In Portuguese, sadia means "healthy," and that's an appropriate word to describe the second quarter that chilled- and frozen-food producer Sadia
Sadia, established in Brazil in 1944, is one of the world's leading producers of chilled and frozen poultry and swine products. The company's offerings are winning over a growing number of consumers worldwide and services more than 200 clients, as far away as Europe (which accounts for 25% of revenues) and the Middle East (23%). Export sales grew by more than 45% during the quarter, helped along by a 16.9% price increase that management pushed through.
Back home, Sadia's domestic market share jumped to more than 82% in the second quarter, up from about 72% year over year.
The company's impressive results occurred despite a 9.4% appreciation in the local currency relative to the U.S. dollar. Management cited lessening fears over avian flu as a catalyst for increased demand for its poultry products, whose average export price rose more than 27% year over year.
Some other initiatives that CEO Gilberto Tomazoni cited as aiding Sadia's growth included an expansion at its Lucas do Rio Verde unit -- an improvement that makes it "one of the most modern plants in the world" -- and the company's sponsorship of the Pan-American Games, an alliance that he said "covers the whole Olympic cycle, extending to the 2008 Beijing Games."
The company turned increased sales into improved operating performance, too. Gross margins climbed to 25.7% from 20.6%, while net margins clocked in at 5.4%, up from 1.1% a year ago.
Sadia's competition is also experiencing healthy growth -- fellow Brazilian food processor Perdigao