Chinese group forwards acquisition of part of Languiru operations

The Chinese group ITG Tianjiao, which operates in the food sector, signed this Wednesday (22) a protocol of intent for the acquisition of control of the poultry, pork, cattle and feed operations of Cooperativa Languiru, headquartered in Teutônia. With the partnership, which still depends on the approval of the associates in the ordinary general meeting to be held on the 30th, a joint venture will emerge whose investment should be defined in the coming months, but which is between R$ 380 million and R$ 765 million.
The agreement was signed at an event at the Hilton Hotel, in Porto Alegre, when the company from Rio Grande do Sul and the Asian group, formed by the state-owned company ITG and the private company TJJT, announced a Material Fact to the Market. The idea is to internationalize Languiru even more and, within a year, reverse the export numbers.
“The cooperative currently ships 8% of its production. We want to place 90% of what Languiru produces on the international market”, said the vice-president of the Asian group’s International Market, Jinhao Zhang.
In addition to him, the CEO of ITG, Liping Huang, the president of Languiru, Dirceu Bayer, and the deputy, Cesar Wilsmann, participated in the signing. During the act, accompanied in person by representatives of the cooperative’s Audit and Administrative Councils and, via videoconference, by dozens of representatives of the conglomerate and the Chinese government, Bayer set the tone for the difficulties faced by the gaucho.
“For more than two years we have been put to the test. The increase in production costs, the pandemic, the volatility of products due to the war in Ukraine and, above all, the historical rise in the prices of the main inputs, the rise in interest rates and the cost of financing have disrupted any reference to the past. Investment bets gain a much greater risk variable”, he pointed out.
According to the director, the time has come when the cooperative can no longer walk alone. “We need to form alliances, like the one we are signing today,” he added.
Interlocution with the Chinese began through the intermediation of the state government, during Expodireto. The Asians were invited to come to Brazil by the Ministry of Agriculture and Livestock. In Não-Me-Toque, they heard about Languiru, its advanced structure and its financial problems. The Chinese executives spent weeks getting to know and analyzing the potential of the Vale do Taquari cooperative.
“From now on, we are going to deepen the studies, with strict criteria, as determined by the Chinese government, and define an investment plan. The volume and speed of financial contributions will be guided by the market, but we found a great structure and great potential in Languiru”, noted Liping.
Despite the pompous announcement, attended by representatives of important financial agents and leaders of entities in the agricultural sector, the president of Languiru preferred not to speak to the press about the negotiation. Dirceu Bayer guaranteed, however, that all information about the format of the deal will be clarified to members in a meeting scheduled for next Monday (27). And he emphasized that the cooperative is not being sold.
“Everything will be exposed to the associates. The approval of the partnership depends on them. And this should be voted on at the ordinary general meeting on the 30th”.
Pressured by debts amounting to at least R$ 800 million with suppliers, financial agents and service providers – although it is speculated that the amount exceeds twice that value -, Languiru’s management started a restructuring process last year .
In another move to try to control the financial crisis, last week Languiru had already announced the formation of partnership with Lactalis do Brasil to strengthen dairy production in Rio Grande do Sul and expand assistance to producers. Under the agreement, the cooperative will supply Lactalis, in a five-year contract, the entire volume of fresh milk from its producers.