Agribusiness advances in industrialization – 07/11/2023 – Market

Leader in grain production until 2012, the South lost its position to the Midwest. Comprised of small and medium-sized properties, the South region has no more room for advances.

Farmers in the region, however, in addition to grain and protein producers, also become large industrialists, due to the vertical integration promoted by cooperatives.

These are increasingly inserted in the agroindustry and are already responsible for several hundred products on supermarket shelves.

A wide variety of animal protein, flour of the most diverse types, margarine, sauces, milk derivatives, edible oils, malt, coffee and a range of other products are part of the industrialization of cooperatives.

Adding value to local production and giving life to regional economies, they broaden horizons and, with their own brand, already place products both in supermarkets abroad and in Brazilian regions far from the south of the country.

The Amazon is an example. Manaus, despite the diversity of fish in the region, already receives tilapia fillets produced in Paraná.

“The path to industrialization in Brazil passes through agribusiness. We have all the conditions for the sector to evolve, and the government plays an important role in developing agreements with large importers”, says Adam Stemmer, president of Agrária, a cooperative in Entre Rios, a district of Guarapuava, in the center-south of Paraná.

Agrária, from 1951, was born with a focus on industrialization. “Everything that is produced by the cooperative must undergo industrial processing”, says Stemmer.

These goals are being put into practice. All soybeans, wheat and barley in the region are fully industrialized by the cooperative. Corn has not yet been fully industrialized, but the percentage has been increasing.

Within this spirit of industrialization, Agrária, together with Frísia, Castrolanda, Capal, Coopagrícola and Bom Jesus, which are also cooperatives, is developing a malting plant that will be one of the main sources of Brazilian malt.

The factory, which involves investments of R$ 1.6 billion, will be ready at the beginning of next year and is already attracting the attention of large beer producers, who have signed long-term contracts with the cooperatives.

As they did with soy, corn, poultry and pork, cooperatives are also promoting fish farming in Paraná, giving small farmers the chance to diversify production.

Thiago Gignani, a corn and soybean producer on his small property in the Cafelândia region (PR), gained greater economic sustainability in fish farming. The creation, which started with 14,000 fish, now totals 510,000.

The development of fish farming in the region, with the encouragement of Copacol, allowed the cooperative to install a processing factory that slaughters 190,000 fish per day, with a projection for 230,000 in 2025.

After overcoming the challenges of developing specific genetics for the region and the search for synergy between the producer and technical assistance, the cooperative already places 50 tons of meat a day on the market.

Internally, this fish goes both to supermarkets in the South and Southeast, as well as those in Manaus. Exports, which represent 15% of production, follow the preference of importers. While some countries require halal slaughter, China imports scales and skins and the United States receives chilled and frozen fillets.

Fish farming, however, has only a 6% share of Copacol’s revenues. At least 57% come from poultry, the main component of the BRL 9.3 billion in 2022.

Exports totaled R$ 3 billion last year, and the cooperative has its own brands in supermarkets in Japan, Portugal, the Caribbean and African countries.

The cooperative’s diversification and industrialization came from the need for changes in agriculture after an intense drought in the 1977/78 period. As 60% of the producers had properties of up to 20 hectares, the challenge was to look for new things to support these farmers, says Valter Pitol, CEO of Copacol.

Chicken slaughter, which started with 6,000 birds in the 1980s, currently reaches 720,000 per day in two processing units.

The cooperative industrializes 70% of the soy produced and 100% of the chicken and corn delivered by its members. The goal is a 10% growth in poultry slaughter; of 30% in pigs, and, now that it has mastered the genetics of fish, to maintain a constant evolution of the sector, says the director.

Coamo, a cooperative created in the 1970s and aimed at wheat producers, did not initially focus on industrialization. The aim was to meet the basic needs of producers by supplying inputs and purchasing their products.

Today the largest cooperative in Latin America, and headquartered in Campo Mourão (PR), it has become a powerhouse in the industrialization of products received from farmers.

It started with the industrialization of wheat and soy, went through cotton spinning, soy oil refining, margarine and coffee roasting.

With an industrial park close to R$ 11 billion, the cooperative has now entered the feed sector, has a project for the production of ethanol from corn and is also studying the possibility of producing biodiesel.

Coamo has annual revenues of R$ 28 billion, R$ 4 billion of which come from retail. The industrialization of the cooperative translates into a gain for the producer himself, says Airton Galinari, executive president.

In the daily formation of commodity prices, the cooperative also takes into account the values ​​of industrialized products, which weighs in the formation of prices to be paid to the farmer.

As a market option, however, the president of the cooperative says that the company will never dedicate 100% of its products to industrialization. “The market turns, and it is necessary to find where the best deal is”.

Coamo has become an industrial powerhouse, with a daily industrial capacity to process 8,000 tons of soy, bottling 102,000 boxes of oil, 9 tons of cotton, 700 tons of wheat, processing 400 tons of margarine and roasting 15 tons of coffee , in addition to the annual production of 200 thousand tons of animal feed.

Galinari says that the objective of the cooperative is to continue investing in industrialization, including exports. He highlights, however, the retail difficulties due to the logistical costs and strategies of each country for importing food.

Strategic positioning creates the need. Cocamar Cooperativa Agroindustrial, founded in 1963 to serve coffee producers in Maringá (PR), is now entering the beef sector.

Encouraging the ILPF program (Integration Crop, Livestock and Forestry) in northwest Paraná, the cooperative saw the need to develop a support program for producers who joined the system.

When he turns 60, he starts a program for the industrialization of early beef. It comes in addition to the other 16 industrial plants, which range from oil refineries to the production of beverages, flour, mayonnaise, coffee, cotton yarn, cogeneration of energy, biodiesel and crafted wood.

The cooperative places two hundred SKU (unique code assigned to a product) on the market, says José Cicero Aderaldo, Vice President of Cocamar. It makes the region’s agricultural economy viable.

The northwest of the state is sandy and, among the pioneering industrializations, were silkworms and citriculture. With the development of research for the region, soy and corn became important components of production and industrialization.

Adding value has always been in Cocamar’s focus. It softens market oscillations and spreads credit risks, says the vice-president.

Among the cooperative’s upcoming projects are fish farming, corn ethanol production and duplication of the soybean crushing industry.

The cooperative is the path for the producer, according to Aderaldo. At least 70% of the properties in the Maringá region have up to 50 hectares. It would never be viable for a farmer with that amount of land to be economically viable without the cooperative, he says.