia sells its finished products through its own distribution network to wholesale and retail outlets, as well as to institutional clients and food services clients. For the year ended December 31, 2008, the Company sold products to approximately 125,000 customers throughout Brazil. Sadia's distribution strategy in Brazil is focused on selling directly to customers rather than selling to large distributors that then resell the products. This strategy avoids concentration among a few large purchasers.

        Sadia maintains sales representation offices in Argentina, Austria, Chile, China, England, Germany, Japan, Netherlands, Portugal, Russia, Turkey, the United Arab Emirates, Uruguay and Venezuela. In 2008, it sold products to approximately 628 foreign clients.

        Our distribution arrangements in our export markets vary according to the market:

        Europe. In Europe, we have developed our own distribution network and sell directly to food processing and food services companies as well as local distributors. We are currently able to distribute products in 24 European countries, and we are able to deliver such products within approximately three to four days of receiving an order. We intend to expand our distribution network to broaden and deepen our coverage in Europe and to support more targeted marketing efforts. We are also able to process some products in Europe, which allows us to distribute those products more effectively.

        Far East. In Japan, our biggest market in the Far East, we sell to distributors and trading companies. We primarily supply special cuts of chicken, including boneless legs and wing cuts, produced specifically for the Japanese market, which has helped us foster customer loyalty. We also believe that our quality standards and product range have made us one of the preferred suppliers of chicken products in the Japanese market. In addition to Japan, we sell a significant amount of products in Hong Kong and Singapore. Our most popular products in these latter markets include chicken wings and feet and pork cuts.

        Eurasia. In Russia and other areas of Eurasia, we sell primarily to distributors, who resell our products to supermarkets and other customers. Our Sadia brand of pork, poultry and further processed products is carried in many supermarkets, and we believe it is a well-recognized brand in Russia. We have historically sold approximately 60% of our frozen pork cuts to Russia and also supply volumes of frozen whole and cut chickens. Russia imposes quotas on imports of poultry and pork products from Brazil and other exporting countries. It is not uncommon for Russian quotas for poultry and pork products to be subject to changes in policy and delays in allocation, and a delay in allocating quotas to poultry in the first half of 2006 led to a significant decline in our sales volumes of poultry products during that period. The Company formed a joint venture in Russia in 2006 with a local partner aiming at local production of meat. The joint venture launched its operations on commercial scale in early 2009. The Company is currently in negotiations to sell its stake in the joint venture to its partner. This decision does not change the Company's market strategy in the Russian market which was built solely based on exports from Brazil. For more information on this joint venture and the contemplated sale of the Company's interest in it, see "Item 4. Information on the Company—A. History and Development of the Company—Investments (Capital Expenditures)."

        Middle East. In the Middle East, we sell our products through large distributors, primarily frozen whole and cut chickens, as well as a significant volume of further processed products. We are leaders in the retail segment in the Gulf countries for whole chicken and chicken parts (according to the Middle East Marketing Research Bureau) and our Sadia brand has reached the leadership on the "Top of Mind" and "Preference" researches, carried out by Information Systems, Organisation and Society (ISOS) Research. We believe that we are one of the preferred suppliers of these products in this region due to our quality standards and our long-standing relationships with large distributors, most of which have been our customers for decades. We have also started developing our own distribution network in Saudi Arabia.

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        Americas. In Americas we sell primarily frozen whole chicken and chicken cuts, with Venezuela currently being a very significant market for us. We also have a distribution network in Argentina, Uruguay and Chile.

        Africa and Other Countries. We sell modest amounts of our products to several countries in Africa and other regions, primarily through trading companies that resell our products to distributors. Our sales to many of these countries are subject to significant fluctuations in demand.

        In 2008, the ten largest export customers of the Company represented 43.0% of total exports, while the then largest domestic customers of the Company represented 23.9% of total domestic sales, the largest of such clients accounting for 7.2% of total domestic sales and 11.9% of total export sales.

This excerpt taken from the SDA 20-F filed Jun 27, 2008.

Distribution

 

Within the Brazilian market, Sadia sells its finished products to wholesale and retail outlets, as well as to institutional clients. For the year ended December 31, 2007, the Company sold to approximately 108,000 customers throughout Brazil. Sadia´s distribution strategy is based on the importance of direct sales to customers, thereby avoiding concentration among a few large customers.

 

Sadia maintains sales representation offices in Germany, England, Russia, Japan, China, the United Arab Emirates, Argentina, Uruguay, Chile, Panama and Turkey. In 2007, it sold to approximately 645 foreign clients.

 

In 2007, 36.0% of total exports were sold to approximately 10 long-standing customers. All of these customers have imported increasing quantities of the Company´s products over the last ten years.

 

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This excerpt taken from the SDA 20-F filed Jun 29, 2007.

Distribution

Within the Brazilian market, Sadia sells its finished products to wholesale and retail outlets, as well as to institutional clients. For the year ended December 31, 2006, the Company sold to approximately 96,000 customers throughout Brazil. Sadia´s distribution strategy is based on the importance of direct sales to customers, thereby avoiding concentration among a few large customers.

Sadia maintains sales representation offices in Germany, England, Russia, Japan, China, the United Arab Emirates, Argentina, Uruguay, Chile, Panama and Turkey. In 2006, it sold to approximately 476 foreign clients.

In 2006, 50.0% of total exports were sold to approximately 10 long-standing customers. All of these customers have imported increasing quantities of the Company´s products over the last ten years.

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This excerpt taken from the SDA 20-F filed Jun 30, 2006.

Distribution

Within the Brazilian market, Sadia sells its finished products to wholesale and retail outlets, as well as to institutional clients. For the year ended December 31, 2005, the Company sold to approximately 94 thousand customers throughout Brazil. Sadia´s distribution strategy is based on the importance of direct sales to customers, thereby avoiding concentration among a few large customers. 

Sadia maintains sales representation offices in Germany, England, Russia, Japan, China, the United Arab Emirates, Argentina, Uruguay, Chile, Panama and Turkey. In 2005, it sold to approximately 426 foreign clients.

In 2005, 60% of exports were sold to approximately 10 long-standing customers. All of these customers have imported increasing quantities of the Company´s products over the last ten years.

This excerpt taken from the SDA 20-F filed Nov 14, 2005.

Distribution

 

Sadia maintains sales representation offices in Germany, England, Russia, Japan, China, the United Arab Emirates, Argentina, Uruguay, Chile, Venezuela and Turkey.

 

Within the Brazilian market, Sadia sells its finished products to wholesale and retail outlets, as well as to institutional clients. For the year ended December 31, 2004, the Company sold through approximately 300,000 points of sale throughout Brazil.

 

Sadia’s distribution strategy is supported by direct sales to customers, thereby avoiding concentration among a few large customers.

 

In 2004, 54% of exports were sold to approximately 10 long-standing customers. All of these customers have imported increasing quantities of the Company’s products over the last ten years. European countries corresponded to 29% of export sales in 2004 against 38.4% in 2003. Exports to emerging markets, such as Russia and other former Soviet Union countries, have also been growing consistently, mainly due to pork and chicken exports. The America region, which comprises North, Central and South America, represented 11% in 2004 against 5% in 2003, mainly due to the expansion of exports to Andean countries.

 

This excerpt taken from the SDA 20-F filed Jul 12, 2005.

Distribution

 

Sadia maintains sales representation offices in Germany, England, Russia, Japan, China, the United Arab Emirates, Argentina, Uruguay, Chile, Venezuela and Turkey.

 

Within the Brazilian market, Sadia sells its finished products to wholesale and retail outlets, as well as to institutional clients. For the year ended December 31, 2004, the Company sold through approximately 300,000 points of sale throughout Brazil.

 

Sadia’s distribution strategy is supported by direct sales to customers, thereby avoiding concentration among a few large customers.

 

In 2004, 54% of exports were sold to approximately 10 long-standing customers. All of these customers have imported increasing quantities of the Company’s products over the last ten years. European countries corresponded to 29% of export sales in 2004 against 38.4% in 2003. Exports to emerging markets, such as Russia and other former Soviet Union countries, have also been growing consistently, mainly due to pork and chicken exports. The America region, which comprises North, Central and South America, represented 11% in 2004 against 5% in 2003, mainly due to the expansion of exports to Andean countries.

 

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