Author: Anita Hawser

INDUSTRIAS BACHOCO: POULTRY PRODUCER OFFERS PROTECTION IN TROUBLED MARKET

By Anita Hawser

In times of uncertainty investors often turn to so-called defensive stocks, and Mexico poultry producer Industrias Bachoco is certainly that.

Despite other problems that may be going on in Mexico, consumers have not stopped eating chicken. Accounting for approximately a third of the chicken production in Mexico, Celaya, Guanajuato–based Bachoco is a popular choice among stock pickers. The company has a reputation for paying attractive dividends, and investors also believe it has considerable potential upside because the company is behind an investigation by Mexican authorities into US companies allegedly dumping cheap poultry on the local market in breach of free-trade agreements.

Bachoco is the largest poultry company in Mexico, with extensive production facilities spread across the country. Its main business lines are chicken, eggs, “balanced feed” and swine, and it prides itself on its vertically integrated operations. The company’s shares are listed on the Mexican stock exchange and NYSE.

Late last year Bachoco received a Food Quality Award from the  National Food and Agricultural Council, which is regarded as the most prized award for companies in the industry. In the same year, it reported a gross profit of 5.3 billion pesos ($441 million), compared with 4 billion pesos in 2009, based on the strong performance of its core businesses.

The company started life in 1952 as an egg producer in Sonora. It went public in 1997, having spent the intervening years expanding its business and its production facilities across the country.