Latin America’s Role Over the Next Decade

By Sergio Nates, PhD
President, La Asociación Latino Americana de Plantas de Rendimiento

Established earlier this year, the Latin American rendering association, La Asociación Latino Americana de Plantas de Rendimiento (ALAPRE), is a private non-profit association governed by a board of directors from seven countries. Supported by several independent companies and four associations, ALAPRE’s existing members include Camara de Sub-productos Ganaderos (Argentina), Sindicato Nacional dos Coletores e Beneficiadores de Sub Produtos de Origem Animal (SINCOBESP) and Associacao Brasileira de Reciclagem Animal (Brazil), Scipem (Colombia), Prodeca (Costa Rica), Asociacion Nacional de Rendidores (Mexico), Agro Industrial Ganadera (Paraguay), and Mini Bruno (Venezuela). Headquarter offices are in San Jose, Costa Rica, and public activities are centered in Monterey, Mexico, and Sao Paulo, Brazil.

ALAPRE defined a strategic plan at its first meeting held in Sao Paulo in May 2012. Several working groups have been formed to engage in analysis, research, education, and outreach on pressing problems affecting the Latin American rendering industry. With an ultimate goal of promoting sustainable bio-recycling and food and feed safety, principally in Latin America but ultimately throughout the world, ALAPRE is planning to promote policies that enhance local and regional food security in ways that are economically worthwhile, socially ethical, and environmentally friendly.

The specific goals of ALAPRE members are:
• making production systems more sustainable;
• meeting increasingly stringent feed and food chain quality standards;
• developing a more ecological industry;
• managing water and energy resources more efficiently;
• maintaining an open trading system; and
• making better use of information and communication technologies.

The Rendering Industry in Latin America
It is estimated that by the end of 2012, the rendering industry in Brazil will reach a volume close to 3.5 million metric tons with exports of less than two percent. The rendering industry in Brazil consists of 512 registered plants under federal inspection; among those, meat packers and recyclers comprise the largest segment. A group of 35 animal by-product recyclers makes up SINCOBESP, an organization dedicated to teach, certify, and lobby with the government. About 34 percent of the industry, or 169 plants, are independent processors with 343 integrated to slaughterhouses. Slaughterhouses with integrated fat rendering operations produce 60 percent of the country’s bovine fat. Biodiesel production focused on animal fat is concentrated in four states: Sao Paulo, Mato Grosso, MatoGrosso do Sul, and Rondônia.

Forty companies registered with Servicio Nacional de Salud Animal represent the rendering industry in Argentina, with about 60 percent of the production concentrated among five companies. Other plants include poultry operations. Similar to Brazil, a significant number of small plants exist without any type of registration. In 2011, the production of meals and fats from animal residues reached 800,000 metric tons.

The processing of animal by-products in Colombia is relatively new (less than 20 years), except for a couple of companies that started in the early 1970s. Animal by-product statistics don’t match the number of animals slaughtered, indicating there is a good amount of raw material ending up in landfills. Indeed, in the beef sector, a common practice is to incinerate the material/bones. Most of the equipment being used in Colombia’s rendering operations was imported from Brazil, the United States (US), or manufactured by a couple of local companies. According to the Instituto Colombiano Agropecuario, there are 75 registered plants and around 30 to 40 without registration. Plants have little automation, with daily processing capacities varying from 20 metric tons to 200 metric tons. About 80 percent of the poultry meal is processed by vertically integrated slaughterhouses, with estimated annual production in 2011 at 64,000 metric tons of poultry by-product meal (feather meal, blood, viscera meal); 22,200 metric tons of avian origin oils; 12,300 metric tons of fish meal; 5,200 metric tons of fish oil; and 15,600 metric tons of meat and bone meal and ruminant blood meal.

Chile’s animal health status is unique in the hemisphere and quite exceptional internationally. Chile is free from all major animal diseases, including bovine spongiform encephalopathy (BSE) and avian influenza. Chile’s rendering industry is comprised of 47 rendering plants, of which 30 are fish meal operations. In very recent news, Salmofood S.A., which controls over 10 percent of the fish meal production in Chile, was sold to Alicorp of Peru.

In Mexico, 16 million animals are slaughtered each year, including sheep, goats, horses, and cattle. In addition, a total of 750 million chickens and turkeys are slaughtered each year. About 64 rendering plants obtain products from municipal and federally inspected slaughterhouses. There are two categories of rendering plants in Mexico, according to Senasica (animal health care authority): one in which rendering operations specifically render ruminant raw materials (category 2) and a second one (category 1) that specifies raw materials are free of ruminant material. Of the 64 rendering plants registered, 39 plants are category 2 and 25 are category 1. Plants are distributed throughout the entire country.

Costa Rica´s rendering industry, which has seven operating plants, is not as developed with the latest technology such as continuous cookers and dryers as in the United States, Canada, or Brazil. However, there are two companies evolving to use technology implemented in more developed rendering industries. Prodeca, a member of ALAPRE, processes beef and hog by-products to produce meat and bone meal for animal consumption. Rendering plants in Costa Rica have the capacity to process at least 50 metric tons per day.

The concept of rendering in Costa Rica is still considered a necessity and not a business. Most of the country’s finished products are consumed locally except for a small bit of tallow that is exported to Nicaragua. Costa Rica’s health status according to World Organization for Animal Health, or OIE, is still “undetermined risk,” but local authorities are making huge efforts to qualify the country as “controlled risk” allowing them to export its products to other countries where prices are more attractive than they are locally.

All other countries in Central America have no or small rendering operations.

It is important to note that of the 19 countries worldwide recognized in Resolution No. 16 adopted at the 80th General Session of the OIE in May 2012 as having a “negligible BSE risk” status in accordance with Chapter 11.5 of the OIE Terrestrial Animal Health Code, eight countries (Argentina, Brazil, Chile, Colombia, Panama, Paraguay, Peru, and Uruguay) are in Latin America.

Regulatory Agencies
Regulatory agencies with responsibility to the food and feed industries (including rendering by-products and the rendering industry) in Latin America are comprised of:
• Argentina – Instituto Argentino de Sanidad y Calidad Vegetal
• Brazil – Ministerio de Ganaderia, Agricultura y Abastecimiento
• Colombia – Instituto Colombiano Agropecuario
• Costa Rica – Servicio Nacional de Salud Animal
• Chile – Servicio Agricola y Ganadero
• Ecuador – Ministerio de Agricultura
• Mexico – Secretaria de Agricultura, Ganaderia, Desarrollo Rural, Pesca y Alimentacion
• Panama – Autoridad Panameña de Seguridad de Alimentos
• Venezuela – Ministerio del Poder Popular para la Agricultura and Tierras

Animal and Food Production in Latin America
ALAPRE also seeks opportunities to enhance the role of the rendering industry in the food supply chain since Latin America has a strong comparative advantage in agriculture, as indicated by its growing share of food trade. Its advantage is especially strong in some of the specific kinds of food – particularly meats – that will be most in demand as low-income countries climb up the development ladder.

As pointed out in a recent report from the World Bank, over the next decade, Latin America will play a major role in food production. Of the approximately 445.6 million hectares of land worldwide potentially suitable for sustainable expansion of cultivated area, about 28 percent is in Latin America, more than in any other region except Africa. The region has 36 percent of the 262.9 million hectares of land suitable for expansion worldwide that is within six hours travel time to the closest market. In addition, with about one-third of the 42,000 cubic kilometers in renewable water resources worldwide, Latin America is also well endowed in this resource, a key factor for aquaculture development with the highest water endowment among developing regions.

Indeed, advances in economic reform, technology, education, and management competency in Latin American countries have propelled some of the region’s largest companies into leading positions globally. Multibillion dollar companies include Brazil’s JBS, which became the world’s largest meat processor after buying a majority stake in chicken producer Pilgrim’s Pride in the United States and merging with Brazilian milk products, beef, and leather company Bertin in 2009. A few other examples include Molinos Río de la Plata, the largest exporter of branded food products in Argentina; Alicorp, Peru’s largest foodstuff maker, manufacturer, and owner of Nicovita, the largest aquaculture feed producer in Latin America; and Brazil Foods S.A., a merger among Perdigão and Sadia, with combined annual revenue of nearly $11 billion (USD), a workforce of 119,000, and 42 plants.

On the other hand, the population of Latin America is expected to grow to 665 million people with those living in cities reaching 83 percent by 2020. Therefore, poverty is not only a problem for rural communities, but also cities. According to a study by Wageningen University in the Netherlands, almost 10 percent of the world’s crops are harvested in Latin America. Predicted annual growth rates for meat and milk production are about 2.2 percent for the period 1990 to 2020. For meat, production will increase to about 60 kilograms per capita and milk to 120 kilograms per capita in 2020. In 2011, broiler meat consumption in Latin America increased 67 percent compared to 2000.

Final Remarks
Without a doubt, Latin America as a whole is moving forward, and in the next 10 years, the region should achieve an improved nutritional status, less poverty, and more agriculture. Intensive agriculture will require knowledge about animal production, management of the environment, and food safety. Access to international markets will depend on progress toward removing protection barriers and on the disease status and quality controls for safe food. Since the direction of government policies will be decisive in the process of increased food production and trading in Latin America, it is here that ALAPRE will play a major role in the next decade.

October 2012 RENDER | back