Minerva Foods to acquire assets in Australia

Brazil
Published:  18 February, 2021

The Brazilian meatpacker has signed a non-binding memorandum of understanding with SALIC, aimed at the possible acquisition of assets in Australia and the formation of a joint venture focussed on breeding, farming, processing and exporting sheep and cattle.

On February 11, Minerva Foods approved the signing of a contract governing the sale, supply and exports of goods produced and sold by the Company to SALIC, to be entered into by the Company, in the capacity of supplier, and Salic (UK) in the capacity of buyer. The Brazilian meatpacker said that, with SALIC’s support, the Supply Contract should strengthen Minerva Foods’ exposure and operations in the Middle East and Asia, which comprise around 65% of the world’s population and 40% of global GDP. According to the U.S. Department of Agriculture (USDA), these markets accounted for over 60% of global beef imports in 2020. In the three first quarters of 2020, the region was the destination of around 55% of Minerva Foods’ beef exports.

Under the Supply Contract, SALIC may acquire up to 25,000 metric tons of Minerva’s products per year, at market prices in accordance with pre-defined terms and procedures. Minerva Foods also signed a non-binding memorandum of understanding with SALIC, aimed at the possible acquisition of assets in Australia and the formation of a joint venture focused on breeding, farming, processing and exporting sheep and cattle in that country.

“Australia is the world’s leading exporter of sheep meat processed products and the second largest exporter of beef; it is recognised worldwide for the tradition and quality of its products, accessing both high-growth markets, such as Asia and the Middle East, and markets with high income levels that enable high profitability, such as the U.S., Europe, Japan and South Korea, among others”, said Minerva. “The Company believes that Australia uniquely complements our operations in South America, maximising sales opportunities and operating synergies, reducing risks and contributing to our strategy of consolidation in the animal protein export market.” Minerva said that with the potential creation of the joint venture set forth in Australia MoU, in partnership with SALIC, it is seeking to maximise new business opportunities, in order to meet the growing global demand for animal protein.

SALIC Australia’s wholly owned subsidiary Merredin Farms is the local farming entity that produces high quality combinable crops and livestock products. Total farm size is 211,000 ha. This land portfolio includes 158,000 ha arable land of which just over 90,000 ha are cropped in the current season. In addition, the business runs about 40,000 Merino sheep, which is Australia’s classic dual-purpose sheep breed that produces wool, lamb and sheep meat. SALIC UK is the Group’s wholly owned subsidiary based in London, established in 2014 to facilitate SALIC’s investments in new overseas ventures. It oversees SALIC’s investment fund management activities in the UK, acting as a holding company for investments in Europe, North America and other regions.