Industrias Bachoco, S.A.B. de C.V. engages in breeding, processing, and marketing poultry (chicken and eggs), swine, and other products (primarily balanced animal feed). The company participates in the food industry in Mexico and in the U.S., primarily in the poultry industry. It also produces and sells a range of other products that include production and selling of balanced feed, live swine, beef and turkey value-added products. The company also operates a laboratory that produces vaccines for the poultry industry, as well as other similar industries. Chicken Products The company offers chicken products in six major categories, such as live, public market, rotisserie, supermarket broiler, chicken parts, and value-added products. Live chicken is sold alive to small independent slaughtering operations or to wholesalers that contract with independent slaughtering operations for processing. Public market chicken is a whole broiler presented either un-eviscerated or eviscerated, sold within 48 hours after slaughter. This product is sold to consumers without any packaging or brand identification. Rotisserie chicken is a whole broiler presented eviscerated and ready to cook. Supermarket chicken is a fresh whole broiler presented with the edible viscera packed separately. Chicken cuts refers to cut-up fresh chicken parts sold wrapped in trays or in bulk principally to supermarket chains, the fast-food industry, and other institutional food service providers. Value-added products refer primarily to cut-up fresh chicken parts with value-added treatment, such as marinating, breading, and individual quantity frozen. Egg Products Table eggs in Mexico are classified in three main categories: bulk, packaged and processed. The company participates in the bulk and packaged categories of eggs but does not participate in the processed market. It sells both brown and white eggs. Bulk: Bulk is distributed in large 360 egg cases. Packaged: Packaged in branded packages of mainly 12, 18, 24 or more eggs. Processed: Processed is liquid or powdery eggs used primarily by the bakery industry. Feed Products The company participates in both channels, integrated and commercial, as it produces balanced feed used for internal consumption, as well as balanced feed it ultimately sells to third parties. Marketing Channels Marketing and Distribution of Chicken Products in Mexico Live Chicken: Mexico has a marketing channel of live chicken, which primarily operates in the central and southern regions of Mexico. Wholesalers: The major products marketed in this channel are live and public market chicken, as well as rotisserie. Institutional: The company sells a large amount of product to institutional customers. It primarily sells chicken cuts and rotisserie chicken in the institutional channel. Supermarket: The company sells cuts and value-added products, as well as supermarket chicken types through supermarket channels or convenience stores. Retail: A range of products are sold under this marketing channel that goes from the live chicken to value-added or public market and supermarket chicken type. The company supplies various points of sale that directly sell these products to the customers. Marketing and Distribution of Chicken Products in the U.S. The company’s U.S. operations, which lie across the River Valley area in Arkansas and Oklahoma produce chicken products. Those plants primarily supply grocery retailers, food service distributors, national accounts, and commodity customers throughout the U.S. The U.S. complex also services the foreign market and exports to various countries, including various Asian countries, the Russian Federation, and Mexico. The company’s distribution line through this plant is handled mainly through third parties. Marketing and Distribution of Eggs Products in Mexico Wholesalers: The company sells eggs in bulk to wholesalers that operate primarily in central Mexico. Institutional: The company sells eggs in bulk in this institutional marketing channel. Supermarket: The company sells eggs packaged with brand identification and various presentation patterns in packages of 12, 18, 24, or more eggs. Retail: The company distributes eggs directly to customers in packages with brand identification. Marketing and Distribution of Balanced Feed in Mexico The company’s production of balanced feed to third parties accounts for a range of products. The company produces balanced feed products mainly in the poultry industry, and also produces in other markets, such as dogs, cattle, swine, and fish, among other species. The company sells balanced feed products primarily to small livestock producers and through a network of small distributors located primarily in central and southern Mexico. It has four feed plants dedicated to producing balanced feed to third parties. Patents, Licenses and Other Contracts The company owns the rights to a range of brands that it uses to market its products. These rights are renewed every 10 years. Seasonality Effects The company’s sales are moderately seasonal in Mexico. Generally, it experiences the highest levels of sales in the second and fourth quarters (year ending December 2015) due to higher chicken consumption during the holiday seasons. As for its sales in the U.S., there is slightly less seasonality due to the mix of products offered in the market, and breast meat prices are higher in the second and third quarters and wings are more in demand in the fourth and first quarters. Government Regulations Antitrust Regulations: In Mexico, the Ley Federal de Competencia Economica (Mexican Economic Competition Law) regulates monopolies and monopolistic practices. Under this law, Mexican producers, including the company is required to notify the Comision Federal de Competencia Economica (Competition Federal Commission) of all proposed transactions exceeding specified threshold amounts as set forth in the Mexican Economic Competition Law. History Industrias Bachoco, S.A.B. de C.V. was founded in 1952. The company was incorporated in 1980 as a variable capital corporation (sociedad anonima de capital variable) under the laws of Mexico.
industrias bachoco-ser b
(BACHOCOB:Mexico Stock Exchange)
Avenida Tecnologico No. 401
Celaya, GJ 38010
Phone: 52 461 618 3500
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