Stuggle for Latin American food industries

Eurofood, August 31, 2000

Despite a continuing economic recovery in Brazil, the food industry is failing to benefit with rising costs and falling prices stunting growth in the industry. Luiz Gonzaga Murat Junior, company finance director at Brazilian firm Sadia, the second largest food company in Brazil, said "we can't keep on producing and losing money". He went on to say that it was "frustrating to make such low profits". Current Sadia products are selling 3.14% lower than last year. Sadia has als announced that it has finally managed to sell its 50% stake in Lapa Alimentos, by spinning off the company. Lapa, a manufacturer of cake mixes, jelly and dry pasta has in the past generated small profits, but for the last two years has been losing money. Morat said that "since 1993 this partnership has never generated good results". Some products which carry the Sadia brand name have been sold off to a local food firm called Anaconda.

AND IN ECUADOR

Meanwhile in the South American country of Ecuador suffered an economic slump in 1999, which hindered the food industry in the region. The combination of unstable exchange rates and fierce competition from neighbouring countries such as Colombia, Chile and Argentina have all contributed to a shrinking of Ecuador's food processing sector, which diminished by 9% in 1999, according to a report from the USDA. In 1998, Ecuador had around 450 food companies with a total production of US$4bn (4.4bn [European Dollar]) which was around 20% of the nation's GDP. Ecuador's food processing industry is currently divided up into eleven sectors, including meats and seafood, baked goods, specialised foods, beverages, cooked food preparations and condiments and dairy products, amongst others.