Village and Cepam file for judicial recovery – 01/31/2024 – Market

Village Cepam Indústria de Chocolates and Cepam Comércio de Alimentos filed for judicial recovery on the 23rd, with debts totaling R$73.4 million. Both headquartered in São Paulo, the companies belong to the families that founded Cepam in 1968 and Village in 1973.

Village is one of the most popular manufacturers of cakes, cookies and panettone in the country, which until 2022 also produced Easter eggs, while Cepam, a famous bakery in the east of São Paulo, was already named the largest in South America, with 2,500 m², a space that also houses a large restaurant. Together, they employ around 600 people.

The request for judicial recovery was made by the law firm Otto Gübel Sociedade de Advogados. This Tuesday (30), judge Paulo Furtado de Oliveira Filho, from the 2nd Court of Bankruptcy and Judicial Recoveries of the TJ-SP (Court of Justice of the State of São Paulo), requested some documents, such as the cash flow report and the amounts demanded in labor actions, which must be delivered within 15 days.

In the petition, Village’s defense argued that the judicial recovery is a consequence of the Covid-19 pandemic that has compromised the company’s operations since 2020. Until then, says lawyer Otto Willy Gübel, the company did not depend on bank loans to operate.

“The Covid-19 pandemic meant that some bank loans had to be taken out by the applicants, especially to keep their employees active and cover the very high costs of
operation”, says the defense. “As a result of the intense, but fruitless efforts, the economic and financial situation of Cepam and Village Cepam worsened dramatically to the point of having to look for the necessary help in the market”, informs the text.

The defense itself reveals, however, that Cepam’s operation during the pandemic was a highlight: the bakery was the single store (not a franchise or chain) that sold the most on the iFood app in April, May and June 2020, with an average 1,000 to 1,100 deliveries per day. The company, however, complains about the high fees charged by delivery apps, in addition to revealing that it hired 50 motorcycle couriers to fulfill orders in the most acute phase of the pandemic.

“The applicants reinvented themselves by subscribing to delivery services and applications, something that was previously unusual for them, as deliveries were always punctual and carried out by their own car. Obviously, such applications enable a much greater reach in demand, but they also require that a high margin be ‘consumed’ to use the platform”, says the petition.

“50 motorcycle couriers were suddenly hired, overnight, without, however, being sure that they were making the correct decision, as everything was still very uncertain as to how long the situation would last, the aggressiveness of the virus and demand versus supply in the market.”

Village, which manufactured Nestlé’s Easter eggs, reported having been severely affected by the closure of establishments 19 days before the 2020 celebration. “There were hundreds of thousands of returns of Easter eggs carried out by large supermarket chains. and hypermarkets of all Village products, as the devastating majority of deliveries made are in consignment mode, which has caused very serious losses for the applicants”, says the petition.

In 2019, for example, Village had sold R$32 million at Easter alone. In 2020, it was R$16 million.

In an interview with Sheet in 2022, Village’s then commercial director, Reinaldo Bertagnon, stated that the company would not produce chocolate eggs that year, the first interruption in 22 years, due to the increase in the price of inputs, especially packaging, which made the operation impracticable.

Even so, the company also reported, in 2022, that it was exporting panettone to Japan. In the year, exports in general accounted for around a fifth of Village’s revenue, which was not disclosed. The company also produces panettone for supermarket chains’ own brands.

At Cepam, around 16 thousand French breads and 11.2 thousand products are produced daily. On weekends, the bakery receives approximately 8,000 customers. The company is responsible for snack kits for large hospitals, such as Albert Einstein, in São Paulo, in addition to supplying hamburger bread for the Bob’s snack bar chain, says the petition.

If the request for judicial recovery is granted, the companies will have 60 days to present the plan and all actions against them are suspended for 180 days. Cepam already had a bankruptcy petition distributed last year – a fact that, according to the defense, triggered a “trigger” in the other creditors, who went to court.

A Sheet tried to contact João Diogo, son of one of the founders, Antônio Diogo, but did not receive a response until this text was written. Relatives of the other founder, Germano Amaro, are also partners: Vilma Aparecida Blanco Amaro and Vera Lúcia Fiacomelli Amaro. Another partner is Hilda Amara Macarrão.