March 9, 2011

Grupo Frangos Cancao to Construct New Poultry Facilities in Parana

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

After receiving a new R$ 15 million line of credit from the Southern Development Bank, the poultry producing company Grupo Frangos Cacao announced that they will construct 50 new chicken producing facilities in Parana in 2011. The interest rate on the line of credit is 6.75% and there is a ten year payoff period for the loan. These subsidized interest rates through Brazilian government banks such as the Southern Development Bank or the National Development Bank are significantly lower than what could be obtained from the private sector.

Each of the new 50 facilities will be 150 meters by 15.3 meters and will house 36,000 chickens. The facilities will be totally automated with climate control systems to improve the comfort of the chickens. The company feels the new facilities will reduce mortality to 2% which is half the mortality rate (4%) common in their older facilities. The new facilities will be constructed on proprieties where they have existing facilities. Each new facility will cost approximately R$ 300,000.