NOBULL: Mexico: SuKarne’s success resides in vertical integration model — Processing plant is next to the fee dlot

Mexico: SuKarne’s success resides in vertical integration model, thriving middle class

By Andre Sulluchuco on 9/25/2013

SuKarne’s vertical integration model allows for process control from cattle purchasing to beef distribution, the company said in a press release. The strategy cuts costs while improving quality and has helped SuKarne become the fifth largest grain-fed beef supplier in North America.

As a result, SuKarne has seen a 20 percent growth rate for the past two decades and sales exceeding US$2.1 billion and exports of US$700 million.

The Mexican beef processor has exponentially grown from its home base in the Méxican state of Culiacán, state of Sinaloa.

The company’s Integrated Meat Production Unit serves as the model for the entire operation that includes five facilities in Mexico and one in Nicaragua. Every piece of beef in the production chain is traced back to one of these locations.

“It’s difficult for competitors to follow the SuKarne model because we have the processing plant next to the feedlot,” Jesus Vizcarra Calderon, chairman of the company, said in a press release. “This cuts transportation costs and reduces stress on the animals, which improves the quality of the meat”, he added.

Earlier this month, the company signed a syndicated loan agreement for US$450 million with a consortium of international banks to strengthen the company’s international growth, expansion and export strategies.

Founded in 1969, SuKarne is the fifth largest beef supplier in North America. The company accounts for 75 percent of Mexico’s meat imports and is the leading supplier for national supermarkets. The company also had annual sales over US$2.1 billion and exports of US$700 million.