Languiru associates must approve partnership with Chinese
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The members of Cooperativa Languiru are expected to approve this Thursday (30th), in an ordinary general meeting, the advancement of negotiations between the company and the Chinese group ITG Tianjiao for the creation of a joint venture. The business is considered the salvation to maintain the viability of the cooperative’s activities, with a net debt of R$ 780 million with the financial system and another R$ 200 million with suppliers of animal protein, inputs and service providers.
The endorsement of the cooperative members will be the materialization of the effort of the board, which in recent days has intensified the dialogue with the associates in meetings to open up Languiru’s numbers and perspectives in scenarios of approval and rejection of the Chinese proposal. Upon hearing the reports, many of those who were reticent came to understand the importance of the agreement for the survival of the activity itself.
Even though the cooperative’s revenue was BRL 2.7 billion in 2022 and assets exceed BRL 1.2 billion, the tendency would be to end 2023 with a loss of BRL 500 million. And the situation would become even worse.
For this reason, the partnership established last week, with the signing of a protocol of intentions between the parties, involving poultry, pork, cattle and feed operations, is considered a milestone for the rebirth of Languiru. The format of the deal and the amounts involved will only be defined after the arrival of a Chinese entourage for an immersion in the numbers and structure of the cooperative, but it is certain that the shareholding control of the new company will be foreign, if the partnership is confirmed.
The Rio Grande do Sul part of the business should be responsible for between 20% and 45% of poultry and pork operations, segments that generated a loss of R$ 400 million in the last two years. This is where a large part of the cooperative’s cash difficulties come from, which over the last decade has invested in modernizing its refrigerating plants. Another part of this equation is the exponential increase in the price of the main inputs, such as corn and soybeans, linked to bank rates beyond the ability to pay the financing, with the Selic at 13.75% and without signs of a downward trend, justifies the president from Languiru, Dirceu Bayer.
“The greater the percentage acquired by the Chinese, the greater the size of the debt that we will be able to settle. We seek partnerships with other cooperatives, but the business that emerged was this one. And there is no longer any way to escape globalization. We cannot survive alone. If the deal materializes, the cooperative will be fully viable again”, guarantees Bayer.
With annual revenues of US$ 71 billion, the giant ITG operates in several segments and has a large market capacity for Rio Grande do Sul products to offer, including its own naval port. Before signing the commitment with Languiru, representatives of the Chinese group spent around 10 days getting to know the cooperative and getting their first impressions of the business potential from an Asian point of view.
“The deal will greatly relieve our situation and expand the penetration of our products in the foreign market. We have been trying for nine years to enable a refrigerating plant to export to China, without success. On the other hand, for the Chinese, the appreciation of the same products is 6% higher than the prices practiced in Brazil, and the rates do not exceed 4%”, adds the director.
The condition imposed by Languiru itself for the business is participation in the discussions and management of the new company. The management would be Chinese, with the guarantee that representatives from Rio Grande do Sul would be on the Board of Directors.
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