Brazilian food processor BRF CEO resigns as stock plummets

The logo of the meat processing company BRF SA in Fortaleza, Brazil on January 10, 2019. REUTERS/Paulo Whitaker

SAO PAULO (Reuters) – Brazilian food processor BRF SA (BRFS3.SA) announced on Tuesday that chief executive Lorivar Luz has stepped down and will be replaced by beef packer Marfrig Global Foods SA (MRFG3). announced the appointment of Miguel Glarte as CEO. .SA).

Poultry and pork processor shares rose about 6% in early trading in Sao Paulo, but closed 1.10% lower at 16.19 reais ($3.17) as BRF investors digested the news. .

A BTG Pactual analyst wrote in a note to clients: “Miguel Gralte is, to some degree, a beef guy.

Whether he can reposition the BRF to face stiff competition in Brazil is an open question. “These are very different industries that require different sets of skills,” BTG said, comparing beef processing to pork and poultry processors.

BRF said the move did not reflect an intention to merge the two companies, although the market had speculated that for some time.

Marfrig, which owns 33.27% of BRF, previously said it was only interested in passive shares in BRF.

However, BTG analysts see Gularte’s appointment as “another sign of how effectively Marfrig is controlling and influencing the operations of the BRF.”

In a memo, XP analysts said Gularte’s appointment was “unexpected” and also highlighted the fact that his experience comes from the beef division.

Still, XP believes Gularte “should be able to make the BRF more agile and remove the nasty inertia that has caused the BRF to lose opportunities in the past.”

BRF, owner of famous Brazilian brands Sadia and Perdigao, has been reeling from high-cost inflation and accounts for most of its sales in the domestic market.

Unlike rivals JBS SA (JBSS3.SA) and Marfrig, BRF does not process cattle and has factories in countries such as the United States.

Gularte was Marfrig’s Chief Executive Officer until today’s announcement.

Marfrig, whose shares fell 3.78% after Tuesday’s bell, named Rui Mendonca as its new South American CEO to replace Gularte.

($1 = 5.1134 reais)

Reporting by Gabriel Araujo and Ana Mano. Edited by Kirsten Donovan and Jane Merriman

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