Volcafe Buys Custodio Forzza to Double Brazilian Coffee Exports

  • Forzza takeover to boost Volcafe's exports to 2.5 million bags
  • Volcafe to expand into Brazil's domestic market with buyout

Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd., bought Brazilian exporter Custodio Forzza Comercio e Exportacao Ltda. to more than double its shipments from the world’s largest producer.

The takeover will allow Volcafe to export as many as 2.5 million bags of Brazilian beans a year from 1 million bags now, said Trishul Mandana, managing director of the Winterthur, Switzerland-based coffee trader. It will also open doors to the domestic market in Brazil, the second-largest coffee consumer, because Forzza already supplies local roasters.

"Forzza is complementary to our activities and it will allow us to double the size of our business in Brazil," Mandana said in an interview at ED&F Man’s headquarters in London. "We will be in the top five or six largest exporters."

Volcafe’s deal will increase competition with rivals including Olam International Ltd. and Louis Dreyfus Commodities BV, which shipped 2.3 million bags and 1.8 million bags of Brazilian coffee respectively from January to November, according to data compiled by Rio de Janeiro-based broker Flavour Coffee. It also allows the company to start supplying Brazil’s domestic market, which consumes mostly robusta.

Arabica Coffee

Forzza’s trading is focused on lower-quality arabica beans from the Rio Minas group and Brazilian robusta beans, known as conillons, Mandana said. Volcafe’s strength lies in exports of beans of fine and good cups, making the two companies complementary, he said. Arabica is favored for specialty drinks such as those made by Starbucks Corp. and robusta beans are used in instant coffee.

Volcafe’s acquisition includes Forzza’s three milling assets in Colatina, Itabela and Linhares, as well as a trading office in Vitoria, Mandana said. Bruno Forzza Sarcinelli joined Volcafe in October and will be commercial director for the lower-quality arabica and robusta beans in Brazil. Florian Gollucke will have the same responsibility for finer qualities.

"We expect that most Forzza employees will become Volcafe employees under the arrangement," Mandana said.

Nicolas Rueda will become managing director for Volcafe’s Brazil office alongside his current role as head of South America, according to Mandana. He replaces Urs Wegman, who retires as managing director this month and will continue with the group reporting to Mandana.

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