MDIA3 M. Dias Branco

M. Dias Branco S.A. Indústria e Comércio de Alimentos is a Brazilian company in the processed foods sector, with common shares traded on B3 under the ticker MDIA3, and a history that dates back to the 1940s in the state of Ceará. The group’s origins are linked to bakery activities and artisanal biscuit production conducted by Manuel Dias Branco, who in 1951 incorporated the company M. Dias Branco & Cia. Ltda. The entry of his son, Francisco Ivens de Sá Dias Branco, in 1953 marked the transition to a large-scale industrial model focused on the production of biscuits and pasta. Over the following decades, the company developed a highly fragmented distribution model and expanded its presence into states neighboring Ceará, consolidating brands such as Fortaleza and, later, Richester. The relocation of the industrial complex to the municipality of Eusébio, completed in 1980, and the subsequent IPO in 2006, with listing in the Novo Mercado segment of the then BM&FBOVESPA, were important milestones in the institutionalization and expansion of the company.

M. Dias Branco’s business model is characterized by strong vertical integration, combining wheat milling, refining of vegetable oils and fats, and manufacturing of finished food products. The company operates in a focused manner in the processed foods segment, covering biscuits, pasta, wheat flour and bran, margarines and vegetable fats, snacks, cakes, cake mixes, toast, healthy foods, granolas, gluten-free breads, sauces, seasonings, and other related items. A relevant portion of the wheat flour and vegetable fat used in the production process is produced in-house, which reduces dependence on external suppliers and allows greater control over costs and quality. All of the company’s net revenue and operating income originate from the food products segment, underscoring a strategic focus concentrated on this value chain.

M. Dias Branco’s products are organized into three major operating categories: Core Products; Wheat Mills and Vegetable Oil and Margarine Refining; and Adjacencies. The Core Products category, consisting of biscuits, pasta and margarines, accounts for the largest share of the company’s net revenue. In biscuits, the portfolio includes several subcategories such as water and salt/cream cracker, butter, coated, sweet, maria, cornstarch, sandwich cookies, rings, savory, mini pies, wafers and cookies. In pasta, the company operates with regular, durum wheat, semolina, semolina with eggs, lasagna, microwaveable pasta and instant noodles, while in margarines it produces items aimed both at household consumption and industrial use. The Wheat Mills and Vegetable Oil and Margarine Refining category covers household and industrial flours, bran in different granulometries, and industrial fats aimed at applications such as deep-frying, ice cream, coatings, fillings and spray. Adjacencies include cakes, snacks, cake mixes, toast, healthy products, sauces and seasonings, segments that have been strengthened through acquisitions and portfolio innovation.

M. Dias Branco’s brand strategy is based on a broad portfolio with strong regional and national presence, covering different income brackets and consumption profiles. Among the main brands are Vitarella, Piraquê, Richester, Fortaleza, Adria, Isabela, Pilar, Estrela, Puro Sabor, Medalha de Ouro, Bonsabor, Zabet, Basilar, Predilleto, Finna, Puro Sabor, Amorela, Delicitos, Salsitos, Fit Food, Frontera, Smart, Taste&Co, Jasmine and Las Acacias. In Core Products, brands such as Vitarella, Piraquê, Richester, Fortaleza, Adria, Isabela and Pilar represent a significant share of gross revenue, while in the Wheat Mills and Vegetable Oil and Margarine Refining group, Finna, geared toward end consumers, and Medalha de Ouro, focused on the bakery segment, stand out. In Adjacencies, brands such as Fit Food, Frontera, Jasmine, Piraquê, Adria, Vitarella and Finna drive presence in snacks, health-oriented products, sauces and seasonings. Maintaining multiple brands in similar categories allows the company to have strong regional penetration and serve consumers ranging from lower-income segments to those with higher purchasing power.

From a geographic and industrial standpoint, M. Dias Branco has consolidated an industrial park distributed across different regions of Brazil and one production unit abroad. Industrial operations are concentrated in states such as Ceará, Rio Grande do Norte, Bahia, Paraíba, Pernambuco, São Paulo, Paraná, Rio de Janeiro and Rio Grande do Sul, with plants that combine wheat mills and factories for biscuits, pasta, cakes, toast, granolas, snacks, margarines and fats. In the municipality of Eusébio (CE), for example, the company integrates wheat milling with the production of biscuits, pasta and toast, while in Salvador (BA), Cabedelo (PB), Natal (RN) and Bento Gonçalves (RS) it combines milling and production of pasta and biscuits in the same complex. The Uruguayan unit Las Acacias, in Montevideo, mainly produces dried wheat and durum wheat semolina pasta, as well as associated categories. This configuration helps optimize logistics costs, expand production capacity and adjust the production mix to the particularities of each regional market.

From the beginning of its expansion, the company developed a distribution model geared toward highly granular service to food retail, with a strong presence among micro, small and medium-sized retailers. The historical strategy of door-to-door sales and frequent visits to points of sale enabled close monitoring of pricing behavior, assortment and product turnover, facilitating portfolio and positioning adjustments. Currently, M. Dias Branco maintains relationships with large retail and wholesale chains, while preserving its vocation for granular coverage. In 2024, the largest individual customer accounted for 8.3% of net revenue, with purchases covering all product lines, which reveals a diversified customer base and reduces dependence on any single buyer. Production flexibility among industrial units and the logistics structure associated with dedicated port terminals for wheat also support the supply of the various regions served.

Vertical integration of the chain also includes stakes in port operations and grain logistics, mainly wheat. M. Dias Branco holds an interest in Terminal de Grãos de Fortaleza Ltda. (Tergran), together with other mills in the region, a company responsible for unloading and storing wheat at the Port of Fortaleza, with a focus on productivity and reducing import costs. It also holds an interest in Terminal de Trigo do Rio de Janeiro – Logística S.A., a venture jointly controlled with Bunge Alimentos S.A., which leases an area in the organized port of Rio de Janeiro to handle and store solid bulk products of plant origin. These interests complement the strategy of importing wheat grain through specialized terminals, bolstering the competitiveness of the supply chain for flour and derivatives that feeds the production of pasta, biscuits and other industrialized products.

In the socio-environmental and regulatory field, M. Dias Branco is subject to Brazilian environmental legislation at the federal, state and municipal levels, including requirements for environmental licensing of its production units and potentially polluting operations. All operating plants hold valid environmental licenses or are in the process of renewal, and the company maintains a system for monitoring environmental legislation in its factories. In 2024, investments were made to comply with regulatory requirements, environmental management and maintenance of a specialized team, including effluent treatment plants at certain sites and structured solid waste management with disposal via co-processing, incineration, recycling, reuse or landfill, depending on the nature of the waste. Units such as Eusébio (CE) and Jaboatão dos Guararapes (PE) have environmental management systems certified under ISO 14001:2015, and the company has adhered to post-consumer packaging reverse logistics programs, in compliance with the National Solid Waste Policy. These elements, together with the disclosure of environmental targets in its ESG Agenda, reinforce the integration of environmental and governance aspects into industrial operations and into the company’s positioning in the Brazilian processed foods market.

As an issuer of shares listed in B3’s highest corporate governance segment, M. Dias Branco operates with a corporate structure that includes subsidiaries in Brazil and abroad, although some are being discontinued after becoming inactive. Among the subsidiaries with relevant operations are Jasmine, focused on the production of healthy, organic, whole-grain, sugar-free and gluten-free foods, and Las Acacias, in Uruguay, focused on pasta and wheat derivatives. Expansion through the acquisition of regional and national biscuit and pasta brands such as Adria, Vitarella, Pilar, Estrela and others shaped a group with a significant presence in the Brazilian market for wheat-based processed foods and derivatives. MDIA3 shares reflect this combination of an integrated industrial platform, a broad portfolio of brands and national and regional presence built over more than seven decades of activity in the food sector.