Eggs: Granja Faria announces purchase of Katayama – 06/28/2023 – Market

Businessman Ricardo Faria, owner of Granja Faria, announced this Wednesday (28) in a statement to the market that he will assume share control of Katayama Alimentos, from Guararapes (SP), the largest egg producer in São Paulo.

The acquisition is part of a series of deals that the company has carried out in recent years. In January, Faria announced the purchase of BL Ovos, then the fifth largest company in the sector in the country, with a daily production of 2 million eggs.

The deal with Katayama is Granja Faria’s 11th, according to the businessman, but the first that does not involve the total acquisition, but the share control. Businessman Gilson Tadashi Katayama will continue as a partner in the company and will form part of Granja Faria’s advisory board.

The value of the deal was not disclosed, nor the percentage acquired by Faria, but it was more than 51% of the total, and with its own resources. As it involves large companies in the sector, the acquisition will be submitted to Cade (Administrative Council for Economic Defense).

Granja Faria will now produce 16 million eggs per day, with net revenue expected to reach R$ 3 billion this year. Of the 20 million chickens, 1 million are free-range.

Katayama is a company that is over 80 years old, founded in 1942 in Guararapes, where it has its only unit. In 2022, it reached sales of 700 million eggs and derivatives and should represent an increase of just over 13% in Faria’s revenue, which until then was estimated for this year at R$ 2.6 billion.

Katayama has a flock of 3 million birds, which produce around 2 million eggs a day.

The Brazilian egg market is very diluted. With the acquisitions made in recent years, Granja Faria reached 10% of the national market, in a sector that is marked by the participation of other important players, such as Mantiqueira.

The Mantiqueira Group began its activities in 1987 in Itanhandu (MG), with a flock of 30 thousand chickens, kept in a rented farm, and went through several expansions.

One of them, in 2008, resulted in the construction of a unit in Primavera do Leste (MT), with six million chickens. In total, there are 11.5 million birds in four units in Minas, Mato Grosso and Rio de Janeiro, according to the company.

Katayama is a traditional exporter of eggs to Japan and will help Granja Faria to remain strong in exports, which grew after the emergence of outbreaks of avian flu in the world.

“Poultry stocks outside Brazil have reduced significantly and margins, especially from exports, ended up being very high […] Brazil has been proving that it is by far the country in the world with the highest biosafety. The first infected bird arrived in Peru and a week later the poultry flocks were devastated. Arrived in Chile a week later [houve] complete disaster. He arrived in Argentina and history repeated itself. The first detected in Brazil 43 days ago and so far we haven’t had any commercial birds affected,” said the businessman.

According to data from the ABPA (Brazilian Association of Animal Protein), the consumption of eggs per person in Brazil jumped from 131 per year, in 2007, to 257, in 2021. Despite having almost doubled, it is below that seen in countries like United States (320) and Japan (450).

For the Executive, there is room for the sector to grow more in the country, given the spraying and due to the average increase in volume, of 5% per year.

“We see in Brazil and in the whole world a change of category, people leaving dairy products and milk for consumption of eggs. We see clearly a growth of the category of eggs around the world, especially in Brazil”, said Faria.

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Farm Faria
Net revenue (forecast for 2023): BRL 3 billion
Ebitda (2022): BRL 470 million, up 167.4% compared to the previous year
Employees: 2,500
Production units: 11 for fertile eggs and 11 for commercial eggs
Breeding: 20 million chickens
Egg production: 16 million per day