Page 44 - Minerva Foods | Annual Report 2017

Challenges and Opportunities
Operation Weak Meat and the accusation made by executives at one of the country’s largest meatpackers imposed a series of chal- lenges to the sector and created opportunities that Minerva was observing and prepared for. Due to the information being released at the time by the press, which generalized problems being found, it was necessary for the Company to take steps was to first, ensure its Brazilian and foreign investors that it was not part of the investigations. Second, to reveal the opportu- nities that had arisen. Case in point: exports to Egypt by one of the companies being inves- tigated were suspended because of the inves- tigations involving Brazilian companies, Min- erva decided to transfer part of what it was producing in Brazil over to Paraguay, therefore continuing shipments into Egypt. This mea- sure resulted in a higher profit margin for op- erations realized at the Company’s Paraguayan industrial park.
Afterwards, accusations by executives at Bra- zil’s largest meat buyer caused uncertainty in the market resulting in a 15% short-term drop in raw material prices. Within this context, Minerva expanded its capacity utilization and accessed new customers in Brazil and abroad, with an opportunity arising to purchase the competitor’s assets in Mercosul.
Technology
In the area of technology and innovation at Min- erva Foods, the keyword in 2017 was standardiza- tion. While the Company worked to integrate and expand its operations, actions were intensified to standardize processes, systems and methodologies, both in Brazil and in other Mercosul countries.
In this context, the Project to Standardize Material Descriptions (or PDM, its acronym in Portuguese) is highlighted within the area of Supplies. Minerva adopted modern and well know methodologies, aligned with the concept of strategic sourcing, through which specifications, the supplier market and other aspects involving sourcing of products and services are mapped and assessed in an effort to obtain a detailed analysis of the total cost of ac- quisition. Registration of materials was also stan- dardized, aimed at reducing unnecessary costs resulting from the same items being listed with dif- ferent descriptions. This work involved over 18,000 items in Brazil alone, where the process has been concluded. These changes are continuing through- out the 2018 year, in the other countries in which Minerva has operations.
44