Profile: Industrias Bachoco, S.A.B. de C.V. (IBA)

Industrias Bachoco, S.A.B. de C.V. is a holding company, incorporated on April 17, 1980, with no operations other than holding the stock of its subsidiaries. Its main operating subsidiary is Bachoco, S.A. de C.V. (BSACV), which owns the principal operating assets of Industrias Bachoco, S.A.B. de C.V. The Company has four main product lines: chicken, table eggs, balanced feed, and swine. The Company also controls the production and distribution processes. With over 700 production and distribution facilities dispersed throughout Mexico, the Company's operations include preparing feed, breeding, hatching and growing chickens, and processing, packaging and distributing chicken products. The Company is also a producer of commercial animal feed. It sells feed both through distributors and directly to small producers. The Company’s main subsidiaries, apart from BSACV, are Acuicola Bachoco, S.A. de C.V., Aviser, S.A. de C.V., Bachoco Comercial, S.A. de C.V, and Campi Alimentos, S.A. de C.V.

The six product categories exist for fresh chicken in Mexico are live, public market, rotisserie, supermarket broiler, chicken parts, and value-added products. Live chicken is delivered alive to small independent slaughtering operations or to wholesalers that contract with independent slaughtering operations for processing. The freshly slaughtered chicken is then sold to chicken shops and other specialized retailers for sale to consumers and in some areas is sold directly to consumers by the slaughterhouse. Public Market chicken is a whole broiler presented either uneviscerated or eviscerated, generally sold within 48 hours after slaughter in public markets throughout Mexico, but primarily concentrated in the Mexico City metropolitan region. Rotisserie chicken is a whole broiler presented eviscerated and ready to cook. Rotisserie chicken is sold by wholesalers and directly by producers to small shops, stands (rosticeiias or asaderos) and supermarkets, which cook the chicken and sell it whole and freshly cooked to the end-consumer, providing an economical form of fast-food.

Chicken Products

Supermarket Broiler chicken is a fresh whole broiler presented with the edible viscera packed separately. In most cases, it is sold directly by producers to supermarkets and, in some regions, to other independent food shops. Chicken Parts refers to cut up fresh chicken parts sold wrapped in trays or in bulk principally to supermarket chains, the fast food industry and other institutional food service providers. Producers sell directly to the supermarket chains and deliver the chicken directly to the outlet. Value added Products refers mainly to cut up fresh chicken parts with value added treatment like marinating, breading, and individual quantity frozen, sold mainly wrapped in trays principally to supermarkets and other institutional chains. Producers generally sell directly to the supermarket chains and deliver the chicken directly to the store.

Table Eggs

The Company has designed its egg distribution system to transport eggs from its laying farms at Celaya, Los Mochis, Obregon, Mexicali, Tecamachalco, Merida, Saltillo, and La Laguna regions to customers in all sales regions. It sells packaged eggs directly to all of the principal supermarket chains in Mexico, with daily deliveries directly to their outlets.

Balanced Feed

The Company entered the feed business as a result of its acquisition of Grupo Campi. The Company’s Local production is composed of commercial and integrated manufacturers. The Company has four feed plants dedicated to produce balanced feed to third parties.

Swine

The Company purchased breeder swine live from the United States. It then raises the swine to maturity at its farms in Celaya and three other locations in Mexico. Mature swine is sold on the hoof to Mexican swine meat packers for the production of pork products.

Turkey and Prepared Beef Products

The Company introduced two product lines: turkey and value added beef and pork products. It does not raise either turkey or cattle; it only processes these products. During the year ended December 31, 2008, these product lines represented less than 1% of the Company’s total sales.