Sigma Alimentos, Bar-S Foods synergies fuel new entity

by Bryan Salvage
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MONTERREY, MEXICO — Early in September, Mexican diversified food processor Sigma Alimentos, a division of ALFA, S.A.B., de C.V., acquired Phoenix-based Bar-S Foods. Armando Garza Sada, chairman of the board for ALFA, said at the time that the acquisition would allow Sigma to become a meaningful player in the US refrigerated processed meats market by targeting the US Hispanic market.

Bar-S Foods processes and markets processed meats throughout the US. The company operates three production plants and one distribution center in Oklahoma. Its product line includes franks, lunchmeats, bacon, dinner sausages and corn dogs, all sold under the Bar-S brand. In 2009, Bar-S posted sales of $535 million and employed more than 1,600 people.

Sigma Alimentos’ core business is in the Mexican refrigerated food segment. Besides Mexico, Sigma is present in the US Hispanic market, South and Central America and the Caribbean. It operates 31 facilities and 144 distribution centers with product offerings of processed meats, cheese, yogurt and other refrigerated products. In 2009, Sigma reported sales of $2,186 million and employed more than 30,000 people.

MEATPOULTRY.com recently contacted Bar-S to learn how the merger came about and how the integration was proceeeding. “A few months ago, Sigma learned that Bar-S´ shareholders were interested in a possible merger. After exploring the possible synergies, both companies decided to move forward with the combination,” a company spokesman said.

The new enterprise will build upon an already strong foundation, the spokesman continued. “Important synergies will be attained in terms of a stronger market leadership, broader and more efficient coverage of the market, supply chain optimization and the combination of Bar-S operational efficiencies with Sigma’s technological and R&D capabilities,” the spokesman added.

“While we are in the process of deciding upon the name of the new company, the relevant factor is that current brand names will remain in place, recognizing the great value they represent. No major changes are expected [in current Bar-S staffing],” the spokesman said.

There will be a unified management team, comprised of Sigma and Bar-S key executive positions, the spokesman continued. The team will focus on maintaining the existing cost discipline and improve excellent execution capabilities in areas such as business plan implementation, new product introduction and supply-chain optimization.

Tim Day, current chairman and CEO of Bar-S, has been appointed chairman and CEO of the combined entity, reporting to a newly formed board of directors comprised of executives from both companies. Sergio Ramos, former Sigma’s International Business vice president, will head the Project Management Office and will be in charge of the post-merger integration process. Bob Kopriva will remain as senior advisor to the CEO and the Project Management Office.

Looking forward, the spokesman said, “Customers can expect the same level of quality and service they have always had. This merger will only improve the enterprise’s ability to deliver superior customer service.”

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