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The objective of the work was to accomplish a study of conduct and managerial acting and to
identify competitive strategies in innovative companies of the chicken agribusinness in Paraná. The
poultry industry, as an industrial process, appeared in the end of the sixties and it started to
constitute the principal segment of the meat processing industry, in function of the installation of
great oligopoly and integrated companies in the late seventies. The import of the process technology
allowed for vertical integration. In 1990, Paraná poultry system was composed by 14 companies. At
the present time more than 30 companies are operating. Among the companies initially contacted to
participate in the experiment, there was the return of four questionnaires. The pattern of similar
conduct for the companies in the chicken agribusiness system indicates that, in the present stage,
growing integration still implicates scale gains, providing growing national and international
competitiveness. But the strategy seems to have reached a saturation degree because the prices have
been presenting a declining trend.
1 Competitiveness and Agribusiness managerial conduct have been altering in function of the
crisis of traditional mechanisms of agricultural politics,
Haguenauer (1986) defines industrial complex as a group of markets deregulation and of the formation of
of industries whose dynamics is governed by common economical blocks.
factors, constituting segments of a same productive chain
or of interdependent chains, that converge to the same Competitiveness is conquered, at first, at the level of
market. In agribusiness an industrial complex involves the individual company and later at the sector level. At
the production of food, fibers and biomass. It is the microeconomic level, the company takes strategic
characterized as the sum of all the production and decisions seeking to reach profitability goals, growth of
distribution operations of agricultural supplies, including the firm and shares of national and international markets.
from production, processing and storage in the These decisions will affect industry level competitiveness
agricultural units to processing and distribution of the According to JANK (1996: 14-15) Competitiveness is
final product. The agribusiness practices and the forms of influenced by available technology, efficiency of its use,
domestic prices, production inputs, exchange rates and
parity, distance of export markets, the port and transport solution of characteristic distributive problems of the
costs, structure of incentives and subsidies, tariff and economical relationships. (JANK,1996)
non-tariff barriers, quality and image of the product and
consumers' taste. Industrial competitiveness is related to
competition, efficiency, productivity and technological
maturity. 2. Poultry agro-industrial complex
The roots of the studies of competitiveness are in the The poultry industry, as an industrial process, appeared
approach of relative advantages. The relative prices of the in the end of the sixties and it started to constitute the
production factors are influenced by the differences in the principal segment of the meat processing industry, in
endowments of factors and together with available function of the installation of great oligopoly and
technology, scale savings, consumption patterns and integrated companies in the late seventies. The import of
market structure they affect the international flows of the process technology allowed for vertical integration,
goods. The approach of competitiveness includes the the production of complementary activities to slaughter
analysis of the conduct - price, quality, supply regularity and the contractual scheme of birds creation close to the
and innovation -, of the competition patterns happening poultry producers. Such initiatives with the increase of
simultaneously in the same industry sector - and of the the price of the bovine meat - Brazilian production of
firm performance in an united way. meat of birds using imported technology , both for the
genetics and to the productive process - allowed the
At the level of the firm, the generic strategies for displacement of the bovine meat.
obtaining competitive advantages are: leadership in costs
(use of scale savings, curves of experience, control of Several factors contributed so that the consumption of
fixed costs) and leadership in differentiation (quality chicken meat reached 40% of the total consumption of
noticed by the consumers, use of marks, barriers to the meats in Brazil. The growth of supply and the diffusion
entrance in general) (Porter, 1980) The competitive of the consumption were fruits of the amplification of the
advantages conquered at the level of the firm affect the scale, of the incorporation of technological innovations in
competitive forces that determine the structural the productive chain, of the reduction in costs and prices,
attractiveness in the long period of a sector, as the of the creation of varieties of products with greater
intensity of the capitalist rivalry, the threat of new diffusion potential and of the amplification of the urban
comers, the substitutes' threats, the negotiation power markets. (Rizzi, 1999)
with buyers and the negotiation power with the suppliers.
Most of the case studies do not allow for generalizations, The Brazilian industry of chicken meat grew and there
but they reinforce the idea that permanent or absolute was the integration in the inter-regional division of the
competitive vantage does not exist. work in several areas - insertion of the South region and
of São Paulo, although other states have increased the
According to JANK (1996, p.23), there are three basic participation in the industry but with smaller plants,
determinants of the structure and organization of the focused in regional markets. In Paraná, companies
agribusiness systems: "a) internal factors to the company created in the seventies, acted almost exclusively in the
(strategies, capacities and human resources); b) structural chicken meat segment.
factors (revenues, productivity, quality, relationships
among the segments) and c) systemic factors The expansion of soybeans culture of and of the
(macroeconomic, political, institutional, regulatory, of installation of the oleaginous industry facilitated the
infrastructure and international)". To this author, the concentrated implantation of the poultry industry in the
competitiveness of the different agri-food chains depends South region and São Paulo. The states of the south are
basically on the maintenance of structural advantages and the main producers of corn, responding for approximately
of internal competencies for each company. 50% of the national production, being Paraná the largest
producer. For Rizzi(1999) there were favorable
In the institutional focus, the issue of the conditions that in conjunction with public policies of
competitiveness of the agribusiness is innovative because incentives to the implantation of industries, induced the
organizations and institutions can contribute in the combination of several complementary activities of the
generation and maintenance of the competitive productive chain of the meats complex. The poultry
advantages. The productive efficiency is correlated to the industry grew linked to the expansion of the soy cultures
managerial capacity in reducing the transaction costs and and corn, allowing the transformation of vegetable
to make appropriate contracts. The organization should protein in animal protein.
be capable to coordinate the countless agents' specialized
work so that one information flows in a fast and efficient The process of vertical integration of the production of
way for the constituent segments and allows for the soy bran and of mixtures is adopted in the leader
companies. The growth of the poultry industry in the the technological evolution was of sanitary order and
South region was fruit of the association of the regional there were hygiene practices dissemination and the
characteristics where the great integrated companies development of vaccines and prophylaxis techniques. In
settled: the land structure based mainly on small the decade of 70, the introduction of linear programming
agricultural establishments allowed for the integration of allows technological progresses in the area of animal
the poultry producers. Such fact attracted investments in nutrition. In the decade of 80, the progresses happened in
the area of birds slaughtering, and the great companies the techniques of poultry handling, through facilities and
started to integrate vertically in almost all the linked equipment - developed in mechanical and engineering. In
activities to slaughter. The leader companies in the the decade of 90, the transformations were from
industry produce from the matrix and one day chicks for environmental nature to the level of the great producing
cut, to mixtures, the slaughtering and the distribution of markets, involving environmental control and climate
the products, besides the technical assistance to those adaptation of the birds. Starting from 2000, the
integrated. transformations will happen in the area of marketing
administration, involving growing differentiation and
In the eighties there were qualitative changes in the quality of the product (Schorr apud Coelho & Borges,
productive process of the poultry industry: the 1999). There is no technological discontinuity, so the
acceleration of incorporation of technologies at the level barriers to the entrance are small, but the value
of the slaughtering of birds, with larger automation immobilized in investments is very high (Rizzi, 1999)
degrees and the introduction of new types of machines
and equipment, linked to the subsequent stages to the The introduction of the chicken in parts, of noble cuts
slaughtering, in other words, the processing of cut out and the expansion of industrialized products was
products and industrialized, associated to the innovation important in the technological restructuring of the great
of products. The development of new products in the Brazilian companies, but the internal consumption is
leader companies' strategies aimed at attending to the small. The Brazilian consumer prefers the whole chicken.
segmented market: The cuts of more sophisticated and industrialized
chickens are produced by great companies, focused in the
“the slaughtered chicken sold as a whole or the export market because the volume consumed internally is
carcass without feet, without head, etc.; the chicken cut small, although presenting a growing tendency.
out with bone and boned; industrialized and emulsified
products (sausages); industrialized and restructured In the production of noble products there is the
products (hamburger, nuggets, meatballs, sausages); and prevalence of the great companies and the barriers to
the battered products, pre-cooked and frozen parts (thighs entrance grow, in function of the expenses in research of
and chests). The segmentation of the market of chicken new products, in the popularization of the brands and in
meat allows for distinguishing different forms of the high investment for facilities and equipment. There
competition in the industry in each product line – related are demands such as optimization of quality of the
to technology, prices and differentiation of products etc. -, carcasses of the chickens to obtain processed food with
and to observe the tendencies of the markets, the quality, heavier and older birds that increase the demand
strategies of the companies and the correspondent of investments in relation to environment, nutrition,
consolidation of leadership and the changes also extend handling and facilities and high investments inside of the
to the industrial processing, with larger elaboration of gate or at birds production level. The releases of new
cuts and automation in several stages of the process. industrialized products and of new packages are part of
(Rizzi,1999,p.7) the strategy of the leaders' differentiation, that transform
the poultry, bovine and pork meats. According to Schorr
Significant barriers to entrance do not exist in respect (apud Coelho & Borges, 1999), in agreement with the
of process technologies. The available technology in the table 1, the companies can occupy different positions in
market allows the installation of firms with differentiated the agribusiness poultry system.
plants, whose size depends on the dimension of the
market, of the financial capacity and of the knowledge of The productive transformations in the supply side and
the activity. the growth of the demand for meat in the last thirty years,
stimulated the production of chickens and eggs, whose
In historical terms, the technological evolution of the rhythm overcame the rate of the other sectors. Figure 1
poultry culture in the decades of 50/60 was of genetic presents the evolution of the consumption of chicken
nature, favoring the development of crossings and meat in several countries and it allows for the
appearances of species of hybrid birds. Between 1960/70, verification of its dissemination degree.
12000
10000
1994
8000 1995
1996
1998
4000
2000
0
USA China Brazil Mexico Japan England Spain Russia
Country
The growth of the number of matrices happened in Paraná, Rio Grande do Sul and Minas Gerais. The
an intense way, as displayed in figure 2. Space only state that presented continuous growth of the
distribution did not happen in a concentrated way production of cut chicks in the period 1981/95 was
throughout the country, as displayed in figure 3. The Paraná. Although data are not shown, lately there has
largest producers are: São Paulo, Santa Catarina, been an inversion in the growth tendency in function
of the American and European protection pressures and of the exchange valorization till January 1999.
25 , 000 0
20 , 000 0
15 , 000 0
10 , 000 0
5, 0 00 0
0, 0 00 0
81 82 86 84 85 86 87 88 89 90 91 92 93 94 95 96
year
The international competitiveness of the companies was the fall in production costs. A comparative analysis
can be inferred starting from the expansion of internal of the table 2 reveals that the Brazilian producers had
production and of sales for the external market. Figure 4 comparative advantages of costs in face of competitors.
shows internal disponibility and growth in exportation up
to 1998.
One of the responsible factors for the transformation
Others
1995
Ceará
1991
Pernambuco
1986
Minas Gerais
1981
Rio Garnde do Sul
Paraná
Santa Catarina
São Paulo
4500,0
4000,0
Export
3500,0
3000,0
Internal
Disponibility
2500,0
2000,0
1500,0
1000,0
500,0
0,0
81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98
A no
600
1994
500 1995
400 1996
Ton
300
1997
1998
200
100
0
audi Arabia J apan HongKong Argentine Arabian Singapure Kwait Spain Russia German Total
Emirades
Country
Source: Coelho&Borges(1999)
3. Poultry System in Paraná: A Brief the chicken (whole and pieces) . Intermediate phases
Exploratory Study can be manual, semiautomatic and automated; the
companies present several automation degrees in the
intermediate stages. One of the companies just presents
In 1990, Paraná poultry system was composed by 14
90% of the automated productive process. There is
companies. At the present time more than 30
heterogeneity of technologies that allows for the
companies are operating. Among the companies
coexistence of different types of companies in the
initially contacted to participate in the experiment,
market and all the farms accomplished significant
there was the return of four questionnaires, but some
investments in the last four years in expansion of the
questions were not answered, with the allegation that
capacity and industrial automation.
there would be the popularization of confidential data.
The degree of integration of the farms is also
The exploratory study discusses the information of four
heterogeneous inside Paraná, according to the table 3.
companies of medium load: two of the north of the
The companies of the North present an integration
state and two companies of the west. The four
pattern more homogenized. Only the genetic material
companies had annual turnovers between R$10 million
is imported and the companies try to use mixed
and R$100 million. Due to sector particularities, the
lineages; the most used are those leaders in the world
farms use an average of 400 direct employees and 1200
market, such as, Ross, Cobb, ISA, Hubbard and
workers direct and indirectly, through integrated
Embrapa. In performance terms, only one of the farms
producers. The medium capacity of the
supplied the information, the others they alleged
slaughterhouses is superior to 8000 chicken/hour.
confidentiality. The performance parameters were:
The main productive stages are: hanging, bleeding,
beginning and final of the reproduction age in weeks
defeathering, finishing, opening of the chicken,
of the females, eggs /female, incubated eggs (% of
evisceration table, cleaning, spill-chiller and packing.
use), cracking and chicks by female are coherent with
The first stages are manual, as well as the packing of
parameters of high international competitiveness.
Table 3 - Degree of Integration in the Aviculture of the North of Paraná - 2000
1 2 3 4 1 2 3 4
GENETIC MATERIAL N N N Y 1,2,3 Y Y N N
AVIARIES FOR MATRICES Y Y N Y
INCUBATORS Y Y N Y
MIXTURES Y Y Y Y
FEEDING OF CHICKS Y Y N Y 60% acquired out
SLAUGHTERHOUSE Y Y Y Y
CUTS AND INDUSTRIALIZATION Y Y Y Y
DISTRIBUTION Y Y N Y
MARKET N Y N Y
minimization, associated with strategies of differentiation
The mix of marketed products of the companies of the product.
involves the whole chicken - commodity of low final Although the companies present satisfactory
price - and cut out chicken. Company 1 presents better performance, there is constant concern with the
technological and competitive indicators and maintenance of those indexes. The concern is expressed
industrializes sausage and rejections; company 2 only in the investments in the technological capability
markets cut out; company 3 markets 90% of the chicken imported from of suppliers, that is, out of the company.
cut out at regional and national market; and company 4 The sources of technological changes in product, process
presents the largest automation degree and its market mix and raw material are the following ones: Company 1 - it
is composed of 34% of whole chicken and 60% cut out. imports matrices of the exterior, it accomplishes R&D in
The companies worry a lot out about the “out of the gate” the company, it looks for Brazilian market customers'
phase, because most of the problems inside of the gate are suggestions; Company 2 - it imports matrices of the
already under control. exterior, it looks for Brazilian market customers'
Although in other areas of the country the companies suggestions and of the international market, institutes of
are making alliances, growth strategies such as sale of researches and universities in Brazil, research and
bondss, associations, coalitions, were not implemented in development in the company; Company 3, does not
the companies of the sample. Table 4 presents the most look for innovations, but it imports matrices of the
common strategies. Given the high competition through exterior.
price in the sector, the companies operate so much at the
internal market, as in the external with strategies of cost
Strategy for Growth (Y) (N) Which is the cause of the strategy?
1 2 3 1 2 3
Sale of part of the capital of the N N N (1) profit losses;
company
Acquisition of another company N N N (2) capital needed
Sale of part of the company N N N (3) little integrated;
Association N N N (4) diversification needed;
Cost minimization/ price war Y Y(2) Y
Diversification Y Y(4) Y
Export Y Y(4) Y
Marketing Y N N
R&D Y Y N
Product quality Y Y Y