Brazil’s BRF buys majority stake in Malaysian meat processor

By Oscar Rousseau

- Last updated on GMT

BRF said it wants to enhance its presence in Southeast Asia and grow its halal lines
BRF said it wants to enhance its presence in Southeast Asia and grow its halal lines

Related tags Islam Southeast asia Beef Lamb Poultry

Brazilian food conglomerate BRF has entered into an agreement with Malaysian agri-food firm FFM Berhad to acquire a 70% stake in its subsidiary FFM Further Processing (FFP) for $16m.

BRF’s move to buy a controlling stake in FFP comes as the business embarks on a major effort to enhance its position in halal-dominated markets in Southeast Asia and the Middle East. Its $16m investment in the Malaysian food processor is apparently “in line with BRF’s strategy… to strengthen its focus in Muslim markets,​” the company said in a statement on 9 September.

BRF Foods will hold a 70% stake in FFP, while FFM Berhad will retain the remaining 30% share.

FFP, hitherto a wholly-owned subsidiary of FFM Berhad, produces 250 tonnes of frozen sausages, chicken nuggets and burgers per month, alongside some vegetarian items. The food products are sold under two brands in Malaysia: Marina and Seri Murni.

Global expansion targeted

FFM Berhad is involved in wheat production and food processing and is a subsidiary of PPB Group Berhad, a Southeast Asian outfit with operations in food and agriculture, waste management, property and entertainment. PPB Group Berhad reported revenue of over $500,000 for the first six months of 2016 up to 30 June, a rise of 11% compared with last year.

BRF profits for the second quarter of 2016​, ending 30 June, dropped by 24% to R$1.9bn ($577m) when compared to Q2 2015.

Part of the fall in profits has been attributed to a large expansion strategy that has seen the business pump over R$795 ($241m) into a slate of global ventures, including the acquisition of Oman’s AFX.

BRF also plans to spin-off its halal operations​ to create a single company solely focused on producing meat for the Muslim food market, expected to grow by 5.8% by 2020, according to the Dubai Islamic Economy Development Centre.

FFM Berhad was not available to comment on the acquisition as Monday 12 September is a public holiday for Malaysia, which is celebrating the Islamic festival of Eid.

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