BRF Global

BUSINESS STRATEGY

We aim to be the most inspiring and important global food company. To do this, we reviewed our long-term plan in our annual strategic planning process. We have set four main goals for our company in the coming years:

1.Have a portfolio of global brands. We seek to expand the portfolio of brands around the world. Sadia, for example, is present in several markets worldwide. In Brazil and in countries of the Middle East, the brand reached impressive levels of penetration and preference. Qualy is our most important margarine brand, with an innovative approach in Brazil and abroad.

2.Focus our efforts on the major global categories. Strengthening our portfolio and quality must be a constant effort, so we select our most important categories based on strategy and value. Our global focus is on our portfolio of value-added pork and poultry cuts, cold cuts, breaded and cooked meals, ready meals, handy dishes and food service..

3.Capture global opportunities. Internationally, we have taken important steps to solidify BRF as a global company. In the Middle East, we continue to enhance our halal brand. In Asia, we have invested in the portfolio of brands and acquisitions in Thailand and Malaysia. In Eastern Europe we focus on retail presence and our food service channel has become even more relevant in the UK. In Argentina, we expanded our position in the cold market through the acquisition of two other companies. In Turkey, we bought the largest local poultry producer, with fully integrated operations and the highest brand recognition in the industry.

4.Transformations. In the second half of 2016, we announce our intention to focus on the halal market. In this context, BRF analyzed strategic alternatives for its new subsidiary, OneFoods. In early 2017, oneFoods began operations.

COMPETITIVE STRENGTHS

Our main advantages are:

1.Leadership in the Brazilian food market, with strong brands and a global presence. We are one of the largest producers of fresh and frozen protein foods in the world, with size and scale that allow us to compete in Brazil and abroad. Our own and licensed brands are highly recognized in several countries, such as Brazil, Argentina, Saudi Arabia, among others. As we are expanding our presence with local brands in key markets. Our brands Sadia and Perdigão were included in “The Most Valuable Brands of Brazil” in 2016 and 2015, respectively, by Millward Brown Vermeer.

2.Broad distribution network in Brazil and international markets. We have an established distribution network capable of distributing frozen and cooled products in almost any region of Brazil. In addition, we export products to more than 140 countries and develop our own distribution networks, from which we sell directly to local food processing companies and distributors.

3.Low cost products in a growing global market. We have a competitive advantage over producers located in some of our international markets because of our lower production costs and efficiency gains in animal production in Brazil. We also achieve scale and quality of production that allow us to compete effectively with the main producers in Brazil and in other countries. In addition, we have implemented a series of programs designed to maintain and improve our cost efficiency, including programs to streamline our supply chain, integrating demand, production, inventory management and customer service.

4.Strategic and diversified geographic location. Our slaughter units are strategically located in different regions of Brazil (South, Southeast and Midwest). In addition, the geographical diversity of our distribution centers also gives us lower transport costs. Over the years, we have taken great strides towards internationalization, offering the best options to clients through local action, allowing quick and efficient access to strategic markets and increasing the flexibility of adapting products to local desires.

5.Emphasis on quality, safety and diversified product portfolio. We monitor the treatment of poultry and suines that we breed at all stages of their lives and throughout the production process. In 2013, we launched in Brazil a campaign to publicize the Total Guarantee Program that ensures our chickens do not contain hormones or preservatives and are inspected individually. In addition, we were the first Brazilian company approved by the European Food Safety Inspection System, which qualified us to sell processed poultry products to European consumers. This means that we serve the world’s most rigorous customers and comply with their quality control and external auditing standards.

6.Team of experienced managers. We have improved our organizational structure and redesigned it. The new format includes vice presidencies that works for a more integrated and transversal management.