Source: MEATINGPLACE, 10/25/11
 

Strong growth in domestic demand for Brazilian meat products has elevated the nation´s cold-storage business to new heights, pushing developers to build new refrigeration facilities at a rapid pace, said industry leader ArFrio during the first day of Brazil’s poultry processors union conference.

Though Brazil’s poultry producers and exporters suffered third quarter losses due to high input costs and a poor exchange rate, domestic demand has remained steadily strong in key metropolitan markets, and is growing rapidly with the emerging middle class in once poor areas of Brazil.

With that, demand for cold-storage facilities is growing from Brazil´s top meat processors that want to move and store product in these new target markets, said Renato Coelho da Fonseca Neto, commercial manager with ArFrio, a leading cold-storage company.

ArFrio has 10 facilities throughout Brazil, with three located at key ports in Itajai and Santos. Meat processors BRF Brasil Foods, Aurora, JBS SA, Marfrig, Sadia and Seara number among its top clients. Demand from meat-related clients grew 30 percent this year, Fonseca Neto said, and ArFrio expects that 30 percent growth rate to continue at least through 2012.

One of the cold-storage industry’s biggest challenges to keeping up with demand has been the rising cost, and waiting time, to build new facilities. A new ArFrio facility in Rio de Janeiro recently spent BRL30 million (US$17 million) on refrigeration machines and paneling alone, more costly than ever, Fonseca Neto said.

Those rising costs are attributed in part to strong demand for expansion throughout the cold-storage industry. But developers must also wait three to six months on air conditioning machinery orders, nearly 100 percent of which are bought from Italy and Germany, Fonseca Neto said. The European machines are strongly preferred to Brazilian-made ones because of quality issues, he said.

For more stories, go to www.meatingplace.com.