Citrosuco and Citrovita negotiate integrating their operations
Valor Econômico
The Fischer and Votorantim groups are negotiating joining their operations in the segment of orange juice, in which they operate through the companies Citrosuco and Citrovita, respectively. Market insiders affirm there are conversations underway that they have had progress in the last two months. Asked, Citrovita said it makes no comments on market rumors and Citrosuco made no comments. Valor found out the plan involves the whole juice business of the companies, including plants, logistics structure, and orange crops in production or in development in the farms of both the companies. The land itself is not included in the package. The idea is to create a new company divided into equal parts by Fischer and Votorantim, even though, today, Citrovita is much smaller than Citrosuco and has to become bigger to have the same weight in the partnership.
Sources of the segment affirm the merger proposal came from Citrovita, and that there is no date set for the outcome of the negotiations, which could last up to one year - in spite of the fact that "some concepts" have already been agreed upon. The management the new company, which runs a serious risk of being vetoed by the Administrative Council for Economic Defense (Cade) even though the conversations keep on going steady, should be headed by Citrosuco.
Citrosuco is the second largest exporter of orange juice in the country, precisely ahead Citrovita. Together, they practically tie with Cutrale, traditional leader of the national and world rankings. Also strong in the country, French Louis Dreyfus Commodities completes the distinct group of the four major exporting industries. Brazil dominates more than 80% of the sum between the global exports of frozen and concentrated (FCOJ) and non-concentrated (NFC) product, which gains space since 2003.
Data of the Foreign Trade Secretariat (Secex) show that in 2009 the total exports of Cutrale between concentrated, non-concentrated juice and by-products amounted to US$ 673.3 million, 22% less than in 2008. Driven by juice and by-products, the shipments of Fischer Comércio, Indústria e Agricultura yielded US$ 551.1 million, an increase of 135.2%. In the case of Citrovita, there was US$ 125.2 million, a retraction of 26.1%.
The productive park of the segment is concentrated in São Paulo, where the industries have their own orange farms, their outsourced suppliers of the fruit for the production of juice and their processing plants. Of the 14 plants of the four companies located in the State, five belong to Cutrale, and the other companies have three units each. Citrosuco has plants in the São Paulo municipalities of Matão - the largest one in the country -, Limeira and Bebedouro, the former of which is shutdown. The units of Citrovita are located in the cities of Matão, Catanduva and Araras. Citrosuco also has a plant in the United States, where, for some years, Cutrale has two units, and Louis Dreyfus has one.
Besides, the companies have increased the investments in their export logistics structures in the past years, with ships and terminals in the main ports of markets like the USA, Europe and Asia. With the advance of the non-concentrated juice, which demand more space for transport, the investments in logistics had to be strengthened.