– Consolidations in recent years have resulted in customers of considerable size, sophisticated, and with a greater purchasing power, therefore more able to operate with reduced inventories, opposing price increases and demanding lower prices, as well as more promotional programs and specifically customized products. Likewise, they may use the space set aside for the Company’s product display to present their own label products, which may adversely affect the financial results. To mitigate these risks, the Company maintains a diversified client portfolio, and its exports are distributed in approximately 100 countries, in addition to having sales offices located in 15 regions around the world.
Sanitation barriers – Concern about the possibility of occurrence and spread of diseases affecting cattle may mean restrictions or suspension from the market. Therefore, the Company frequently monitors the sanitary conditions of the countries where it has production units. In Argentina, which is supervised by the Ministry of Livestock, Agriculture and Fisheries, the Patagonian region has achieved FMD-free status without vaccination and the rest of the country is free through vaccination. In Colombia, where an outbreak of F&M disease was identified in late 2018, the Ministry of Agriculture and Rural Development (MADR) has been responsible for its control. In Paraguay, the Servicio Nacional de Calidad y Salud Animal (SENACSA) is responsible for controlling F&M disease through a system of scheduling and on-site verification of herd vaccinations by its accredited technicians. In Uruguay, supervised by the Ministry of Livestock, Agriculture and Fisheries (MGAP), the country has been declared free of foot-and-mouth disease through vaccination. Another disease that can affect cattle is Bovine Spongiform Encephalopathy (BSE). However, a resolution by the World Organization for Animal Health (OIE) recognizes Brazil, Argentina, Colombia, Paraguay, and Uruguay, areas where the Company has operations, as countries of negligible risk for the disease. FP12
Socio-environmental issues – Failure to comply with environmental standards may result in administrative, civil, and criminal sanctions and liability for damages. Moreover, the inability to meet the requirements of the labor legislation may expose the health and safety of employees and service providers to risks, resulting in administrative and criminal penalties. In order to mitigate these risks, the Company has consistently invested in improving its facilities in order to reduce potential damage to the environment and provide its employees with a safer working environment. The Company ensures to meet applicable environmental requirements, performing periodic monitoring to verify the efficiency of the effluent and water treatment systems, control of GHG emissions, water, and energy consumption and waste management, as well as other environmental indicators.
In addition, it has adopted social and environmental responsibility criteria for the operations located in Paraguay in relation to the registration of cattle suppliers in compliance with labor legislation.
Throughout 2019, there was an effort made to strengthen the relationship with local communities and several projects were carried out to foster stronger proximity. Particularly noteworthy is the annual Open House event, which welcomes neighboring communities to visit the facilities, their processes and environmental controls, products, and services. Another example is the project Revive, which aims to promote environmental preservation for the communities around the Paraguayan Athena Foods’s units.