Cargill concluded the acquisition of Unilever's tomato product business in Brazil. The R$600 million deal was signed in September last year. The transaction is part of the company's strategy to keep expanding its presence in Brazilian retail.
The deal will help Cargill diversify its product portfolio in the food sector, including solid, well known brands such as Pomarola and Tarantella brand tomato sauce, Elefante and Extratomato brand tomato paste, and Pomodoro brand tomato pulp, and add to Cargill's operations the tomato processing plant based in Goiânia, state of Goiás.
According to Nielsen data, the Brazilian market for tomato products grew 16.2 percent from 2007 to 2010. "We believe that as Brazil keeps growing, the domestic market will become increasingly robust, and a larger number of consumers will try new food products," says Sérgio Rial, Cargill's senior vice president and regional director for Latin America. According to Rial, "Cargill's entrance into the tomato products market will bring it closer to the lives of Brazilian consumers and to its customers in the retail segment, who will now count on Cargill's fuller range of quality products."
According to Marcelo Martins, Cargill's CEO in Brazil and leader of the Cargill Foods Brazil Business Unit the area in charge of consumer products, "the decision to enter the tomato products business was based on some criteria, such as the acquisition of solid brands that will help us gain more volume in Brazilian retail and, consequently, to expand our portfolio with well-respected brands that supplement the range of Cargill products the public is already familiar with, such as those of the Liza, Purilev, Mazola, and other brands."
With the new acquisition, Cargill plans to expand the Foods Brazil Business Unit. "Tomato products, such as sauces and pastes, are the seventh most important category in non-perishable food products. They have high penetration in households (70 percent) and a high purchase frequency. Considering that oils are the second most important category, Cargill is now present in two key Brazilian consumer food categories," explains Rubens Pereira, general manager of the Cargill Foods Brazil Business Unit.
Based in Goiânia, state of Goiás, the tomato processing plant employs about 800 people directly involved in this business, who have all been transferred to Cargill. Additionally, the company hired another 120 people nationwide to support the new operation involving tomato products as well as other consumer products.