________________________________________________________________________________
          As Filed with the Securities and Exchange Commission on June 30, 2003


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             ----------------------

                                    FORM 20-F

                             ----------------------

                                  ANNUAL REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2002

                        Commission File Number: 333-7480

                        INDUSTRIAS BACHOCO, S.A. DE C.V.
             (Exact name of Registrant as specified in its charter)

                               Bachoco Industries
                 (Translation of Registrant's name into English)

                            The United Mexican States
                 (Jurisdiction of incorporation or organization)

                           Avenida Tecnologico No. 401
                          Ciudad Industrial C.P. 38010
                           Celaya, Guanajuato, Mexico
                    (Address of principal executive offices)

      Securities registered or to be registered pursuant to Section 12(b)
                                  of the Act:

                                                     Name of each exchange
        Title of each class                           on which registered
        -------------------                         -----------------------
  American Depositary Shares, each                  New York Stock Exchange
  representing six Units, each Unit
  consisting of one Series B Share
      and one Series L Share.

Securities Registered or to be Registered pursuant to Section 12(g) of the Act:
None.

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: None.

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:

           Series B Capital Stock       447,465,700 Shares
           Series L Capital Stock       147,465,700 Shares

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

                                  Yes X     No

Indicate by check mark which financial statement item the registrant has elected
to follow:

                                 Item 17   Item 18 X

________________________________________________________________________________

<PAGE>


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<S>         <C>                <C>                                                                           <C>




                                TABLE OF CONTENTS
                                                                                                             Page
                                                                                                             ----

PART I

 ITEM 1.  NOT APPLICABLE........................................................................................4
 ITEM 2.  NOT APPLICABLE........................................................................................4
 ITEM 3.  KEY INFORMATION.......................................................................................4
 ITEM 4.  INFORMATION ON THE COMPANY...........................................................................12
 ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS.........................................................28
 ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES...........................................................40
 ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS....................................................46
 ITEM 8.  FINANCIAL INFORMATION................................................................................48
 ITEM 9.  THE OFFER AND LISTING................................................................................49
 ITEM 10.  ADDITIONAL INFORMATION..............................................................................53
 ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..........................................66
 ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES*.............................................67

PART II

 ITEM 13.  DEFAULT, DIVIDEND, ARREARAGES AND DELINQUENCIES*....................................................68
 ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS*.......................68
 ITEM 15.  CONTROLS AND PROCEDURES.............................................................................68
 ITEM 16. (RESERVED)*..........................................................................................68

PART III

 ITEM 17.  FINANCIAL STATEMENTS................................................................................68
 ITEM 18.  FINANCIAL STATEMENTS**..............................................................................68
 ITEM 19.  EXHIBITS............................................................................................69

                                        i
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<PAGE>





     Industrias Bachoco, S.A. de C.V. is a holding company with no operations
other than holding the stock of its subsidiaries. Its principal operating
subsidiary is Bachoco, S.A. de C.V. ("BSACV"), which owns Bachoco's principal
operating assets and which accounted for 95.3% of consolidated total assets on
December 31, 2002. References herein to "Bachoco" or the "Company" are, unless
the context requires otherwise, to Industrias Bachoco, S.A. de C.V. and its
consolidated subsidiaries as a whole.

     We are incorporated under the laws of Mexico, and all of our operations are
in Mexico. Our principal executive offices are located at Avenida Tecnologico
No. 401, Celaya, Guanajuato, Mexico C.P. 38010, and our telephone number is
(524) 618-3500.

                           Presentation of Information

     We publish our financial statements in Mexican pesos and present our
financial statements in accordance with generally accepted accounting principles
in Mexico ("Mexican GAAP"). Mexican GAAP requires restatement of all financial
statements to constant pesos as of the date of the most recent balance sheet
presented. Except as otherwise indicated, all data in both the financial
statements included below in Item 18 (which together with the attached notes
constitute the "Consolidated Financial Statements") and the selected financial
information included throughout this Form 20-F (this "Annual Report") have been
restated in constant pesos as of December 31, 2002.

     Mexican GAAP differs in certain respects from generally accepted accounting
principles in the United States ("U.S. GAAP"). For a discussion of certain
significant differences between Mexican GAAP and U.S. GAAP as they relate to us,
together with a reconciliation of operating income, net income and total
stockholders' equity to U.S. GAAP, and a condensed statement of cash flows under
U.S. GAAP, see Note 17 to the Consolidated Financial Statements. The effect of
price level restatement under Mexican GAAP has not been reversed in the
reconciliation to U.S. GAAP. See Note 17 to the Consolidated Financial
Statements.

     References herein to "U.S. dollars," "U.S.$" or "$" are to the lawful
currency of the United States. References herein to "pesos" or "Ps." are to the
lawful currency of Mexico. This Annual Report contains translations of certain
peso amounts into U.S. dollars at specified rates solely for the convenience of
the reader. Unless otherwise indicated, such U.S. dollar amounts have been
translated from pesos at an exchange rate of Ps.10.425 to U.S.$1.00, the
exchange rate on December 31, 2002.

     Certain amounts set forth herein may not be the exact sum due to rounding.

     As used herein, the term "tonnes" refers to metric tons of 1,000 kilograms
(equal to 2,204.6 pounds) and the term "billion" refers to one thousand million
(1,000,000,000). One square meter is equivalent to 10.764 square feet.

                                   Market Data

     This Annual Report contains certain statistical information regarding the
Mexican chicken, beef, egg and swine markets and our market share. We have
obtained this information from a variety of sources, including the producers'
associations Union Nacional de Avicultores ("UNA"), Consejo Nacional
Agropecuario ("CNA") and Consejo Mexicano de Porcicultura ("CMP"), as well as
Banco de Mexico (the "Mexican Central Bank"), Secretaria de Agricultura,
Ganaderia, Desarrollo Rural, Pesca y Alimentos (the "Ministry of Agriculture,
Livestock, Rural Development, Fishing and Food" or "SAGARPA") and publications
of the U.S. Department of Agriculture ("USDA"). The producers' associations rely
principally on data provided by their members. Information for which no source
is cited was prepared by us on the basis of our knowledge of the Mexican
chicken, egg and swine markets and the wide variety of information available
regarding these markets. The methodology and terminology used by different
sources are not always consistent, and data from different sources are not
readily comparable.

                                       ii
<PAGE>

                           Forward-Looking Statements

     We may from time to time make written or oral forward-looking statements in
our periodic reports to the Securities and Exchange Commission on Forms 20-F and
6-K, in our annual report to shareholders, in offering circulars and
prospectuses, in press releases and other written materials and in oral
statements made by one of our officers, directors or employees to analysts,
institutional investors, representatives of the media and others.

     Examples of such forward-looking statements include, but are not limited
to: (i) projections of revenues, income (or loss), earnings (or loss) per share,
capital expenditures, dividends, capital structure or other financial items or
ratios, (ii) statements of our plans, objectives or goals or those of our
management, including those relating to new contracts, (iii) statements about
future economic performance and (iv) statements of assumptions underlying such
statements. Words such as "believe," "anticipate," "plan," "expect," "intend,"
"target," "estimate," "project," "predict," "forecast," "guideline," "should"
and similar expressions are intended to identify forward-looking statements but
are not the exclusive means of identifying such statements.

     Forward-looking statements involve inherent risks and uncertainties, and a
number of unexpected changes could cause actual results to deviate from our
plans, objectives, expectations, estimates and intentions. We recognize that the
accuracy of our predictions and our ability to follow through on our intentions
depend on factors beyond our control. The potential risks are many and varied,
but include unexpected changes in:

     --   economic, weather and political conditions;

     --   raw material prices;

     --   competitive conditions; and

     --   demand for chicken, eggs and swine.


                                      iii
<PAGE>




                                     PART I

ITEM 1.  Not Applicable

ITEM 2.  Not Applicable

ITEM 3.  Key Information

Selected Financial Data

     The information set forth below is derived from Bachoco's Consolidated
Financial Statements, which are included in Item 18. In this disclosure, we
explain the figures and year-to-year changes in our Consolidated Financial
Statements. Where there appears an ambiguity or discrepancy in the text, you
should interpret it in light of the information on the Consolidated Financial
Statements.

     In preparing the Consolidated Financial Statements, we followed Mexican
GAAP, which differs in certain respects from U.S. GAAP. Note 17 to the
Consolidated Financial Statements provides a description of the principal
differences between Mexican GAAP and U.S. GAAP as they relate to us, and a
reconciliation to U.S. GAAP of total stockholders' equity, net income and
operating income, and a condensed statement of cash flows under U.S. GAAP as of
December 31, 2001 and 2002 and for the years ended December 31, 2000, 2001 and
2002. Our financial statements were prepared pursuant to Bulletin B-10, as
amended, and Bulletin B-12, issued by the Mexican Institute of Public
Accountants which became effective on January 1, 1990.

     Bulletin B-10 is designed to account for the effects of inflation on
financial disclosures by requiring us:

     --   to restate non-monetary assets at current replacement cost or by using
          the Mexican National Consumer Price Index (NCPI),

     --   to restate non-monetary liabilities using the NCPI,

     --   to restate the components of stockholders' equity using the NCPI and

     --   to record gains or losses in purchasing power that result from our
          holding monetary liabilities or assets.

     Bulletin B-10 also requires restatement of all financial statements in
constant pesos as of the date of the most recent balance sheet presented. Except
as otherwise indicated, we have restated all financial information taken from
the financial statements or derived from them, as explained below, in constant
pesos as of December 31, 2002. Bulletin B-12 requires that the statement of
changes in financial position reconcile the discrepancies between the restated
historical balance sheet and the current balance sheet. The effects of
price-level restatement under Mexican GAAP have not been reversed in the
reconciliation to U.S. GAAP. See Note 17 to the Audited Consolidated Financial
Statements.

     Through December 31, 1996, non-monetary assets were valued according to
current replacement cost based on independent appraisals. Effective January 1,
1997, the Fifth Amendment to Bulletin B-10 modified the method or restatement of
non-monetary assets to account for the effects of inflation. Under the Fifth
Amendment, we restate (a) inventory and cost of sales by using replacement cost
and (b) property, plant and equipment by applying factors derived from the NCPI.

                                        4
<PAGE>


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<S>                                    <C>         <C>         <C>           <C>         <C>            <C>


                                                             As of and for the year ended December 31,
                                        ----------------------------------------------------------------------------
                                           1998        1999        2000          2001        2002           2002(2)
                                        ----------  ----------  -----------   ----------  -----------    -----------
Income Statement Data                       (millions of constant pesos as of December 31, 2002)(1)     (millions of
                                                                                                         U.S. dollars)
                                                                                                             (1)

Mexican GAAP:
Net Sales                               Ps.7,188.2  Ps.6,785.1  Ps.10,140.3   Ps10,202.3  Ps.10,357.9    U.S.$ 993.6
   Cost of sales.....................      5,180.5     5,039.3      7,244.1      7,467.9      7,683.5          737.0
                                           -------     -------      -------      -------      -------          -----
   Gross profit......................      2,007.7     1,745.8      2,896.2      2,734.4      2,674.4          256.5
   Operating income..................      1,290.7       898.8      1,654.2      1,364.5      1,242.0          119.1
   Comprehensive financing cost......         10.0       129.3        149.6        116.8         14.3            1.4
   Net income........................      1,239.7       978.4      1,351.4      1,142.4      1,480.5          142.0
   Net income per Unit(3)............          4.1        3.29         4.54         3.83         4.96           0.48
   Net income per ADS(4).............         24.7       19.72        27.24         23.0         29.8            2.8
   Weighted average Units outstanding
    (thousands)......................      300,000     298,078      296,124      297,454      297,898        297,898
U.S. GAAP:
Net Sales                               Ps.7,188.2  Ps.6,785.1  Ps.10,140.3   Ps10,202.3  Ps.10,357.9    U.S.$ 993.6
   Cost of sales.....................      5,180.5     5,039.3      7,244.1      7,467.9      7,683.5          737.0
                                           -------     -------      -------      -------     --------          -----
   Gross profit......................      2,007.7     1,745.8      2,896.2      2,734.4      2,674.4          256.5
   Operating income..................      1,291.6       896.9      1,654.9      1,362.8      1,255.1          120.4
   Comprehensive financing cost               23.1       129.3        118.5         91.8         10.9            1.0
   Net income........................   Ps.1,127.5  Ps.1,018.6   Ps 1,378.1   Ps.1,156.6   Ps.1,497.8    U.S.$ 143.3
   Net income per Unit(3)............         3.76        3.41         4.65         3.88         5.03           0.48

   Net income per ADS(4).............         22.6       20.46         27.9        23.28        30.18           2.88

Statement of Financial Position Data
Mexican GAAP:
   Cash and cash equivalents.........     Ps.966.9  Ps.1,424.6   Ps.1,318.4   Ps.1,236.4   Ps.1,696.0    U.S.$ 162.7
   Property, plant and equipment.....      5,393.3     6,955.5      6,926.7      7,185.1      7,132.0          684.1
   Total assets......................      8,150.1    10,812.3     10,625.4     11,129.6     11,564.5        1,109.3
   Short-term debt(5)................        155.2    1,193.04        182.6        157.0        117.7           11.3
   Long-term debt....................        371.3     1,185.6        655.8        164.6         73.3            7.0
   Stockholders' equity..............      7,271.8     7,790.7      7,724.2      8,348.7      9,474.0          908.8
U.S. GAAP:
   Cash and cash equivalents.........     Ps.966.9  Ps.1,424.6   Ps.1,318.4   Ps.1,236.4   Ps.1,696.0    U.S.$ 162.7
   Property, plant and equipment.....      5,365.7     6,929.7      6,933.4      7,216.7      7,165.6          687.3
   Total assets......................   Ps.8,120.0 Ps.10,786.3  Ps.10,632.1  Ps.11,154.5  Ps.11,608.6  U.S.$ 1,113.5
   Short-term debt(5)................        155.2    1,193.04        182.6        157.0        117.7           11.3
   Long-term debt....................        371.3     1,185.6        655.8        164.6         73.3            7.0
   Stockholders' equity..............      6,011.8     6,571.8      7,689.4      8,331.3      9,477.0          909.0

Selected Operating Data
   Sales volume (thousands of tones):
     Chicken.........................        354.2       415.7        601.1        662.2        665.4          665.4
     Eggs............................         63.1        67.5         70.0         85.6        131.7          131.7
     Swine...........................         11.2         9.5          9.0          9.0          9.0            9.0
     Feed............................          0.0         0.0        292.4        346.0        324.7          324.7

   Gross margin(%)...................        27.9%       25.7%        28.6%        26.8%        25.8%          25.8%
   Operating margin(%)...............        18.0%       13.2%        16.3%        13.4%        12.0%          12.0%
   Net margin(%).....................        17.2%       14.4%        13.3%        11.2%        14.4%          14.4%
   Total employees...................       10,806      11,215       16,396       18,482       18,306         18,306


(1)  Except per Unit and per ADS amounts and operating data.
(2)  Peso amounts have been translated into U.S. dollars, solely for the
     convenience of the reader, at the rate of Ps.10.425 per U.S. dollar.
(3)  Net income and dividends per Unit has been computed based on the weighted
     average number of common shares outstanding, giving retroactive effect to a
     cancellation of shares in June 1994 to reduce the deficit from restatement
     of stockholders' equity and increases in the number of shares outstanding
     on December 1994 and April 1997 as a result of stock splits, multiplied by
     two to reflect the ratio of two Shares per Unit.
(4)  Net income per ADS has been computed by multiplying net income per Unit by
     six, to reflect the ratio of six Units per ADS.
(5)  Includes notes payable to banks and current portion of long-term debt.
</TABLE>
<PAGE>

Exchange Rates

     Mexico has had a free market for foreign exchange since 1991. Prior to
December 21, 1994, the Mexican Central Bank, Banco de Mexico, intervened in the
foreign exchange market to keep the peso-U.S. dollar exchange rate within a
range prescribed by the Mexican government.

     In December 1994, the Mexican government suspended intervention by Banco de
Mexico and allowed the peso to float freely against the U.S. dollar. The peso
declined sharply in December 1994 and continued to fall under conditions of high
volatility in 1995.

     In 1996, the peso fell more slowly and was less volatile. Relative
stability characterized the foreign exchange markets during the first three
quarters of 1997. However, the fall of the Hang Seng Index of the Hong Kong
Stock Exchange on October 24, 1997 marked the beginning of a period of increased
volatility in the foreign exchange markets, with the peso falling over 10% in
just a few days.

     In 1998, the foreign exchange markets experienced volatility as a result of
the financial crisis in Asia and Russia and financial turmoil in other
countries, including Brazil and Venezuela. However, in 1999 and 2000 the peso
strengthened against the U.S. dollar as a result of better economic
expectations, leading to inflows of capital. During 2001, the Mexican peso
continued to appreciate during the first eight months of the year mainly as a
result of inflows of capital. After the events of September 11th, the volatility
of the peso increased. In November and December 2001, however, the peso's
volatility subsided and the peso appreciated against the U.S. dollar.

     The Mexican peso remained stable during the first four months of 2002. Its
volatility increased, however, during the rest of the year. Growth in the
Mexican economy was sluggish in 2002 and the beginning of 2003, and the peso
depreciated by 12.2% against the U.S. dollar between December 31, 2001 and
December 31, 2002.

     We cannot assure you that the Mexican government will maintain its current
policies with regard to the peso, or that the value of the peso will not
fluctuate significantly in the future.

     The following table sets forth, for the periods indicated, the high, low,
average and period-end exchange rates for the purchase and sale of U.S. dollars
(presented in each case as the average between such purchase and sale rates),
expressed in nominal pesos per U.S. dollar.
<TABLE>
<CAPTION>
<S>                                                          <C>          <C>        <C>            <C>

                                                                               Exchange Rate(1)
                                                              ----------------------------------------------
             Year Ended December 31,                           High         Low     Average(2)    Period-End
                                                              -------     -------   ----------    ----------
             1997......................................        8.410       7.717     7.967           8.070
             1998......................................       10.630       8.040     9.242           9.901
             1999......................................       10.600       9.240     9.561           9.480
             2000 .....................................       10.090       9.180     9.471           9.618
             2001 .....................................        9.970       8.950     9.327           9.156
             2002 .....................................       10.430       9.000     9.740           9.425

               (1)  The exchange rates are the noon buying rates in New York
                    City for cable transfers in pesos as certified for customs
                    purposes by the Federal Reserve Bank of New York (the "noon
                    buying rate").
               (2)  Average of month-end rates for each period shown.
</TABLE>
<PAGE>

                                                                Exchange Rate(1)
                                                              ------------------
             End of Each Month                                 High         Low
                                                              -------     ------
             November, 2002............................        10.34       10.09
             December, 2002............................        10.43       10.10
             January, 2003.............................        10.98       10.32
             February, 2003............................        11.06       10.77
             March, 2003...............................        11.24       10.66
             April, 2003...............................       10.770      10.310
             May, 2002.................................       10.424      10.340

               (1)  The exchange rates are the noon buying rates in New York
                    City for cable transfers in pesos as certified for customs
                    purposes by the Federal Reserve Bank of New York.


Risk Factors

Risks Relating to Mexico

     Economic and Political Developments in Mexico May Adversely Affect Our
     Business

     Our business operations and assets are located in Mexico. As a result, our
business may be significantly affected by the general condition of the Mexican
economy, by devaluation of the peso, by inflation and high interest rates in
Mexico or by political developments in Mexico.

     Mexico has experienced Adverse Economic Conditions

     Mexico experienced a severe economic crisis following the devaluation of
the peso in December 1994. In recent years, economic crises in Asia, Russia,
Brazil and other emerging markets have adversely affected the Mexican economy
and could do so again. In 2000, Mexico's gross domestic product, or GDP, growth
was 6.9% and inflation was 8.9%. In 2001, GDP decreased 0.3%, as a result of the
U.S. recession, while inflation declined to 4.4%. In 2002, GDP increased only
slightly by 0.9% as a result of the continued recession in the United States,
while inflation increased to 5.7%. The Mexican government estimates that GDP
growth in 2003 will be approximately 2.4% and that inflation will be 3.0%. These
estimates may not prove to be accurate. Economic conditions in Mexico are
heavily influenced by conditions in the United States. If the U.S. economy does
not recover, Mexican economic growth will be adversely affected.

     If the Mexican economy falls into a recession or if inflation and interest
rates increase significantly, consumers may find it difficult to pay for the
products we offer. This and other effects of recession or increased inflation
and interest rates could have serious adverse consequences on our business,
financial condition and results of operations.

     Depreciation or Fluctuation of the Peso Relative to the U.S. Dollar Could
     Adversely Affect Our Financial Condition and Results of Operations

     Due to both our purchase of feed ingredients in the United States and our
U.S. dollar-denominated indebtedness, we are affected by fluctuations in the
value of the peso against the U.S. dollar. In 2002, the peso depreciated against
the U.S. dollar by 12.2% at year-end, and the average value of the peso against
the U.S. dollar during 2002 was 3.4% lower than in 2001. In 2001, the peso
appreciated against the U.S. dollar by 5.0% at year-end, and the average value
of the peso against the U.S. dollar during 2001 was 1.5% higher than in 2000. In
2000, the peso depreciated slightly against the U.S. dollar at year-end, but the
average value of the peso against the U.S. dollar during 2000 was 1.0% higher
than in 1999. The single largest component of our cost of sales, our feed, is
comprised partially of ingredients we purchase in the U.S., where prices are
denominated in U.S. dollars; in addition, the prices of ingredients we purchase
in Mexico may be influenced by U.S. commodity markets. Therefore, should the
peso fall relative to the U.S. dollar, both the cost of our operations and our
debt payments would increase. Any future depreciation or devaluation of the peso
may result in further net foreign exchange losses.
<PAGE>

     Severe devaluation or depreciation of the peso may also result in
disruption of the international foreign exchange markets and may limit our
ability to transfer or to convert pesos into U.S. dollars for the purpose of
making timely payments of interest and principal on our indebtedness. While the
Mexican government does not currently restrict, and for many years has not
restricted, the right or ability of Mexican or foreign persons or entities to
convert pesos into U.S. dollars or to transfer other currencies out of Mexico,
the government could institute restrictive exchange rate policies in the future.
Currency fluctuations will probably continue to affect our income and expenses.

     Furthermore, fluctuations in the exchange rate between the peso and the
U.S. dollar will also affect the U.S. dollar equivalent of the pesos price of
the Units on the Mexican Stock Exchange and the price of ADSs on the New York
Stock Exchange. Because we pay cash dividends in pesos, exchange rate
fluctuations will affect the U.S. dollar amounts received by holders of ADRs
upon conversion of such cash dividends by the Depositary.

     High Levels of Inflation and High Interest Rates in Mexico Could Adversely
     Affect Our Financial Condition and Results of Operations

     Mexico has experienced high levels of inflation and high domestic interest
rates. The annual rate of inflation, as measured by changes in the National
Consumer Price Index, was 5.7% in 2002 and 4.4% for 2001. Inflation for the
first quarter of 2003 was 1.01%. Interest rates on 28-day Mexican treasury
bills, or Cetes, averaged 7.1% during 2002. On May 30, 2003, the 28-day Cetes
rate was 4.91. High interest rates in Mexico could adversely affect our costs.
Our earnings may also be affected by changes in interest rates due to the impact
those changes have on our variable-rate debt instruments.

     Political Events in Mexico, Including the Recent Transition to a New
     Presidential Administration, Could Affect Mexican Economic Policy and Our
     Operations

     The national elections held in July 2000 ended 71 years of rule by the
Institutional Revolutionary Party ("PRI") with the election of president Vicente
Fox, a member of the National Action Party ("PAN"), and resulted in the
increased representation of opposition parties in the Mexican Congress and in
mayoral and gubernatorial positions. Neither the PRI nor the PAN currently has a
majority in the Congress or Senate. Although there have not yet been any
material adverse repercussions resulting from this political change, multiparty
rule is still relatively new in Mexico and could result in economic or political
conditions that could materially and adversely affect our operations. The lack
of a majority party in the legislature and the lack of alignment between the
legislature and the President could result in deadlock and prevent the timely
implementation of economic reforms, which in turn could have a material adverse
effect on the Mexican economy and on our business.

     Developments in Other Emerging Market Countries May Adversely Affect Our
     Business or the Market Price of Our Securities

     The market value of securities of Mexican companies is, to varying degrees,
affected by economic and market conditions in other emerging market countries.
Although economic conditions in such countries may differ significantly from
economic conditions in Mexico, investors' reactions to developments in any of
these other countries may have an adverse effect on the market value of
securities of Mexican issuers. The recent economic crisis in Argentina did not
have a significant adverse effect on the Mexican economy and the value of
Mexican securities. Prices of Mexican securities were adversely affected,
however, after the events of September 11, 2001, in the USA. Beginning in 2003,
securities in Mexico were affected by expectations about the war in Iraq. We
cannot assure you that the market value of our securities will not be adversely
affected by events elsewhere.
<PAGE>

Risks Relating to Our Organization

     The chicken industry is characterized by long-term price declines and
     cyclical periods

     The Mexican chicken industry, like the chicken industry in other countries,
has been characterized by a long-term decline in prices in real terms. The
industry has undergone cyclical periods of higher prices and profitability,
followed by overproduction, leading to periods of lower prices and
profitability. Real prices for eggs and swine in Mexico have also declined over
the long term and have varied cyclically. The market that we serve is subject to
volatility with respect to supply, which affects prices. We cannot assure you
that future cyclicality, excess supply and downturns in real prices will not
adversely affect our results.

     The price of feed ingredients is subject to significant volatility

     The largest single component of our cost of sales is the cost of
ingredients used to prepare feed, including sorghum, soybean meal, corn, fish
meal, meat meal and, for certain chicken products, marigold extract. The price
of most of our feed ingredients is subject to significant volatility resulting
from weather, the size of harvests, transportation and storage costs,
governmental agricultural policies, currency exchange rates and other factors.
Given the long-term declining trends in real chicken prices, we may experience
difficulty or delays in passing any increase in grain costs to customers.
Accordingly, increases in the prices of the main ingredients used in the
preparation of feed may have a material adverse effect on our margins and
results of operations. We currently do not hedge directly on the cost of our
feed ingredients. However, because we purchase many feed ingredients in U.S.
dollars, we may acquire financial instruments from time to time to protect us
against exchange rate fluctuations.

     Our operations depend on raising animals and meat processing, which are
     subject to risks such as disease, contamination and adverse weather
     conditions

     Our operations involve raising animals and are subject to a variety of
risks, including disease, contamination and adverse weather conditions.
Chickens, in particular, are susceptible to infections by a variety of
microbiological agents. Since 1983, the avian influenza virus ("AIV") has been
widespread in the United States and in Mexico. In the past we have experienced
limited outbreaks of various diseases that have resulted in higher mortality
rates.

     Meat and eggs are subject to contamination during processing and
distribution. We do not believe that contamination of individual shipments
during distribution would have a material adverse effect on our operations.
Contamination during processing, however, could affect a larger number of our
poultry products and therefore could have a more significant impact on
operations.

     In 2002, we experienced loss of chickens at our Peninsula Complex due to
the effects of Hurricane Isidore. Future hurricanes or other adverse weather
conditions could result in additional losses of inventory and damage to our
plants and equipment. Our facilities near Mexico's coast are most subject to the
risk of severe weather.

     The use of nutritional supplements and possibility of contamination expose
     us to risk of loss of consumer confidence in the chicken industry

<PAGE>

     To reduce contamination, we use specialized feedstock and nutritional
supplements that have been approved by the Mexican government and meet
international industry standards. We cannot assure you, however, that in the
future we will not be materially adversely affected by claims or consumer
concerns arising out of the use of these products in raising our animals.

     Our sales are entirely dependent on consumer preferences, and the loss of
consumer confidence in the products sold by Mexican meat and egg producers as a
result of disease, contamination or other reasons, even if not related to our
own products, could have a material adverse effect on our results of operations.

     We face significant competition from other chicken producers in all of our
     geographic markets and product lines

     We are Mexico's largest chicken producer, but we face significant
competition from other producers in all of the markets in which we sell our
products. In 2002, we accounted for approximately 31.0% of total chicken
production in Mexico. There are two other major vertically integrated chicken
producers in Mexico, which together with Bachoco account for about 52.0% of
Mexican chicken production, with the balance distributed among approximately two
hundred small- and medium-sized integrated and non-integrated producers.

     Each of the two other major companies has substantial financial resources
and strengths in particular product lines and regions. We expect to continue to
face strong competition in every market as our existing or new competitors are
likely to broaden their product lines and extend their geographic coverage.
Accordingly, we cannot assure you that our performance will not be adversely
affected by increased competition.

     We face increased competition from U.S. producers

     In January 2003, import quotas and most tariffs on poultry, eggs and swine
were eliminated, as required by NAFTA. Poultry producers in the United States
have developed extremely low-cost production methods and have been successful in
exporting primarily frozen and further-processed poultry to other countries,
especially in periods of overcapacity in the United States. As tariff barriers
decline under NAFTA, U.S. producers can be expected to increase exports to
Mexico, which could have a material adverse effect on our performance.

     We are a holding company with no substantial operations and depend on our
     subsidiaries for cash flow

     We are a holding company with no substantial operations and, consequently,
we are dependent on dividends and other payments from subsidiaries for virtually
all of our cash flow, including cash flow to pay taxes, service debt, make
equity investments, finance the growth of subsidiaries and pay dividends to
stockholders. Together with Mexican law, our ability to pay dividends may, in
the future, be limited by financial covenants in debt instruments that we, or
our subsidiaries, may acquire.

     Risks Relating to the ADSs, the Units and the Shares

     The Robinson Bours family controls our management and their interests may
     differ from other security holders

<PAGE>

     Certain members of the Robinson Bours family hold the power to elect a
majority of the members of our Board of Directors and have the power to
determine the outcome of certain other actions requiring the approval of our
stockholders, including whether or not dividends are to be paid and the amount
of such dividends. The Robinson Bours family has established two Mexican trusts,
which they control, that together hold 496,500,000 Shares outstanding on
December 31, 2002, including Units and B Units representing approximately 66.3%
of the Series L Shares and 88.9% of the Series B Shares outstanding.

     Future sales of Units by the controlling shareholders may affect prevailing
     market prices for the ADSs and the Units

     The prevailing market prices for the ADSs and the Units could decline if
     either:

     --   the Robinson Bours family were to sell substantial amounts of the
          Units, whether

     --   directly, or

     --   indirectly, through the Mexican trusts through which they hold the
          Units; or

     --   the perception arose that such a sale could occur.

     The protections afforded to minority shareholders in Mexico are different
     from those in the United States

     Under Mexican law, the protections afforded to minority shareholders are
different from those in the United States. In particular, the law concerning
fiduciary duties of directors is not well developed, there is no procedure for
class actions or shareholder derivative actions, and there are different
procedural requirements for bringing shareholder lawsuits. As a result, in
practice it may be more difficult for our minority shareholders of Bachoco to
enforce their rights against us or our directors or our controlling shareholder
than it would be for shareholders of a U.S. company.

     Our bylaws restrict the ability of non-Mexican shareholders to invoke the
     protection of their governments with respect to their rights as
     shareholders

     As required by Mexican law, our bylaws provide that non-Mexican
shareholders shall be considered as Mexicans with respect to their ownership
interests in Bachoco and shall be deemed to have agreed not to invoke the
protection of their governments in certain circumstances. Under this provision,
a non-Mexican shareholder is deemed to have agreed not to invoke the protection
of its own government by asking such government to interpose a diplomatic claim
against the Mexican government with respect to the shareholder's rights as a
shareholder, but is not deemed to have waived any other rights it may have,
including any rights under the U.S. securities laws, with respect to its
investment in Bachoco. If you invoke such governmental protection in violation
of this agreement, your shares could be forfeited to the Mexican government.

     It may be difficult to enforce civil liabilities against us or our
     directors, officers and controlling persons

     We are organized under the laws of Mexico, and most of our directors,
officers and controlling persons reside outside the United States. In addition,
all of our assets and their assets are located in Mexico. As a result, it may be
difficult for investors to effect service of process within the United States on
such persons or to enforce judgments against them. This pertains also to any
action based on civil liabilities under the U.S. federal securities laws. There
is doubt as to the enforceability against such persons in Mexico, whether in
original actions or in actions to enforce judgments of U.S. courts, of
liabilities based solely on the U.S. federal securities laws.

<PAGE>

     Holders of L Shares and L Share ADSs have limited voting rights

     Pursuant to our bylaws, holders of Series L Shares are entitled to vote
only with respect to certain limited matters specified therein.

     Holders of Series L Shares can only vote on certain matters specified in
our bylaws. With regard to those matters, holders of ADRs may instruct the
depositary as to the exercise of the voting rights pertaining to the Series L
Shares constituting the Units represented by the ADSs. Holders of Series L
Shares are generally not entitled to vote in the election of the Board of
Directors, but holders of Series L Shares do have the right to elect or appoint
two directors to the Board, which was reduced in April 2003 to 10 members from
15. The Robinson Bours Stockholders are the beneficial owners of 66.3% of the
outstanding Series L Shares and therefore have the power to elect or appoint the
two directors. In addition, holders of Series L Shares are not entitled to vote
on the declaration of dividends. Under Mexican law and our bylaws, the
declaration, amount and payment of annual dividends are determined at a meeting
of our stockholders by a majority vote of the holders of Series B Shares,
usually on the recommendation of the Board of Directors.

     Non-Mexican shareholders may not be entitled to participate in future
     preemptive rights offerings

     Under Mexican law and our bylaws, if we issue new shares for cash as a part
of a capital increase, we must grant our shareholders the right to purchase a
sufficient number of shares to maintain their existing ownership percentage the
Company ("preemptive rights"). We can allow holders of ADSs in the United States
to exercise preemptive rights in any future capital increase only in one of the
following two circumstances:

     --   we file a registration statement with the Securities and Exchange
          Commission with respect to that future issuance of shares; or

     --   the offering qualifies for an exemption from the registration
          requirements of the Securities Act.

     We make no promises that we will file a registration statement with the
Securities and Exchange Commission to allow holders of ADSs in the United States
to participate in a preemptive rights offering. As a result, the equity
interests of such holders in the Company may be diluted proportionately. In
addition, under current Mexican law, it is not practicable for the depositary to
sell preemptive rights and distribute the proceeds from such sales to ADS
holders.

     Corporate disclosure and accounting in Mexico may differ from other
     countries

     There may be less, or different, publicly available information about
issuers of securities in Mexico than is regularly published by or about issuers
of securities in other countries with highly developed capital markets. In
addition, due to country-by-country differences in accounting and other
reporting principles and standards, our corporate disclosures may differ in
content from disclosures made under other principles and standards, such as U.S.
GAAP.

<PAGE>

ITEM 4.  Information on the Company

General

     We (Industrias Bachoco, S.A. de C.V) have four principal product lines:
chicken, eggs, commercial animal feed and swine. We were incorporated on April
17, 1980. Our headquarters are located at Avenida Tecnologico No. 401, Ciudad
Industrial 38010, Celaya, Guanajuato, Mexico, telephone 011-52-461-6183500.

     We are the largest poultry producer in Mexico. In 2002, we produced
approximately 7.0 million chickens per week and accounted for approximately
31.0% of total chicken production in Mexico. As a vertically integrated
producer, we control virtually all aspects of the production and distribution
process, which enables us to exercise cost controls and to maintain high
standards of quality, service and efficiency. With over 700 production and
distribution facilities dispersed throughout Mexico, our operations include the
following:

     --   preparing feed;

     --   breeding, hatching and growing chickens; and

     --   processing, packaging and distributing chicken products.

     Sales of chicken products accounted for 80.9% of our net sales in 2002.

     We are also a significant producer of commercial animal feed. We sell our
feed both through distributors and directly to small producers. We began
producing feed in 2000 as a result of the acquisition of 100% of the stock of
Grupo Campi, S.A. de C.V. ("Grupo Campi") on December 22, 1999 for Ps.1,455.3
million.

     Operating principally in southeastern Mexico and the Yucatan Peninsula,
Grupo Campi was the fourth largest chicken producer in Mexico and an important
producer of animal feed. In 2002 we sold approximately 6,250 tonnes of feed per
week, which amounted to 6.9% of our total sales for that year.

     In February of 2001, we reached an agreement with Avicola Cotaxtla, a
broiler producer located in Veracruz, with a capacity of approximately three
million chickens per cycle. The agreement was in a part a lease of assets and in
part a contract grower agreement. As a result of this agreement, we strengthened
our presence in this region of the country.

     In September 2001, we acquired most of the assets of the egg operations of
both Avicola Nochistongo and Avicola Simon Bolivar, two important producers of
eggs in Mexico. With these acquisitions we emerged as the largest producer of
eggs in Mexico: we now produce approximately 3.5 million dozen eggs per week. We
are an innovator in packaging and marketing eggs. Egg sales accounted for 9.4%
of our net sales in 2002.

     We also sell swine on the hoof to meat packers for pork product production.
In 2002, sales of swine accounted for 0.9% of our net sales.

     The remaining portion of our net sales in 2002 consisted of miscellaneous
poultry-related products.

     The following table sets forth, for each of the periods presented, the
volume of chicken, feed, eggs and swine that we sold.

<PAGE>

<TABLE>
<CAPTION>
<S>                                       <C>             <C>            <C>            <C>           <C>
                                                               Bachoco Sales Volume
                                                            (in thousands of tonnes)

                                                               Year Ending December 31,
                                           -----------------------------------------------------------------
                                            1998           1999           2000           2001          2002
                                           ------         ------         ------         ------        ------

Chicken..............................      354.2          415.7          601.1          662.2         665.4
Eggs.................................       63.1           67.5           70.0           85.6         131.6
Swine................................       11.2            9.5            9.0            9.0           9.0
Feed.................................          0              0          292.4          346.0         324.6
</TABLE>


     Due to acquisitions, internal growth and improved efficiency, the volume of
chicken we sold in 2002 showed an increase of 87.9% over the volume we sold in
1998 (compared to an increase of 37.9% in chicken production in Mexico overall).
Over the same period, our share of overall Mexican chicken production increased
from 22.3% to approximately 31.0%. We improved the efficiency of the facilities
we acquired to take full advantage of production capacity and distribution
opportunities.

     The Mexican poultry industry varies regionally, and few producers operate
in multiple regions. We believe we have the broadest geographic market coverage
in the Mexican poultry industry and that we are one of the largest poultry
suppliers in the Mexico City metropolitan region (which accounts for a
significant portion of overall Mexican chicken consumption). We currently sell
in every major product category and channel of distribution for poultry products
within the regions that we serve. We expect to continue to do so in order to
meet growing consumer demand.

Background and Ownership Structure

     Founded in 1952 by the Robinson Bours family as a small commercial egg
operation in the state of Sonora, we grew by expanding our existing facilities
and acquiring additional facilities from other poultry producers. In 1974, we
established operations in Celaya, located in the agricultural region of Bajio,
to begin serving the Mexico City metropolitan region. Beginning in 1988, our
management recognized the potential for growth in Mexican chicken consumption,
as well as the advantages of a large, vertically integrated operation. As a
result, we began to seek opportunities for geographic expansion and to increase
production capacity and market share. We extended our market coverage
(particularly in 1993 and 1994) by purchasing fixed assets and inventory from
major regional producers that faced financial difficulties. Following each
acquisition, we made substantial investments to apply our production and
distribution methods and reap the benefits of vertical integration and economies
of scale, improving the performance of the acquired facilities.

     In April 1995, members of the Robinson Bours family with ownership
interests in Bachoco (the "Robinson Bours Stockholders") created a trust (the
"Control Trust"), the principal purpose of which is to hold a controlling
interest in our Series B Shares. Our common stock ("Common Stock") consists of
Series B Shares ("Series B Shares") and Series L Shares of limited voting stock
("Series L Shares") (collectively, the "Shares"). The Shares are grouped into
units. Each Unit ("Unit") consists of one Series B Share and one Series L Share.
Each B Unit ("B Unit") consists of two Series B Shares. The Shares constituting
each Unit or B Unit will not be separable until September 2007, at which time
the Units and B Units will automatically separate into their component shares.

     In September 1997, we made an initial public offering of Units representing
17.25% of the outstanding Shares. Following such offering, the Control Trust
held Units and B Units representing 68.0% of the outstanding Series B Shares. As
of December 31, 2002, the Robinson Bours Stockholders owned Units and B Units
representing 89.0% of the Series B Shares outstanding. As a result, the Robinson
Bours Stockholders continue to have the power to control our Company.
<PAGE>

     Members of the Robinson Bours family, together with certain of our
executive officers, hold a majority of the seats on our Board of Directors. In
April 2002, Javier Robinson Bours Castelo assumed the position of Chairman of
the Board of Directors, replacing Enrique Robinson Bours Almada.

     In November 1998, we approved a stock repurchase plan (the "Repurchase
Plan"), under which we may repurchase up to 3% of the total Shares outstanding
and trading on the Mexican Stock Exchange (Bolsa Mexicana de Valores), in
accordance with Mexican securities laws. To execute the Repurchase Plan, we
created a reserve of Ps.249.0 million (expressed in constant pesos as of
December 31, 2002), which reduced retained earnings on our balance sheet. As of
May 17, 2003, we had repurchased 1,874,300 Units, representing 0.62% of the
total shares outstanding.

     On December 22, 1999, we acquired 100% of the stock of Grupo Campi for
Ps.1,455.3 million. The fourth largest chicken producer in Mexico and an
important producer of animal feed, Grupo Campi operates principally in the
southeastern region of Mexico and the Yucatan Peninsula. We made this
acquisition as part of our overall strategy to extend our distribution network
to cover the southern part of Mexico. Because the Grupo Campi production centers
are located in a region where we can grow broilers efficiently, we also added
two new complexes there. We have now completed the coordination and integration
of the operations at these new complexes with the operations at the rest of our
complexes.

     On September 20, 2001, we acquired most of the assets of the eggs business
of Avicola Nochistongo, one of the ten largest producers of eggs in Mexico with
operations located in the La Laguna region in north-central Mexico and a
capacity of about 3 million laying hens.

     At the end of September 2001, we acquired most of the assets of Avicola
Simon Bolivar, one of the fifteen largest producers of eggs in Mexico and a
producer of broilers, with operations located in the La Laguna region in
north-central Mexico with a production capacity of about 2 million laying hens
and approximately 120,000 chickens per week. The assets we acquired included
farms, a feed mill, a processing plant and several distribution centers.

     With these acquisitions we have become the largest producer and distributor
of eggs in Mexico with a market share of approximately 8.0% in terms of volume,
and we have also reinforced our leading position in the broiler industry in
Mexico.

Business Strategy

     Over the past decade we have substantially increased our chicken
production, establishing ourselves in every major product category and
distribution channel for chicken and expanding to cover a geographic market in
Mexico that is more widespread than any other chicken producer. We have also
increased the efficiency of our production process and built a reputation for
the freshness of our chicken products and quality of our customer service.

     The Mexican poultry industry has experienced considerable consolidation in
recent years, in which we have participated. We continue to evaluate possible
acquisitions of other poultry producers or production facilities from time to
time and may pursue certain opportunities consistent with our business strategy.

<PAGE>

     The key elements of our business strategy are as follows:

     --   Increased market penetration through expanded distribution. We have an
          extensive distribution network, supported by our own transportation
          fleet, superior knowledge of existing wholesale channels and
          strategically located cold storage warehouses and facilities. Since
          1992, we have substantially increased our distribution routes. We plan
          to continue to develop and improve our distribution network and
          systems in every product category and throughout our expanded
          geographic coverage in Mexico.

     --   Increased service and market responsiveness. We seek to remain a
          leader in the Mexican poultry market by maintaining high standards of
          customer service and continuing to be responsive to the changing needs
          of varying market segments. As part of this strategy, we have
          structured our operations in such a way as to enable us to vary the
          size, weight and color of our chicken products, depending upon the
          particular demands of the market segment. In addition, we have
          decentralized order and sales services from our headquarters to our
          cold storage warehouses and facilities, which serve as mid-points in
          the distribution chain to wholesalers and local customers. This
          strategy allows us to stay closer to our customer base and to better
          cultivate growing customer segments, such as food-service operators,
          supermarkets and food wholesale clubs.

     --   Low-cost production and operating efficiency. We are among Mexico's
          lowest-cost producers and distributors of chicken, due in part to
          economies of scale and vertically integrated operations. We pursue
          on-going programs to increase operating efficiencies and reduce
          operating costs.

     --   Continued brand differentiation. We have developed a brand image for
          premium fresh chicken and eggs in Mexico. Building on the success of
          our branded products to date, we seek to continue to promote our brand
          name through billboards, packaging, special publicity campaigns and
          through development of brand loyalty among wholesale and retail
          distributors.

Capital Expenditures

     Over the last three years, we have financed our capital expenditures with
resources generated by our operations. We made the following capital
expenditures during the last three years:

     --   In 2000, we made net capital expenditures of Ps.253.7 million, with
          which we:

          --   updated processing plants;

          --   increased capacity for further process products production;

          --   improved and increased our distribution network; and

          --   updated our transportation fleet.

     --   In 2001, we made net capital expenditures of Ps.576.5 million, with
          which we:

          --   financed the asset acquisitions of Avicola Nochistongo, one of
               the 10 largest egg producers in Mexico with operations in La
               Laguna area and of Avicola Simon Bolivar, one of the 15 largest
               egg producers in Mexico and a producer of chicken;

          --   continued to update our transportation fleet, processing plants
               and feed mills; and

          --   improved our egg production farms.

<PAGE>

     --   In 2002, we made net capital expenditures of Ps.264.0 million, with
          which we:

          --   continued to update our transportation fleet, farms, processing
               plants and feed mills;

          --   improved our distribution network; and

          --   increased production capacity in our Northwest Complex, which is
               located in Culiacan.

Business Overview

Chicken Market

     Mexican consumers value distinct characteristics in their chicken.
Virtuall, all chicken sold by us and other major chicken producers in Mexico is
fresh. Fresh chicken is a central ingredient in many traditional Mexican dishes
and the leading meat consumed in Mexico according to data from Union Nacional de
Avicultores ("UNA"). Further-processed chicken, such as heat-and-serve products,
frozen dinners, chicken nuggets and other similar foods, has found limited
acceptance among Mexican consumers due to historical consumer preferences for
fresh chicken and the fact that many Mexicans have limited freezer capacity and
limited access to microwave or other types of ovens.

     In the last three years, we have noticed an increased preference although
limited, among Mexican consumers for further-processed fresh chicken
products--mostly marinated and pre-formed chicken products. We participate
significantly in the provision of these products. We estimate that
further-processed chicken products currently account for approximately 4.0% of
the chicken sold in Mexico.

     Mexican consumers also generally prefer chicken with pronounced yellow skin
pigmentation, a characteristic found mainly in our public-market and
supermarket-broiler chicken products that we attain by including marigold
extract in our chicken feed. We have also noticed an increased demand for
smaller, whole, fresh chicken from various fast-food outlets, principally
chicken roasting shops (rosticerias and asaderos), which have developed rapidly
in recent years.

     According to data obtained from the UNA, total Mexican chicken consumption
per capita increased by 28.3% from 1998 to 2002. Chicken is the leading meat
consumed in Mexico, and it accounted for approximately 45.1% of all meat
produced in Mexico in 2002. The following table sets forth total Mexican
production of chicken, pork and beef for 1998 to 2002.
<TABLE>
<CAPTION>
<S>                                                         <C>        <C>        <C>          <C>        <C>

                                                              Mexican Production of Chicken, Beef and Pork
                                                                         (in thousands of tonnes)*

                                                            1998        1999       2000        2001        2002
                                                           ------      ------     ------      ------      ------
Chicken..............................................       1,587       1,784      1,936       2,067       2,187
Beef.................................................       1,375       1,390      1,408       1,428       1,451
Pork.................................................         950         994      1,034       1,065       1,085

*Sources: UNA for chicken and beef; USDA for pork.
</TABLE>

<PAGE>

     The Mexican chicken industry, like chicken industries in other countries,
is characterized by a long-term decline in real prices in conjunction with
cyclical periods of higher profitability leading to overproduction followed by
periods of lower prices and lower profitability. Prices fell in real terms, in
1997, 1998 and 1999. The price recovered slightly in 2000 due to reduced supply
in the first part of the year. During 2001, chicken prices declined as a result
of excess supply during the first half of the year, the economic slowdown
experienced by the country at the end of the year and a decrease in the cost of
the main feed ingredients. In 2002, chicken prices increased slightly by
approximately 2.5% over 2001, as a result of the worldwide increase in the cost
of feed ingredients at the end of the year. We believe that Mexican chicken
prices may decline further in real terms and that prices for chicken may also
vary cyclically.

     We believe that changes in Mexican chicken consumption correlate closely
with changing chicken prices and their effects on consumer purchasing power. In
1993 and 1994, when chicken prices were stable or declined only slightly, growth
in consumption was relatively slow. In 1995, when supply increased and real
prices fell, chicken consumption increased by 8.8%. Many smaller producers went
out of business during the economic crisis, causing supply to contract and
prices to rise in 1996 and resulting in a 2.2% decrease in chicken consumption.
Chicken consumption increased by 6.3%, 12.4%, 8.5%, in 1998, 1999 and 2000
respectively, due to declines in chicken prices, an increase in supply and
improved economic conditions in Mexico. Consumption increased further by 6.7% in
2001 due to further declines in chicken prices and increased supply. The trend
in increased consumption continued in 2002 with an increase of 5.8% due to
increased supply.

Chicken Products

     Five principal product categories exist for fresh chicken in Mexico: live,
public market, rotisserie, chicken parts and supermarket broiler.

     "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. According
     to UNA, live chicken accounts for approximately 29.0% by volume of the
     chicken sold by producers in Mexico.

     "Public market" chicken is a whole broiler presented uneviscerated,
     generally sold within 48 hours after slaughter in public markets throughout
     Mexico, but primarily concentrated in the Mexico City metropolitan region.
     According to UNA, public market chicken accounts for approximately 27.0% by
     volume of the chicken sold by producers in Mexico.

     "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 (rosticerias 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. According to UNA, rotisserie
     chicken accounts for approximately 25.0% by volume of the chicken sold by
     producers in Mexico.

     "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 generally sell
     directly to the supermarket chains and deliver the chicken directly to the
     outlet. Sales to the institutional market often require customized cutting
     and presentation. According to UNA, chicken parts account for approximately
     10.0% by volume of the chicken sold by producers in Mexico.

     "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. Mexican consumers' preference for freshness requires regular
     deliveries of chicken to supermarkets and other food shops. According to
     UNA, supermarket broiler chicken accounts for approximately 5.0% of the
     volume of the chicken sold by producers in Mexico.

<PAGE>

     We also sell further-processed chicken products to supermarkets and other
retailers. The following table sets forth, for the periods indicated, the sales
volume in tonnes and as a percentage of the total volume of chicken sold for
each of our principal lines of chicken products.
<TABLE>
<CAPTION>
<S>                     <C>      <C>       <C>     <C>       <C>     <C>       <C>     <C>       <C>     <C>

                                                         Year Ended December 31,
                         ---------------------------------------------------------------------------------------
                              1998              1999              2000              2001              2002
                         ---------------   ---------------   ---------------   ---------------   ---------------
                         Volume   % of     Volume   % of     Volume   % of     Volume   % of     Volume   % of
                         ------   Total    ------   Total    ------   Total    ------    Total   ------   Total
                                  ------            ------            ------            ------            ------
                                                 (thousands of tonnes, except percentages)

Public Market and         229.7    64.8%    266.1    64.0     336.4    56.0     339.3    51.3     307.1    46.2
 Rotisserie...........
Supermarket Broiler,       99.9    28.2     110.0    26.5     138.7    23.0     151.3    22.8     191.6    28.8
   Chicken Parts and
   Other(1)...........
Live..................     24.7     7.0      39.7     9.5     126.0    21.0     171.6    25.9     166.7    25.0
Total.................    354.2   100.0%    415.8   100.0%    601.1   100.0%    662.2   100.0%    665.4   100.0%
                         ======   ======   ======   ======   ======   ======   ======   ======   ======   ======

(1)  "Other" comprises sales of further-processed poultry products, viscera and other products.
</TABLE>

     Our product mix varies from region to region, reflecting different
consumption and distribution patterns. Based on market demand, we believe that
fresh, rather than frozen, chicken will continue to dominate the Mexican market.
Furthermore, we believe that consumer demand for value-added fresh chicken
products, such as rotisserie chicken, supermarket broilers and chicken parts,
will increase over time. Accordingly, we continue to focus principally on
producing fresh chicken, including value-added fresh chicken products.

Chicken Marketing, Sales and Distribution

     We have developed an extensive distribution system that we believe is the
largest and most modern of any chicken or egg producer in Mexico. We use various
distribution channels in every major product category to service different
market segments. For example, in the Mexico City area, we transport most public
market chicken directly to wholesalers, who then transport the chicken to retail
sellers. We use our own fleet to transport the majority of rotisserie chickens,
supermarket broilers and other chicken products to our customers. We try to
cooperate with existing distribution channels and do not compete with wholesale
distributors, except in areas where we supply our own distribution capacity
where needed for market penetration.

     We distribute products from our seven processing plants (located in Celaya,
Culiacan, Puebla, Lagos de Moreno, Coatzacoalcos, Merida and Gomez Palacio) to
our cold-storage facilities and warehouses, which serve as a mid-point in
distribution to wholesalers and local customers. From our cold-storage
facilities, we service wholesalers (who in turn deliver to their customers) and
transport certain products directly to supermarkets and food-service operations.
Our distribution infrastructure includes 60 cold-storage warehouses and
facilities and a large fleet of vehicles. The decentralized sales force permits
us to remain attuned to developments in the regions we serve and to develop
close relationships with customers.

<PAGE>

     Through recent acquisitions and production agreements, we have expanded our
distribution network, which now covers almost all of Mexico:

     --   At the end of 1999, we strengthened our distribution network by
          acquiring Grupo Campi. The acquisition consolidated our presence in
          the southeastern region of Mexico and made new markets accessible,
          including the Yucatan Peninsula.

     --   In 2001, through an agreement with Avicola Cotaxtla, a broiler
          producer located in Veracruz, we strengthened our presence in that
          important region of the country.

     --   By means of the acquisition of most of the assets of both Avicola
          Nochistongo and Avicola Simon Bolivar in September 2001, we further
          expanded and consolidated our distribution network, mainly in the
          northeastern part of the country.

     --   In 2002, we consolidated our presence in the northeastern part of the
          country, mainly in the state of Nuevo Leon, due to the consolidation
          of our recent acquisitions, made at the end of 2001.

     In the following paragraphs we provide a description of our marketing,
sales and distribution strategies for each of our major chicken products.

     --   Live chicken - We sell live chicken primarily to wholesalers, which
          contract out the processing to independent slaughterhouses and then
          resell the processed product as public market chicken. To a lesser
          extent, we sell to small independent slaughterhouses in the southeast,
          where live chicken continues to be the standard for consumption.
          Additionally, customers can purchase live chicken directly from us on
          our farms. However, we believe that the market as a whole is moving
          away from live chicken.

     --   Public market chicken - We believe that we are the largest producer of
          public market chicken in Mexico. This is supported by information
          published by UNA and our own internal information. We regularly sell
          to more than 50 of the approximately 200 whole fresh chicken
          wholesalers operating in the Mexico City region. Most of our wholesale
          customers rely primarily on us for public market chicken, although we
          have no exclusive supply agreements. Our principal focus in this
          market has been to provide superior distribution and service to
          selected wholesalers in order to maintain and further develop loyalty.
          Public market chicken is ordinarily sold to consumers without any
          packaging or other identification of the producer, but our
          distribution system encourages wholesalers to sell to retailers from
          our own "Bachoco" trailers, reinforcing our reputation for freshness
          and efficiency of service and fostering brand loyalty among retailers.
          We believe we have developed excellent relationships with the
          wholesalers we serve.

     --   Rotisserie chicken - Rotisserie chicken has been one of our fastest
          growing products since we first started producing it in 1988. We sell
          rotisserie chicken directly to rosticerias, asaderos and supermarkets.
          We attribute the growth in our sales of rotisserie chicken in large
          part to the rapid growth of the market for freshly cooked chicken sold
          by rosticerias and asaderos and in the rotisserie sections of
          supermarkets. We expect this market to continue to grow because of an
          ever-increasing consumer demand for convenient, low-priced and
          high-quality fast food. Success in supplying rotisserie chicken
          depends on consistency and good service, and only larger producers
          with more modern processing facilities and distribution capacity can
          compete in this market. We increased our market share by consistently
          providing high-quality products and by using our own trucking fleet to
          deliver directly to retailers on a punctual and dependable basis. We
          expect to expand sales of rotisserie chicken by leveraging our
          increasingly developed transportation and distribution network.

<PAGE>


     --   Supermarket broiler chicken - We sell supermarket broilers, as well as
          chicken parts and eggs, directly to the principal supermarkets,
          convenience store chains and wholesale clubs in Mexico. In order to
          build consumer loyalty for our supermarket broiler chicken, we
          emphasize our brand image as well as our superior service, reinforced
          by frequent delivery to ensure freshness. Each chain negotiates
          purchases centrally, but we deliver directly to every point of sale,
          ordinarily at least once every 48 hours. We believe that we lead the
          market in frequency of deliveries to supermarkets.

     --   Chicken parts - We sell chicken parts principally to supermarkets,
          using the same marketing strategy that we use for supermarket broiler
          chicken. We are also an important supplier of chicken parts to the
          growing franchise fast-food and institutional food-service industries.
          We continue to develop custom-cutting processes to help meet demand
          from fast-food and institutional customers for a wider variety of
          chicken parts.

     --   Frozen and further-processed poultry

          --   Frozen, heat-and-serve and other further-processed poultry
               products make up only a small proportion of total Mexican poultry
               consumption today. Mexican consumers have a greater preference
               for fresh chicken than their U.S. counterparts, and they are less
               likely to have refrigerators or microwave or regular ovens needed
               to store and cook frozen and processed poultry. However, the
               potential for substantial growth in this market is large, and we
               believe that our distribution network, our large market share for
               supermarket chicken sales, our brand name and our experience in a
               wide range of existing Mexican distribution channels will be
               important competitive strengths in this area.

          --   Our 2002 sales of fresh further-processed poultry products grew
               more than 30% over 2001 sales. We are moving to produce and
               introduce various fresh further-processed poultry products in
               Mexico, which we have developed in accordance with Mexican
               customer preferences. We will continue to do so as this market
               grows.

Eggs

     Annual per capita egg consumption in Mexico is relatively high compared to
other countries. In 2002, annual per capita consumption of eggs in Mexico was
approximately 20.2 kg., or approximately 350 pieces, according to data from UNA.
Mexican egg consumption per capita increased 12.8 % from 1998 to 2002. This high
level of consumption is due in part to the fact that eggs are a relatively cheap
source of protein.

     The Mexican egg industry is more fragmented than the broiler industry but
has experienced some degree of consolidation in the last years, including
acquisitions by our own company. According to UNA, the nine largest producers of
eggs in Mexico now account for approximately 35% of the market. As a result of
our September 2001 acquisitions of Avicola Nochistongo and Avicola Simon
Bolivar, two of the 15 largest egg producers, we have become the largest egg
producer in Mexico with an estimated market share of 8.0% in 2002. Our marketing
strategy for egg products is to increase brand recognition by increasing sales
of cartons with the "Bachoco" brand printed on them. In addition, we aim to
differentiate our eggs by their high quality and freshness.

     Eggs in Mexico have traditionally been distributed in large 360-egg cases
through wholesalers to retailers. The retailers, which are typically small
grocery shops, in turn sell the eggs by weight to consumers. At present,
approximately 22.0% of the eggs sold in Mexico are sold in packaged form, 7% are
sold in processed form and approximately 71% are sold in bulk to wholesalers.
The trend in recent years has been towards packaged egg sales. We expect that
convenience, the development of brand loyalty and the growth of supermarket
chains will contribute to the continuance of this trend toward packaged eggs.

<PAGE>

     We sell both brown and white eggs. Brown eggs presently account for
approximately 9.0% of Mexican egg consumption. The branded carton of brown eggs
is a premium product in the Mexican market. The Company believes that brown eggs
are less vulnerable to price fluctuations than white or unbranded eggs, because
consumers perceive them to be of higher quality. Brown eggs command a small
premium over white eggs. We are by far the leading producer of brown eggs in
Mexico and estimate that our production accounts for approximately 40.0% of the
Mexican brown egg market and 90.0% of the Mexican branded brown egg market.

     In some regions, however, we have reallocated part of our production from
brown eggs to white eggs due to local market preferences. In addition, the
recently acquired operations of Avicola Nochistongo and Avicola Simon Bolivar
produce mainly white eggs. Our main strategy in the eggs business is to
gradually move from bulk to packaged white eggs. Packaged eggs are less
vulnerable to price fluctuation and create brand loyalty.

     We have designed our egg distribution system to transport eggs from our
laying farms at Celaya, Los Mochis, Ciudad Obregon, Mexicali and La Laguna
regions to customers in all sales regions. We sell packaged eggs directly to all
of the principal supermarket chains in Mexico, with daily deliveries directly to
their outlets.

Feed

     According to CANACINTRA (Camara Nacional de la Industria de
Transformacion), Mexican production of feed increased from 15.5 million tonnes
in 1997 to 21.5 million tonnes in 2001. In 2001, Mexico was ranked the sixth
largest producer of feed in the world and the second largest in Latin America.

     Local production is composed of commercial and integrated manufacturers.
Commercial producers produce for the market, while integrated producers are
large producers that produce for themselves and occasionally for other
producers. Of the 360 registered producers in Mexico, 240 are classified as
integrated and 120 as commercial producers. Integrated producers account for
approximately 65.5% of total production. Imports of feed come almost entirely
from the United States and represent approximately 1.5% of total the consumption
in Mexico.

     We entered the feed business as a result of our acquisition of Grupo Campi
at the end of 1999. We sell to small livestock producers and through a network
of small distributors located mainly in central and southern Mexico. We have
benefited from economies of scale and synergies derived from producing feed both
for our own internal consumption and for sale to third parties. To propel this
business, in 2000 we opened a new mill in the state of Veracruz dedicated
exclusively to producing feed. We estimate that our feed business comprises
approximately 4.7% of the market share of the commercial (non-integrated) feed
business.

Swine and Other

     We purchase breeder swine live from the United States and breed them at
facilities in Navojoa. We then raise swine to maturity at our 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. In 2002, the price of
swine decreased in Mexico mainly due to increased imports from the United States
and the economic slowdown of the Mexican economy. Traditionally, Mexicans
consume less swine and swine products than chicken and other meats. We do not
currently intend to make material investments in this line of business.

<PAGE>


Raw Materials

     We purchase our breeding stock for broilers and layers from high-quality
suppliers. All of our breeder swine currently come from one supplier, but we
have changed suppliers from time to time and have numerous alternative sources
of supply.

     The largest single component of our cost of sales is the cost of
ingredients used in the preparation of feed including, principally, sorghum, soy
meal, corn, fish meal, meat meal and, for certain chicken products, marigold
extract. The price of these ingredients is subject to significant volatility
resulting from weather, the size of harvests, transportation and storage costs,
governmental agricultural policies, currency exchange rates and other factors.
To reduce the potential adverse effect of grain price fluctuations, we vary the
composition of our feed to take advantage of current market prices for the
various types of ingredients used.

     Beginning in 1992, the Mexican government lifted various procedural
restrictions on importing grains, and it is currently eliminating price supports
in favor of direct subsidies for domestic farmers. Under the North American Free
Trade Agreement (NAFTA), the government eliminated the tariff on sorghum
effective January 1, 1994, and eliminated tariffs on all other grains that we
use except corn on January 1, 2003. Corn tariffs will be eliminated by 2008. We
expect these developments to have a positive effect on our cost of production as
the cost of our ingredients more closely track prices in the international
commodity markets.

     At present, we take advantage of lower cost feed ingredients from Mexican
sources, when available. In 2002, we obtained approximately 30.1% of our total
grain needs from the domestic market. We believe that the quality of local feed
ingredients, particularly sorghum, is superior to that of imported feed
ingredients. In addition, the use of local feed ingredients allows us to save on
transportation costs and import duties. However, in southern Mexico where Grupo
Campi's complexes are located, domestic crops and feed ingredients are not
available. As such, these complexes use mainly imported grain.

     Currently, we do not engage in hedging against grain price fluctuations. We
may, from time to time, engage in hedging of our feed costs in the future.

Competition

Chicken

     Although we are Mexico's largest chicken producer, we face significant
competition from other producers in all of the markets in which we sell our
products. When combined with our two largest vertically integrated competitors,
we account for about 52.0% of total Mexican poultry production; the balance is
distributed among approximately two hundred small and medium-sized integrated
and non-integrated producers. Mexico's two other major chicken producers are
Pilgrim's Pride de Mexico, S.A. de C.V., a subsidiary of the U.S. chicken
producer Pilgrim's Pride Corporation; and Trasgo, S.A. de C.V., which since
April 1994 has been controlled by the U.S. chicken producer Tyson Foods, Inc.
The major producers, including Bachoco, have substantial cost advantages over
smaller, non-integrated producers arising from economies of scale and control of
feed preparation. To varying degrees, each of these companies has substantial
financial resources and strengths in particular product lines and regions. We
believe, however, that we have substantial competitive strengths over our
competitors, including a broader range of chicken products and broader
geographic coverage.

<PAGE>

     Furthermore, there are considerable barriers to entry into large-scale
chicken production and distribution in Mexico, including, among others, the
consumer preference for fresh chicken, the weaknesses of transportation
infrastructure and varying regional consumer preferences among the various
product categories. The channels for distribution of chicken products, in
particular, are highly specialized and varied, and they call for in-depth
experience in market practices.

     Nonetheless, we expect that we will continue to face strong competition in
every market and that existing or new competitors are likely to broaden their
product lines and to extend their geographic coverage.

     Poultry producers in the United States have developed low-cost production
techniques and have been successful in exporting primarily frozen and
further-processed poultry to other countries, especially in periods of
overcapacity in the United States. As tariff barriers have declined under NAFTA,
we have experienced increased competition from U.S. poultry producers. According
to UNA, in 2002, imports of chicken, turkey and other poultry decreased by 1.2%
in volume over imports in 2001. This small decrease, which followed a period of
strong growth in imports, was caused in part by short-term effects like
temporary bans of imports by sanitary and health authorities, and is expected to
be reversed in future periods. Mechanically de-boned poultry accounted for
approximately 46.1% of the imports.

     We expect that competition from U.S. exporters will continue to increase.
However, Mexican consumer acceptance of frozen or frozen further-processed
poultry products is low, and we do not anticipate that it will grow
significantly in the near future or that fresh chicken can be distributed
throughout Mexico from processing facilities in the United States in a
cost-effective fashion.

Eggs

     We are the largest producer of eggs in Mexico, with approximately 8.0% of
total Mexican egg production at the end of 2002. According to UNA, the second
largest producer accounted for approximately 7.9% of total Mexican egg
production, and the top nine producers together accounted for approximately
35.0% of total Mexican egg production, with the balance distributed among
hundreds of smaller producers.

Feed

     Of the 360 registered producers of feed in Mexico, 240 are classified as
integrated and 120 as commercial producers. Integrated firms produce
approximately 65.5% of total production for their internal use, and the
remaining 34.5% is produced for sale to third parties. We estimate a market
share of approximately 5.0% in our feed product line.

Swine

     The Mexican swine industry is highly fragmented, and no producer has more
than 2.5% of the market. On December 31, 2002, we had less than 1.0% of the
Mexican market share in swine. U.S. producers already compete in this market in
Mexico because tariff barriers are moderate.

<PAGE>

Mexican Regulation

Mexican Import Regulation and Price Controls

     NAFTA became effective on January 1, 1994. Prior to NAFTA, the Mexican
poultry and egg markets were protected from foreign imports by a licensing and
quota system. Under NAFTA, Mexico implemented a transitional tariff rate quota
system for imports of poultry, eggs and swine from the United States. U.S.
exports to Mexico were duty-free up to the quota amount and were subject to an
ad valorem tax on all imports above that amount. As required by NAFTA, the
Mexican government eliminated all permanent quotas and tariffs on poultry, eggs
and swine in January 2003. With certain specific exceptions described below,
there are now no quotas or tariffs on imports of poultry, eggs and swine from
the U.S. We expect the elimination of these trade protections to stabilize the
level of imports over time and to permit improved private control over imports,
which may result in increased competition from importers.

     The pre-2003 scheme of quotas and tariffs, which has now been eliminated

     --   The quota for chicken was 120.3 thousand tonnes, which represents 5.7%
          of national consumption. Above the quota, imports were taxed ad
          valorem at 49.4%.

     --   Within the chicken quota, there were sub-quotas for whole chicken
          (16.6 thousand tonnes), poultry parts (31.6 thousand tonnes), whole
          turkeys, turkey parts, and de-boned chicken. Imports above the quota
          were also taxed at 49.4%. There was no quota amount for
          further-processed chicken; all imports were taxed at 49.4%.

     --   The quota for eggs was 8.2 thousand tonnes, which is less than 1% of
          national consumption. Imports above the amount were taxed at 9.5% ad
          valorem.

     --   Imports of swine were subject to a quota of 80.3 thousand tonnes of
          fresh, frozen, and chilled meat, but were also taxed 2% on amounts
          below the quota (this tax was 4% in 2001). Amounts above the quota
          were taxed at 10% in 2002.

     Tariffs that remain after January 2003

     The Mexican government has put in place a number of short-term tariffs and
import limits on poultry, eggs and swine:

     --   In January 2003, the Mexican government announced a temporary
          safeguard to stabilize the flow of poultry imports, which included a
          98.8% tariff on imports of chicken leg quarters. This temporary import
          limit should either be confirmed or canceled later in 2003. All other
          chicken products from the United States, including whole chicken,
          chicken parts other than leg quarters and eggs remain tariff-free.

     --   In the second half of 2002, Mexico imposed a ban on chicken and egg
          products from California, Arizona and certain other parts of the
          United States as a result of disease problems in those areas.

     --   In October 1999, Mexico imposed an anti-dumping compensatory duty of
          U.S.$ 0.351 per kilogram (48% ad valorem) on swine and pork imports,
          in addition to the import tariff. The Mexican government announced the
          elimination of this duty on May 23, 2003.

<PAGE>

     In addition to NAFTA, Mexico has entered into free trade agreements with
several other countries including Chile, Europe, Colombia and Venezuela.
Although such agreements may result in lower tariffs on our own products, we
believe that imports from such countries will not increase substantially in the
future due to high transportation and distribution costs.

Antitrust Regulations

     The Mexican Economic Competition Law (Ley Federal de Competencia
Economica), which took effect on June 22, 1993, regulates monopolies and
monopolistic practices. Under this law, all companies (including Bachoco) are
required to notify the Federal Competition Commission (Comision Federal de
Competencia) of all proposed transactions exceeding specified threshold amounts
as set forth in the Mexican Economic Competition Law. The Federal Competition
Commission can impose conditions on, and prevent or unwind any such transactions
by Mexican companies. We have complied with all requirements under this law.

Environmental and Sanitary Regulation

     Our operations are subject to Mexican federal and state laws and
regulations relating to the protection of the environment. The principal laws
are the General Law of Ecological Balance and Environmental Protection (Ley
General de Equilibrio Ecologico y Proteccion Ambiental) (the "Environmental
Law") and the Law of National Waters (Ley de Aguas Nacionales). The Ministry of
Environment and Natural Resources (Secretaria del Medio Ambiente y Recursos
Naturales or "Semarnat"), administers the Environmental Law, and the National
Water Commission (Comision Nacional del Agua) administers the Law of National
Waters.

     The Environmental Law regulates water pollution, air pollution, noise
control and hazardous substances. Semarnat can bring administrative and criminal
proceedings against companies that violate environmental laws, and after certain
administrative procedures, it also has the power to close non-complying
facilities. Every company in Mexico is required to provide Semarnat with
periodic reports regarding compliance with the Environmental Law and the
regulations thereunder.

     The level of environmental regulation in Mexico has increased in recent
years, and enforcement of the law is improving. We expect this trend to continue
and to intensify with international agreements between Mexico and the United
States.

     In particular, Mexican environmental laws set forth standards for water
discharge that are applicable to poultry processing operations. Our processing
plants have water treatment facilities that comply with Mexican environmental
standards. We are implementing other investment projects in anticipation of
stricter environmental requirements in the future. We do not expect that
compliance with those Mexican environmental laws or Mexican state environmental
laws will have a material effect on our financial condition or performance.

     The production, distribution and sale of chicken, eggs and swine are
subject to Mexican federal and state sanitary regulations. The principal
legislation is the General Health Law (Ley General de Salud) and the Federal
Animal Health Law (Ley Federal de Sanidad Animal). The Federal Animal Health Law
was enacted in 1993, and, since then, we have been working closely with Mexican
Government to develop regulatory standards and inspection methods for chicken
processing. Currently, Mexican authorities do not monitor production or inspect
products to the same degree as sanitary authorities in other countries, such as
the USDA in the United States. However, we believe that we are in compliance
with all applicable sanitary regulations.

<PAGE>


Organizational Structure

     We are a holding company with no operations other than holding the stock of
our subsidiaries and engaging in transactions with our subsidiaries. Our
principal operating subsidiary is BSACV, which owns our principal operating
assets, and which accounted for 95.3% of consolidated total assets at December
31, 2002, and 93.0% of consolidated revenues for the year ended December 31,
2002.

The following table shows our main subsidiaries as of December 31, 2000, 2001
and 2002:
<TABLE>
<CAPTION>
<S>                                                                      <C>        <C>           <C>

                                                                            Percentage equity interest
                                                                         -------------------------------
                                                                          2000        2001         2002
                                                                         -------------------------------
Bachoco, S.A. de C.V. ("BSACV")                                            100%        100%         100%
Operadora de Servicios de Personal, S.A. de C.V.                           100         100          100
Servicios de Personal Administrativo, S.A. de C.V.                         100         100          100
SECBA, S.A. de C.V.                                                        100         100            0
SEPETEC, S. A. de C.V.                                                     100         100          100
Acuicola Bachoco, S.A. de C.V.                                             100         100          100
Huevo y Derivados, S.A. de C.V.                                             97          97           97
Pecuarius Laboratorios, S.A. de C.V.                                        64          64           64
Aviser, S.A. de C.V.                                                       100         100          100
Campi Comercial S.A. de C.V.                                               100         100          100
</TABLE>


     In April 2002, we sold our subsidiary, Secba, S.A. de C.V., for Ps.5.1
million to a related party, generating a gain of Ps.0.7 million. Secba, S.A. de
C.V., however, continues to render administrative services to us. The effects of
the spin-off of this subsidiary are immaterial to our business operations.

     Shares of the consolidated operating subsidiaries that are not owned by
Bachoco represent immaterial ownership interests of local farmers.

Property, Plants and Equipment

     Our production and storage facilities are located throughout the regions we
serve in order to ensure freshness and minimize transportation time and costs.
The most extensive facilities are grouped in seven complexes that include farms
and processing plants. The largest of our complexes is in Celaya, where we have
broiler grow-out farms, a broiler processing plant and egg production farms. The
complex at Culiacan includes broiler grow-out farms and a broiler processing
plant, as do the complexes located in Puebla, Lagos de Moreno, Coatzacoalcos and
Merida. There are smaller egg production farms at Los Mochis, Ciudad Obregon and
Mexicali. As a result of the acquisitions made in the second half of 2001, a new
complex was formed in Gomez Palacio, Durango (in La Laguna Region). The complex
consists of broiler grow-out farms, a broiler processing plant and egg
production farms representing more than half of our total egg production
capacity.

     The Company also announced that the repair of its Peninsula Complex is on
schedule and it hopes to reach the capacity it had before the damage caused by
Hurricane Isidore at the end of 2003. The Company will increase its capacity at
the complex by an additional 100% to produce up to 750,000 chicks per week by
the end of this year.

     The Company will immediately begin to expand its processing plant located
in Merida Yucatan to be able to process the new production levels.

<PAGE>


     The following table summarizes the types and number of each type of our
     production facilities:
<TABLE>
<CAPTION>
<S>       <C>            <C>                                                                 <C>

                          Bachoco Production Facilities

                                                                                              Number
          Type                                                                                ------
          Chicken breeding farms........................................................        165
          Broiler grow-out farms........................................................        437
          Broiler processing plants.....................................................          7
          Egg incubation plants.........................................................         17
          Egg production farms..........................................................         96
          Swine breeding farms..........................................................          1
          Swine grow-out farms..........................................................         10
          Feed plants...................................................................         15
</TABLE>

     On September 22nd, Hurricane Isidore hit the Yucatan Peninsula and affected
approximately 60% of our chicken growing farms in the region. The remainder of
our facilities, such as the poultry processing plant, feed mills, breeder farms
and incubator plants suffered minor damages.

     The chicken growing farms in this region represent approximately 7% of our
total capacity in our chicken business. We were able to divert products from
other facilities to maintain a level of service to our customers in this region.

     We expect to complete reconstruction on the last of the farms at the end of
2003, at which point the entire Peninsula complex will resume its original
production levels.

     We currently operate 15 feed plants for our own chickens, feed sales to
third parties and egg and swine operations. The total production capacity of our
feed plants is approximately 290,000 tonnes per month. We estimate that we are
the largest producer of animal feed in Mexico.

     Our other facilities include two poultry manure-processing plants, two
experimental farms where Bachoco conducts limited research and development
activities, and facilities for the production of animal vaccines and medicines,
some of which are sold to third parties. Our headquarters are located in Celaya,
and we have 60 sales centers throughout the regions we serve. While we own most
of our facilities, we lease a limited number of farms and sales centers. We also
employ a network of contract growers.

     Our fleet of trucks carries feed from feed mills to farms, live chicken
from farms to processing plants, day-old chickens from egg incubation plants to
farms, eggs from farms to distribution centers and, ultimately, products from
distribution centers to customers.

ITEM 5. Operating and Financial Review and Prospects.

     The following discussion should be read in conjunction with our
Consolidated Financial Statements. The Consolidated Financial Statements have
been prepared in accordance with Mexican GAAP, which differs in certain respects
from U.S. GAAP. Note 17 to the Consolidated Financial Statements provides a
description of the principal differences between Mexican GAAP and U.S. GAAP, as
they relate to us, and a reconciliation to U.S. GAAP of total stockholders'
equity, net income and operating income, and a condensed statement of cash flows
under U.S. GAAP as of December 31, 2001 and 2002 and for the years ended
December 31, 2000, 2001 and 2002.

<PAGE>

     In accordance with Mexican GAAP rules on price-level restatement of
financial statements, the financial statements included with this disclosure
recognize certain effects of inflation. In addition, the financial statements
and, unless otherwise specified, the other financial data included herein are
restated in constant pesos as of December 31, 2002. The effects of price-level
restatement in accordance with Mexican GAAP have not been reversed in the
reconciliation to U.S. GAAP.

General

     In the following discussion we describe various trends and how they
affected our results of operations for the years ended December 31, 2000, 2001
and 2002.

Mexican Economic Conditions

     In 2000, according to statistics from Banco de Mexico and the Secretaria de
Hacienda y Credito Publico (the "Ministry of Finance"), Mexico's gross domestic
product grew 6.9%. Interest rates on 28-day Cetes decreased to an average of
15.2%, inflation decreased to a rate of 9.0% and the peso appreciated against
the U.S. dollar by approximately 1.4%. During 2001, the Mexican economy was
affected by a global economic slowdown, and in particular by the downturn in the
United States economy in the aftermath of the terrorist attacks on September 11,
2001. As a result, in 2001, gross domestic product in Mexico fell by 0.3%.
Interest rates on 28-day Cetes decreased to an average of 11.3% (6.3% in the
last month of the year), inflation decreased to a rate of 4.4% and the peso
appreciated against the U.S. dollar by 5.0%.

     During 2002, the Mexican economy continued to be sluggish due to the
effects on Mexico of the continuing slowdown in the United States economy.
Mexican gross domestic product increased 0.9% in 2002. Financial markets in
Mexico remained relatively stable most of the year, experiencing an increase in
volatility in the last quarter. Interest rates on 28-day Cetes in 2002 decreased
to an average of 7.3%, inflation increased to a rate of 5.7% and the peso
depreciated against the U.S. dollar by 12.2%. Most of the peso depreciation
occurred at the end of the year.

     In addition to the effects that the state of the Mexican economy has on our
business and results of operations, Mexican political events may significantly
affect our operations and the performance of Mexican securities generally. See
Item 3. "Key Information - Risk Factors". A downturn in Mexico's economic
conditions, civil unrest or other adverse social, political or economic
developments in or affecting Mexico could adversely affect our business, results
of operations, financial condition, ability to obtain financing and prospects.

     The Mexican economy and financial and securities markets are, to varying
degrees, influenced by economic conditions in other countries. Economic or
financial conditions in one country or region may undermine investors'
confidence in other countries, such as Mexico, and decrease the attractiveness
of securities investments in such countries. See Item 3. "Key Information - Risk
Factors".

Effects of Economic Conditions on the Company

     Mexican economic conditions have had a strong impact on Mexico's chicken
market. Feed costs constitute a substantial portion of the cost of goods sold
and are priced with reference to U.S. dollars. In 2000, average producer prices
increased by 9.8% in real terms as a result of a supply shortage in the first
part of the year, even though the worldwide costs of feed ingredients declined
and domestic supply increased by 8.5% for the entire year. In 2001, average
producer prices decreased 13.8% due to a decline in the worldwide cost of feed
ingredients, and a 6.7% increase in domestic supply and oversupply conditions.
In 2002, average producer prices increased slightly by 2.5% as a result of a
global increase in the cost of feed ingredients at the end of the year,
partially offset by a slowing economy.

<PAGE>

     We have liabilities denominated in U.S. dollars. On December 31, 2002,
11.5% of our outstanding indebtedness of Ps.241.0 million was denominated in
U.S. dollars, as compared to 11.5% on December 31, 2001. Our assets are
primarily denominated in pesos. Due to our U.S. dollar denominated liabilities,
we sustain foreign exchange losses when the peso devalues against the U.S.
dollar. In 2002, we had foreign exchange gains of Ps.41.5 million due to
fluctuations of the peso against the U.S. dollar, as compared to a foreign
exchange gain of Ps.13.5 million in 2001 and a foreign exchange loss of Ps.3.9
million in 2000.

     Any erosion of the purchasing power of Mexican consumers may adversely
affect demand for our products and, as a result, our net sales and
profitability. Inflation and changing prices affect our ability to raise prices
as well as consumer demand, supplier prices and other costs and expenses,
consumer purchasing power and competitive factors, all of which in turn affect
our net sales and operating results. Peso devaluations and high inflation levels
could further adversely affect our operations and financial position.

Increasing Volume of Chicken Sold

     The volume of our chicken sold increased over the previous year by 44.6% in
2000, 10.2% in 2001 and 0.5% in 2002. The increase in 2000 resulted primarily
from production increases after the acquisition of Grupo Campi. The increase in
2001 resulted from increased production due to a lease of assets and a contract
grower agreement with Avicola Cotaxtla, the acquisition of most of the assets of
Avicola Simon Bolivar in the second half of 2001, as well as improved efficiency
at our other production complexes. The increase in the volume of chicken sold in
2002 was mainly due to productivity improvements made in our production
facilities. Such increase, however, was partially offset by the negative effects
of Hurricane Isidore that temporarily shut down production and resulted in
damages and loss of product at our Peninsula Complex during the last four months
of the year. Industry growth was strong last year and is expected to continue in
2003. We expect to participate more than proportionately in that growth,
increasing our sales volume and market share as a result of further improvements
in the production process, and capitalizing on continued consolidation in the
industry.

Trends in Product Prices

     Our results of operations are significantly affected by the cyclical and
volatile nature of Mexican prices for chicken, feed, eggs and swine. The price
of our chicken declined by 0.7% in 2000, due to a change in our product mix
resulting from the merger with Grupo Campi (more live chicken was sold, which
commands a lower price). During 2001, the price decreased by 10.5% as a result
of a further decline in the price of our main raw materials and oversupply
conditions in the chicken market throughout most of the year. During 2002, our
chicken prices decreased 0.8% due to the downturn in demand in our sales regions
provoked by a slowing economy, stable cost of feed ingredients throughout most
of the year and continued changes in our product mix.

     Prices for feed tend to follow trends in prices of feed ingredients, which
     we discuss below.

     The price of eggs declined over the last three years. In 2000, our egg
prices declined slightly in real terms by 1.1%, due to oversupply conditions in
the domestic market. Egg prices declined in 2001 by 0.4% following the decline
in the price of feed ingredients and in 2002 our egg prices continued to decline
by 17.1%, due to heavy oversupply conditions in the domestic egg market.

<PAGE>

     The price of swine increased in 2000 as a result of reduced import
competition from the United States. In 2001, however, the price of swine
decreased by 6.1%, due to both a decrease in the cost of feed ingredients and an
increase in imports from the United States. During 2002, our swine prices
decreased by 21.3% as a result of oversupply in the swine market due mostly to
increased import competition from the United States.

     We believe that, among other factors, industry price competition may
continue to exert downward pressure on real chicken prices, and that prices for
chicken, feed, eggs and swine are also likely to remain volatile and subject to
cyclical variation. Due to the time frame needed to complete the chicken growth
cycle, chicken producers generally cannot adjust production to respond
immediately to cyclical variations, and, accordingly, in times of oversupply,
prices may decline due to overproduction.

Trends in Prices of Feed Ingredients

     The single largest component of our cost of sales is the cost of
ingredients used to prepare feed, including sorghum, soymeal, corn, fishmeal,
meatmeal and, for certain chicken products, marigold extract. The prices of
these feed ingredients are subject to significant volatility due to a number of
variables, including, among other factors, weather, harvest size, transportation
and storage costs, government agricultural policies and currency exchange rates.
The price at which we may obtain feed ingredients from Mexican producers
relative to U.S. producers is also subject to volatility depending on these
variables.

     At present, Mexican feed prices tend to parallel U.S. and international
prices. From 1996 through 1999, we increased the percentage of feed ingredients
that we obtained from Mexican producers. In 2000, however, this trend reversed
with the acquisition of Grupo Campi because the Grupo Campi complexes are
located in regions with low corn production, and consequently they must look to
international markets for most of their supply of feed ingredients. The
percentage of feed ingredients that we purchased from Mexican producers in 2001
remained approximately at the same level as in 2000. In 2001, approximately 40%
of grain, our main feed ingredient, came from local markets. In 2002, the
percentage of feed purchased from local markets fell to 36%, with the remaining
feed ingredients imported primarily from the United States.

     In recent years, reductions in tariffs under NAFTA have favorably affected
our costs of importing feed ingredients. Our cost of feed rose in 2002 compared
to 2001, but we expect our cost of feed to follow a worldwide downward trend
over the long term.

Acquisitions & Dispositions

     Our operations have been affected during the periods we discuss herein, by
a series of acquisitions and production arrangements that we have made in recent
years.

     --   In December 1999, we acquired Grupo Campi, the fourth largest chicken
          producer in Mexico and an important producer of feed.

     --   In February 2001, we entered into an agreement consisting of a lease
          of assets and a contract grower agreement with Avicola Cotaxtla, a
          large producer of broiler chicken.

     --   In the second half of 2001, we acquired two significant egg and
          chicken producers. These producers are Avicola Nochistongo, one of the
          10 largest egg producers in Mexico operating within the Laguna region,
          and Avicola Simon Bolivar, one of the 15 largest egg producers and a
          producer of chicken.

<PAGE>

     During 2002, such acquisitions and production agreements contributed to the
expansion and consolidation of our leadership position in the egg and chicken
industries in Mexico. Through these acquisitions, we expanded our distribution
network throughout almost the entire country and increased our market presence
in both La Laguna and the northeastern regions of Mexico. We financed these
acquisitions through our own working capital resources.

     As a result of these acquisitions and production agreements, our results of
operations in 2001 and 2002 reflect increasing volumes of chicken and egg sales
and increased cost of sales due to higher volumes and changes in product mix.
The integration of these operations and the changes in product mix has also
resulted in an increase in selling, general and administrative expenses over all
periods.

     In April 2002, Secba, S.A. de C.V., a subsidiary of Industrias Bachoco,
S.A. de C.V., was sold for Ps.5.1 million to a related party generating a gain
of Ps.0.7 million, which is included in the Consolidated Financial statements
under the heading "Other income". We do not believe that this item materially
effects our financial statements or their comparability with previous years'
statements.

Seasonality

     Our sales are moderately seasonal, with the highest levels of sales in the
second and fourth quarter due to higher chicken consumption during the holiday
season and lower sales levels earlier in the year during Lent (particularly in
the week prior to Easter).

Summary of Results of Operations

     The following table sets forth, for each of the periods indicated, selected
components of our results of operations as a percentage of net sales for each
such period.
<TABLE>
<CAPTION>
<S>     <C>                                                                 <C>            <C>           <C>

                                                                                     Year Ended December 31,
                                                                             -----------------------------------
                                                                              2000           2001          2002
                                                                             ------         ------        ------
                                                                                  (percentage of net sales)
         Net sales...................................................         100%           100%          100%
         Cost of sales...............................................        (71.4)         (73.2)        (74.2)
         Gross profit................................................         28.6           26.8          25.8
         Operating income............................................         16.3           13.4          12.0
         Comprehensive financing (cost) income.......................          1.5            1.1           0.1
         Income tax, asset tax and employee profit sharing...........         (4.3)          (3.3)          1.8
         Net income..................................................         13.3%          11.2%         14.4%
</TABLE>

     The following table sets forth, for each of the periods indicated, our net
     sales of chicken, eggs, swine and other products as a percentage of total
     net sales in each period.

<PAGE>

<TABLE>
<CAPTION>
<S>     <C>                                                                 <C>             <C>           <C>
                                                                                   Year Ended December 31,
                                                                             -----------------------------------
                                                                              2000           2001          2002
                                                                             ------         ------        ------
                                                                                  (percentage of net sales)
         Chicken ....................................................         84.1%          82.4%         81.0%
         Feed .......................................................          7.2            7.5%         6.9%
         Eggs........................................................          6.2            7.5%         9.4%
         Swine.......................................................          1.3            1.2%         0.9%
         Other products..............................................          1.3            1.4%         1.8%
                                                                             ------         ------        ------
              Total..................................................        100.0%          100%          100%
                                                                             ======         ======        ======
</TABLE>

Results of Operations for the Years Ended December 31, 2001 and 2002

General

     In 2002, Mexico's economy was affected mainly by a global economic
slowdown, particularly because of its trade relationship with the United States,
which continued to experience an economic slowdown. As such, the Mexican gross
domestic product grew only slightly by 0.9%. From December 31, 2001 to December
31, 2002, Mexico's inflation rate reached 5.7% and the peso-U.S. dollar exchange
rate depreciated 12.2%. This depreciation occurred primarily in the second part
of the year.

     According to Union Nacional de Avicultores (UNA), the sales volume of the
Mexican chicken industry grew approximately 5.9% in 2002, while the egg industry
grew approximately 1.6%. Such growth contributed to oversupply conditions in the
egg market for most of the year, leading to a steep reduction in prices.

     The chicken industry benefited from the low costs and price stability of
principal feed ingredients during the first part of the year. This situation
changed at the end of 2002, with the cost of feed ingredients increasing in line
with the general trend of increases in feed cost worldwide.

     During 2002, we continued to grow in terms of sales and sales volume. Our
operating margin, however, decreased to 12.0% as a result of sluggish economic
conditions and oversupply in some of our product lines.

Net sales

     In 2002, consolidated net sales were Ps.10,357.9 million, representing an
increase of 1.5% in constant pesos over the consolidated net sales of
Ps.10,202.3 million in 2001. This increase was mainly due to an increase in egg
sales of Ps.210.8 million or 27.5%, which was partially offset by decreases in
feed and swine sales. Our chicken sales remained at nearly the same level as in
2001.

     The increase in egg sales resulted from a 53.8% increase in the volume of
egg sales, which was partially offset by a steep reduction in prices. The large
volume increase reflects the integration of Avicola Simon Bolivar and Avicola
Nochistongo (both of which have substantial egg production operations), which we
acquired during the second half of 2001, and productivity improvements at our
other operations.

     Our chicken sales decreased only slightly by 0.3% or Ps.23.7 million. The
decrease in sales resulted from a slight decline in our chicken prices. The
price decline was partially offset by an increase of 0.5% in the volume chicken
sales, in spite of the effects of Hurricane Isidore on our Peninsula Complex,
which damaged production facilities and resulted in a loss of chicken supply.

<PAGE>


     Our feed sales decreased by 7.5% or Ps.57.7 million, mainly due to a
reduction of 6.2% of the volume of feed sold. The remaining difference was due
to an increase of 9.8% or Ps.26.2 million in swine and other lines.

Cost of sales

     The consolidated cost of sales in 2002 was Ps.7,683.5 million, representing
an increase over 2001 of Ps.215.6 million, or 2.9%. The rise in cost of sales
resulted primarily from higher volumes of eggs sold, which led to an increase of
Ps.284.1 million in the cost of sales of eggs. This was partially offset by
reductions of Ps.85.4 million in cost of sales of chicken and Ps.25.6 million in
the cost of sales of feed.

     In addition to the higher volume of eggs sold, the increase in cost of
sales was also due to higher per-unit cost of sales of feed. The increase was
partially offset by a reduction in the per-unit costs of chicken, eggs and
swine.

Gross profit

     Gross profit decreased by 2.2% from Ps.2,734.4 million in 2001 to
Ps.2,674.4 million in 2002. As a percentage of net sales, gross profit decreased
from 26.8% in 2001 to 25.8% in 2002. The decrease in our gross profit and profit
margins resulted mainly from price declines in eggs and swine and a lower gross
margin in feed. The increase in the volume of egg sales and a higher gross
margin in chicken did not fully offset the price declines in eggs, swine and
feed.

Selling, general and administrative expenses

     Sales and administrative expenses in 2002 amounted to Ps.1,432.4 million,
representing a Ps.62.5 million increase (or 4.6%) over 2001. The higher expenses
were principally due to the integration of acquisitions and production
arrangements, made in 2001, which resulted in higher sales volumes, changes in
the mix of product lines toward product lines requiring greater administrative
resources, such as sales to supermarkets, and the expansion of our distribution
network. These integration efforts and changes in product lines required
additional sales and administrative resources. As a percentage of net sales,
selling, general and administrative expenses increased to 13.8% in 2002,
compared to 13.4% in 2001.

Operating income

     Consolidated operating income in 2002 decreased year-over-year by Ps.122.5
million to Ps.1,242.0 million, as a result of the decrease in gross operating
margin and higher sales and administrative expenses. As a percentage of net
sales, operating margin decreased from 13.4% in 2001 to 12.0% in 2002.

Comprehensive financing (cost) income

     Comprehensive financing (cost) income represents the net effect of interest
expense, interest income, foreign exchange gain (loss) and gain (loss) on net
monetary position, which arises from the effect of inflation on the average net
balance of monetary assets and liabilities. Comprehensive financing income
showed a gain of Ps.14.3 million in 2002, decreasing by Ps.102.5 million from
2001. The decrease was due to a reduction in the results of our net monetary
position, which was partially offset by an increase in foreign exchange gain.

<PAGE>

Other income (expense), net

     Other income (expense) in both 2001 and 2002 was attributable to sales of
by-products, used equipment and miscellaneous services. It represented net
income of Ps.40.4 million in 2002 as compared to net expenses of Ps.6.6 million
in 2001.

Income before provision for income tax, asset tax, employee profit sharing and
minority interest

     Income decreased by 11.1% from Ps.1,474.7 million in 2001 to Ps.1,296.8
million in 2002, due to the declines in both operating income and comprehensive
financing income.

Results of Operations for the Years Ended December 31, 2000 and 2001

Acquisitions

     In the second half of 2001 Bachoco acquired most of the assets of two
companies: Avicola Nochistongo, one of the 10 largest egg producers in Mexico
with operations in the Laguna region, and Avicola Simon Bolivar, one of the 15
largest egg producers and a producer of chicken. The acquisitions expanded and
consolidated our leadership position in the egg industry in Mexico. In addition,
with these acquisitions we further accomplished our strategy of expanding our
geographic coverage, increasing our market presence in the La Laguna and
Northeastern regions of Mexico and expanding our distribution network, enabling
us to achieve distribution coverage of almost the entire country. We financed
these acquisitions through our own working capital resources.

Net sales

     In 2001, consolidated net sales were Ps.10,202.3 million, representing an
increase of 0.6% in constant pesos over the consolidated net sales of
Ps.10,140.3 million for 2000. This increase was mainly due to the increase in
the egg line by Ps.137.7 million and feed by Ps. 44.0 million. Net sales were
partially offset by decreases of Ps.126.6 million in chicken sales and Ps.8.2
million in pork sales.

     The decline in chicken sales was due to a significant decline in prices as
a result of oversupply conditions in the chicken market. This decline was
partially offset by a 10.2% increase in the volume of chicken sales resulting
from production agreements with Avicola Cotaxtla, the acquisition of Avicola
Simon Bolivar at the end of the year, and improvements in the productivity of
our current chicken-growing operations.

     The increase in egg sales was due to a 22.4% increase in the volume of egg
sales, which was slightly offset by a 0.4% reduction in prices. The volume
increase in egg sales reflects the acquisitions of most of the assets of Avicola
Simon Bolivar and of Avicola Nochistongo (both of which have substantial egg
production operations) made during the second half of 2001 and productivity
improvements at the other operations.

     Sales of feed increased 6.1%, compared to the previous year, as a result of
the 14.6% increase in sales volume, which was slightly offset by the 7.5 %
decrease in the prices of raw materials.

     The decrease in sales revenues for pork was mainly the result of a 6.1%
decrease in price.

<PAGE>

Cost of sales

     The consolidated cost of sales in 2001 was Ps.7,467.9 million, representing
an increase over 2000 of Ps.223.8 million, or 3.1% . Costs increased over
various product lines:

     --   Ps.89.6 million increase in the cost of sales of chicken;

     --   Ps.74.3 million increase in the cost of sales of eggs; and

     --   Ps.35.4 million increase in the cost of sales of feed.

     The increased cost of sales in 2001 resulted from higher sales volumes of
chicken, eggs and feed, which were partially offset by per-unit cost decreases
in the same three lines.

Gross profit

     Gross profit decreased by 5.6%, from Ps.2,896.2 million in 2000 to
Ps.2,734.4 million in 2001, principally due to reduced chicken, egg, pork and
feed prices. Such price reductions were partially offset by the decrease in per
unit costs. As a percentage of net sales, gross profit decreased to 26.8% in
2001 from 28.6% during 2000, as the decline in per-unit cost of producing
chicken, eggs and feed did not fully compensate for the reduction in per-unit
price of those products.

Selling, general and administrative expenses

     Sales and administrative expenses amounted to Ps.1,369.9 million in 2001,
representing a Ps.127.9 million increase (or 10.3%) over 2000. The higher
expenses were principally due to higher volumes as well as expanded marketing,
advertising and administrative expenses resulting from the newly acquired
operations. As a percentage of net sales, these expenses increased to 13.4% in
2001, compared to 12.2% in 2000. (The increase in expenses reflects an increase
in yearly costs rather than one-time expenses associated with the acquisitions.)
This increase is due in part to the decrease in unit prices, since the per-unit
operation cost was lower.

Operating income

     Consolidated operating income for 2001 decreased year-over-year by Ps.289.7
million to Ps. 1,364.5 million, as a result of the decrease in gross operating
margins. As a percentage of net sales, operating margin decreased from 16.3% in
2000 to 13.4% in 2001 as a result of the reduced gross margin and the increase
in operating costs as a percentage of sales.

Comprehensive financing (cost) income

     Comprehensive financing (cost) income represents the net effect of interest
expense, interest income, foreign exchange gain (loss) and gain (loss) on net
monetary position, which arises from the effect of inflation on the average net
balance of monetary assets and liabilities. Comprehensive financing income
showed a gain of Ps.116.8 million in 2001, representing a decrease of Ps.32.8
million from 2000. The decrease resulted from lower gain in our net monetary
position due to lower inflation rates.

Other income (expense), net

     Other income (expense) in both 2000 and 2001 was attributable to sales of
by-products, used equipment and miscellaneous services. It represented net
expenses of Ps.17.6 million in 2000 and net expenses of Ps.6.6 million in 2001.
This difference in net expenses reflects the fact that income from by-products
was higher in 2001 than in 2000.

<PAGE>

Income before provision for income tax, asset tax, employee profit sharing and
minority interest

     Income decreased by 17.4 % from Ps.1,786.3 million in 2000 to Ps.1,474.7
million in 2001, due to the declines in operating income and in comprehensive
financing income.

Income Tax, Asset Tax and Employee Profit Sharing

     We and each of our subsidiaries file individual tax returns and may be
subject to different tax regimes. Until December 31, 2001, Bachoco, S.A. de C.V.
("BSACV"), our principal operating subsidiary was subject to corporate income
tax under the provisions of the simplified statutory regime (the "Simplified
Regime"), which was applicable to a company engaged in agriculture and certain
other activities that derives no more than 10% of its net sales from unrelated
activities or from the production of "processed" products, as defined in the
statutory regime.

     On January 1, 2002, a new income tax law came into effect that
substantially modifies the procedure for determining taxable income under the
simplified regime (the "New Simplified Regime"). Instead of charging income tax
solely based on certain types of transactions, such as dividend payments or
loans, the New Simplified Regime determines taxable income based on revenues
collected net of deductible expenses paid. This new tax base does not allow for
the deduction of the value of fixed assets as of December 31, 2001 or of
inventories existing as of December 31, 2001.

     The New Simplified Regime taxes corporate income at a rate of 35% for 2002,
with a gradual yearly decrease of one percent, until the tax rate is reduced to
32% in 2005; however, companies subject to the New Simplified Regime also
receive a 50% reduction on the above corporate rate. In order to transition to
the New Simplified Regime, companies paying taxes under the old regime had to
determine either the total amount of earnings of fiscal years prior to January
1, 2002 on which taxes need to be paid or the available tax loss carryforward.
As a result of this requirement, our subsidiary BSACV carried forward a tax loss
of Ps.2,938.6 million, as of January 1, 2002.

     In addition to income tax, we, along with our subsidiaries, are also
subject to an alternative minimum tax known as an asset tax, which is assessed
on the average value of most assets, net of certain liabilities. The general
asset tax rate is 1.8%; BSACV is subject to a 0.9% rate pursuant to the New
Simplified Regime (unchanged from the Simplified Regime). We benefit from
special rules that exclude a number of assets from the asset tax and from tax
incentives in connection with certain of our investments. We (together with our
subsidiaries) were subject to asset tax as of December 31, 2002 in the amount of
Ps.13.0 million. We were able to set off certain investment tax credits against
this amount and paid a net amount in asset taxes of Ps.3.2 million.

     Both our subsidiaries and we are required to pay asset tax if the amount of
asset tax exceeds the computed income tax liability. Asset tax can be credited
against income tax in subsequent years (up to ten years). As of December 31,
2002, we had, at nominal value, Ps 4.6 million in asset tax credits.

     In 2002, BSACV recognized an income tax and asset tax credit of Ps.185.2
million, compared with income and asset tax expenses of Ps.330.7 million in
2001. The tax credit was due mainly to a gain of Ps.235.0 million of deferred
income tax, as a result of the tax loss carry forward due to the change to the
New Simplified Regime.

<PAGE>

     Neither BSACV nor we have employees, but each of our other subsidiaries is
required under Mexican law to pay employees, in addition to their compensation
and benefits, profit sharing in an aggregate amount equal to 10% of such
subsidiary's taxable income subject to certain adjustments.

     Starting in January 2000, Bulletin D-4 under Mexican GAAP required us to
recognize deferred taxes. The initial effect of Bulletin D-4 was a decrease in
stockholders' equity and the recognition of a liability of Ps 1,159.6 million at
January 1, 2000. For more detail, see "Income taxes and employee profit sharing"
in note 2 to the Consolidated Financial Statements.

     See Note 13 to the Audited Consolidated Financial Statements for a more
detailed description of the income and asset taxes that we pay.

Liquidity and Capital Resources

     Our working capital (current assets less current liabilities) increased
year-over-year from Ps.2,741.3 million on December 31, 2001 to Ps.3,594.6
million on December 31, 2002. The ratio of current assets to current liabilities
on December 31, 2002 was 7.8, as compared to the ratio of 4.3 on December 31,
2001. Cash and cash equivalents were Ps.1,696.0 million on December 31, 2002,
representing an increase of Ps.459.6 million from the previous year.

     Inventories were Ps.1,724.1 million as of December 31, 2002, representing a
year-over-year increase of Ps.22.3 million.

     Notes payable to banks, including the current portion of long-term debt,
equaled Ps.117.7 million as of December 31, 2002, a decreased of Ps.39.3 million
from December 31, 2001. This decrease was mainly due to the payment of U.S.
dollar- and peso-denominated loans.

     Shareholders' equity increased to Ps.9,474.0 million on December 31, 2002
from Ps.8,348.8 million on December 31, 2001.

     Long-term debt on December 31, 2002 decreased, representing 0.8% of our
capitalization, as compared to 1.9% on December 31, 2001.

     In 2002, capital investments amounted to Ps.264.0 million, all of which
were financed from resources generated from our own operations. These capital
investments were allocated mainly to renew the transportation fleet,
productivity projects and to finance internal growing capacity.

     We are a holding company with no significant operations of our own. We will
have distributable profits and cash to pay dividends only to the extent that we
receive dividends from our subsidiaries, principally BSACV. The amount of
dividends payable by our subsidiaries and us is also subject to general
limitations under Mexican corporate law.

     We expect to finance our capital expenditures and debt service obligations
from our current liquidity and capital resources, cash flows and from additional
borrowings from our existing sources of debt financing, although we will also
consider other sources of debt financing if they are available on advantageous
terms.

<PAGE>

     The following table summarizes certain contractual liabilities as of
December 31,2002. The table does not include short-term debt, accounts payable
or pension liabilities.
<TABLE>
<CAPTION>
<S>                       <C>             <C>               <C>               <C>           <C>
-------------------------------------------------------------------------------------------------------
                          Payments Due by Period (millions of constant pesos as of December, 31, 2002)
-------------------------------------------------------------------------------------------------------
Contractual                 Total         Less than         1-3 years          4 year        5 or more
Obligations                                1 year                                              years
-------------------------------------------------------------------------------------------------------
Long Term Debt             Ps.166.0        Ps.92.7           Ps.33.7           Ps.9.2          Ps.30.4
-------------------------------------------------------------------------------------------------------
Operating Leases              114.9           26.3              62.1             13.7             12.8
-------------------------------------------------------------------------------------------------------
Total                         280.9            119              95.8             22.9             43.2
-------------------------------------------------------------------------------------------------------
</TABLE>

Reconciliation to U.S. GAAP

     The principal differences between Mexican GAAP and U.S. GAAP, as they
relate to us, concern (i) deferred income taxes and employee profit sharing,
(ii) capitalization of financing costs, (iii) minority interest and (iv) the
amortization of goodwill (see Note 17 of the Notes to Consolidated Financial
Statements for a detailed description). Each of these differences also affects
our balance sheet.

     Our consolidated net income under U.S. GAAP was Ps.1,378.1 million in 2000,
Ps.1,156.6 million in 2001 and Ps.1,497.8 million in 2002, compared to
Ps.1,351.4 million, Ps.1,142.4 million and Ps.1,480.5 million, respectively,
under Mexican GAAP. For further explanation, please see Note 17 to the
Consolidated Financial Statements.

Use of Estimates in Certain Accounting Policies

     In preparing our financial statements, we make estimates concerning a
variety of matters. Some of these matters are highly uncertain, and the
estimates involve judgments based on the information available to us. The
discussion below identifies matters for which the financial presentation would
be materially affected (a) if we relied on different estimates that we could
reasonably use, or (b) if in the future we change our estimates in response to
changes that are reasonably likely to occur.

     The discussion below addresses only those estimates that we consider most
important based on the degree of uncertainty and the likelihood of a material
impact if we used a different estimate. There are many other areas in which we
uses estimate about uncertain matters, but the reasonably likely effect of
changed or different estimates would not be material to our financial
presentation.

Estimated Useful Lives of Property, Plant and Equipment

     We estimate the useful lives of our property, plant and equipment in order
to determine the amount of depreciation expense to be recorded in each period.
The current estimates of useful lives are based on estimates made by an
independent appraiser in 1996. Those estimates have been adjusted when
applicable, based on historical experience with similar assets that we own.
Comprehensive financing cost related to the construction of assets is amortized
over the estimated useful lives of the assets. Accumulated depreciation expense
for property, plant and equipment in 2002 amounted to Ps.4,001.5 million. As
applied to our 2002 financial results, the depreciation was Ps.317.0 million, or
3.1% of our total sales. For further explanation, see notes 2 and 4 to the
Consolidated Financial Statements.

Allowance for Productivity Declines

     In estimating the inventory value of our breeder birds, swine and layers,
we make allowances for productivity declines. We estimate such allowances based
on expected future production and deduct them from inventories. The estimates of
future production are based on standards for the breeder line and the
performance of the most recent flocks. We refer to the standards provided by the
company that sells us the breeder line in question. Each company that sells
breeder lines publishes its own particular standards for its proprietary breeder
line. The allowance for productivity declines in 2002 amounted to Ps.143.0
million or 1.2% of the total cost of sales. The allowance for productivity
decline in 2001 amounted to Ps.143.3 million or 1.3% of the total cost of sales,
during 2000 the allowance for productivity decline amounted to Ps.111.8 or 1.0%
of the total cost of sales.

<PAGE>

ITEM 6.  Directors, Senior Management and Employees.

Directors

     The Board of Directors is responsible for the management of our business.
The Board of Directors consists of an odd number of directors, never less than
five, and corresponding alternate directors, each of whom is elected for a term
of one year. The holders of Series B Shares may elect directors and alternate
directors at a general ordinary stockholders' meeting. The holders of Series L
Shares have the right to appoint or elect two directors and two alternate
directors to the Board of Directors.

     Alternate directors elected by the holders of Series B Shares are
authorized to serve on the Board of Directors in place of directors who are
unable to attend meetings or otherwise participate in the activities of the
Board of Directors. Likewise, alternate directors appointed or elected by the
holders of Series L Shares are authorized to serve on the Board of Directors in
place of directors appointed or elected by the holders of Series L Shares who
are unable to attend meetings or otherwise participate in the activities of the
Board of Directors.

     The following table identifies our directors as of December 31, 2002, their
positions on the Board and their years of service:
<TABLE>
<CAPTION>
<S>                                                      <C>                                         <C>

Name                                                      Position                                    Years as Director
----                                                      --------                                    -----------------
Enrique Robinson Bours Almada                             Honorary Chairman of the Board                      49
Francisco Javier R. Bours Castelo                         Chairman of the Board                               21
Mario Javier Robinson Bours Almada                        Director                                            49
Juan Bautista Salvador Robinson Bours                     Director                                            49
Arturo Bours Griffith                                     Director                                             9
Jose Eduardo Robinson Bours Castelo                       Director                                             9
Jesus Enrique Robinson Bours Munoz                        Director                                             9
Juan Salvador Robinson Bours Martinez                     Director                                             9
Jose Francisco Bours Griffith                             Director                                             9
Guillermo Pineda Cruz                                     Director                                             9
Ricardo Aguirre Borboa                                    Director                                             9
Cristobal Mondragon Fragoso                               Director and Secretary of the Board                  7
David Gastelum Cazarez                                    Director                                             7
Octavio Robinson Bours Griffith                           Director                                             6
Rodolfo Ramos Arvizu                                      Director                                             2
Jesus Rodolfo Robinson Bours Munoz                        Director                                             1
</TABLE>

     Enrique Robinson Bours, Mario Javier Robinson Bours and Juan Bautista
Salvador Robinson Bours are brothers. Francisco Javier R. Bours Castelo and Jose
Eduardo Robinson Bours Castelo are sons of Mario Javier Robinson Bours. Arturo
Bours Griffith, Jose Francisco Bours Griffith and Octavio Robinson Bours are
nephews of Enrique Robinson Bours, Mario Javier Robinson Bours and Juan Bautista
Salvador Robinson Bours. Jesus Enrique Robinson Bours Munoz and Jesus Rodolfo
Robinson Bours Munoz are sons of Enrique Robinson Bours. Juan Salvador Robinson
Bours Martinez is the son of Juan Bautista Salvador Robinson Bours. Guillermo
Pineda Cruz is the son-in-law of Enrique Robinson Bours, and Ricardo Aguirre
Borboa is the son-in-law of Juan Bautista Salvador Robinson Bours.

<PAGE>

     Our bylaws provide for the creation of an Executive Committee of the Board
of Directors, which may exercise certain of the Board's powers in full, subject
to certain limitations. Our stockholders elect members of the Executive
Committee for one-year terms. In 2002, there were six members of the Executive
Committee: Enrique Robinson Bours, Francisco Javier R. Bours Castelo, Jesus
Enrique Robinson Bours Munoz, Jose Eduardo Robinson Bours Castelo, Arturo Bours
Griffith and Juan Salvador Robinson Bours Martinez.

     In April 2002 we announced the retirement of Mr. Enrique Robinson Bours
Alamada, Chairman of the Board and co-founder of the Company. Mr. Bours led
Industrias Bachoco S. A. de C.V. over the 50 years of our existence. The Board
named as his successor Mr. Javier Robinson Bours Castelo, who is the nephew of
Mr. Robinson Bours. Mr. Bours Castelo has been at Bachoco for 22 years as a
member of the Board, serving as Vice-Chairman for the last nine years.

     Jesus Rodolfo Robinson Bours Munoz, son of Mr. Enrique Robinson Bours
Almada and brother of Jesus Enrique Robinson Bours Munoz, was named a new member
of the board.

     In order to fully comply with current Mexican Corporate and Securities
Market Laws as well as other recent regulatory amendments in the various markets
in which Bachoco's shares are traded, we appointed a new board of directors in
our ordinary shareholder meeting held on April 30,2003. The board is composed of
the following members:

         Proprietary Directors:
         Francisco Javier R. Bours Castelo (Chairman of the Board)
         Mario Javier Robinson Bours Almada
         Juan Bautista S. Robinson Bours Almada
         Jesus Enrique Robinson Bours Munoz
         Jesus Rodolfo Robinson Bours Munoz
         Arturo Bours Griffith
         Octavio Robinson Bours

         Alternate Directors:
         Jose Eduardo Robinson Bours Castelo
         Juan Salvador Robinson Bours Martinez
         Jose Francisco Bours Griffith

         Independent Directors:
         Ricardo Aguirre Borboa
         Abelino Fernandez Salido
         Humberto Schwarzbeck Noriega

         Alternate Independent Director:
         Guillermo Pineda Cruz

<PAGE>

     Francisco Javier R. Bours Castelo, Chairman of the Board, has been a member
of the Board for 22 years, and has been Chairman since April 2002. Before that,
he was Vice-Chairman for several years. Mr. Francisco Javier holds a degree in
Civil Engineering from the Instituto Tecnologico y de Estudios Superiores
Monterrey (ITESM). He currently serves as Chairman of the Board of the following
companies: Grupo Megacable, SA de CV, Congeladora Horticola, SA de CV,
Inmobiliaria Trento SA de CV, Acuicola Boca SA de CV, Autos y Accesorios SA de
CV, Maquinaria Agricola SA de CV, Agriexport SA de CV, Fertilizantes de Sonora,
Administracion Tecnica del Noroeste, Nuevo Penasco Resort, SA de CV, Taxis
Aereos del Noroeste SA de CV, San Luis Corporacion SA de CV, among others.

     Mario Javier Robinson Bours Alamda, Propietary Director, has been a member
of the Board for 49 years, and is a co-founder of Industrias Bachoco SA de CV.
Mr. Mario Javier is also member of the Board of Banamex and Bancomer.

     Juan Bautista S. Robinson Bours Almada, Propietary Director, has been a
member of the Board for 49 years and is a co-founder of Industrias Bachoco SA de
CV.

     Jesus Enrique Robinson Bours Munoz, Propietary Director, has been a member
of the Board for 9 years, having previously served as Production Director and
Divisional Manager. Mr. Jesus Enrique holds a degree in Engineering from the
University of Arizona. He is also Member of the Board of San Luis Corporacion SA
de CV, Megacable SA de CV. He has spent his entire career in the agricultural
sector.

     Jesus Rodolfo Robinson Bours Munoz, Propietary Director, has been a member
of the Board for one year. Mr. Jesus Rodolfo previously served in the Company as
Production Manager in the Northwest and Bajio divisions, Commercial Manager in
Northwest Division and Purchasing Manager at the Bajio Division. Mr. Jesus
Rodolfo holds a degree in Agricultural Engineering from the University of
Arizona. He has business experience in agriculture and raising livestock with
Agricola Monte Cristo SA de CV, Agricola Rio Yaqui SPR de RL, Agricola Nacapul
SPR de RL and Ganadera Cocorena SPR de RL.

     Arturo Bours Griffith, Propietary Director, has been a member of the Board
for 9 years.

     Octavio Robinson Bours Griffith, Propietary Director, has been a member of
the Board for 6 years. Mr. Octavio holds a degree in Agricultural Engineering
from El Instituto Tecnologico y de Estudios Superiores de Monterrey (ITESM). He
has experience in producing swine.

     Jose Eduardo Robinson Bours Castelo, Alternate Director, has been a member
of the Board for 9 years. Mr. Jose Eduardo holds a degree in Industrial
Engineering from the Instituto Tecnologico y de Estudios Superiores de Monterrey
(ITESM). He was previously Commercial Director of Industrias Bachoco and is
currently a Senator of the Mexican Congress.

     Juan Salvador Robinson Bours Martinez, Alternate Director, has been a
member of the Board for 9 years, and has served Bachoco as Purchasing Manager.
Mr. Juan Salvador holds a degree in Engineering from the Instituto Tecnologico y
de Estudios Superiores de Monterrey (ITESM). His other appointments include the
Chair of the Board of Llyasa among others.

     Jose Francisco Robinson Bours Griffith, Alternate Director, has a been
member of the Board for 9 years. He holds a degree in Civil Engineering from La
Universidad Autonoma de Guadalajara. Mr. Jose Francisco has worked at Bachoco as
Engineering Manager, and is currently dedicated to our agricultural operations.

     Ricardo Aguirre Borboa, Independent Director, has been a member of the
Board for nine years. He is also a Member of the Board of the newspaper El
Debate and he holds a degree in Agricultural Engineering from El Instituto
Tecnologico y de Estudios Superiores Monterrey (ITESM). He has experience and
expertise in agriculture and pork production.

<PAGE>


     Abelino Fernandez Salido, Independent Director, was named a member of the
Board on April 30th, 2003. He is also a member of the Board of Banco Nacional de
Mexico, BBVA Bancomer, Banca Serfin. His business experience is in the marketing
of grains.

     Fernando Schwarzbeck Noriega, Independent Director, was named a member of
the Board on April 30th, 2003.

     Guillermo Pineda Cruz, Alternate Independent Director, has been a member of
the Board for nine years. He is also a member of the Board of Banamex and was a
regional member of the Board of Grupo Financiero Serfin, Inverlat and
Invermexico. He holds several appointments in public interest organizations,
such as President of the Board of Cajeme 2020 AC since 2000, President of the
Board of Cruz Roja Mexicana en Ciudad Obregon and Member of the Committee of
Promocion Social del Valle Yaqui, A.C. Mr. Pineda holds a degree in Civil
engineering from the Instituto Tecnologico y de Estudios Superiores de Monterrey
(ITESM) and a master's degree in Business Administration from El Instituto
Tecnologico y de Estudios Superiores de Sonora (ITSON). He co-founded
Edificadora Pi-Bo, SA de CV in 1983, and is President and CEO of that company.

     Mr. Cristobal Mondragon Fragoso was appointed Secretary of the Board of
Directors, and Mr. Francisco Jose Sanchez Gonzalez was appointed the Company's
Examiner.

Executive Officers

Our executive officers are set forth in the table below:
<TABLE>
<CAPTION>
<S>                                                <C>                                          <C>


Name                                                 Position                                    Age
----                                                 --------                                    ---
Cristobal Mondragon Fragoso                          Chief Executive Officer                      57
David Gastelum Cazares                               Director of Marketing                        51
Jose Luis Lopez Lepe                                 Director of Personnel                        55
Rodolfo Ramos Arvizu                                 Director of Production                       45
Carlos Huerta Suarez                                 Director of Purchases                        45
Ernesto Salmon Castelo                               Director of Industries                       41
Daniel Salazar Ferrer                                Director of Finance                          38
</TABLE>

     In June 2001, we announced the resignation of Arquimedes Celis Ordaz from
his position as Chief Executive Officer. Mr. Celis Ordaz had held the position
of CEO since 1996. Cristobal Mondragon Fragoso was named to replace Mr. Ordaz as
Chief Executive Officer of Bachoco, Mr. Mondragon joined us in 1982 and has held
the position of Chief Financial Officer since 1990. With Mr. Mondragon's
ascension, the position of Chief Financial Officer was been left temporary
empty; the Manager of Finance handled the CFO's responsibilities. Starting in
2003, Mr Daniel Salazar, former Manger of Finance, was promoted as Chief
Financial Officer. In the following paragraphs we give a brief biography of each
of our executive officers.

     Cristobal Mondragon Fragoso, Chief Executive Officer, joined us in 1982 and
assumed his current position in 2001. Previously, Mr. Mondragon served as
Administration Manager, as Manager of Corporate Finance and as Chief Financial
Officer. Before joining us, Mr. Mondragon worked as an accountant for three
years. Later he joined La Hacienda, S.A. de C.V. where he held the positions of
Auditor, Accountant, Head of Processing Systems, Audit Manager, Administration
Manager and Comptroller. Mr. Mondragon holds an accounting degree from
Universidad Nacional Autonoma de Mexico.

<PAGE>

     David Gastelum Cazares, Director of Marketing, joined us in 1979 and
assumed his current position in 1992. Previously, Mr. Gastelum served as a
pullet salesman in the states of Sonora and Sinaloa, National Sales Manager of
Live Animals and Eggs, Manager of the Northwest Division, Manager of the Mexico
City Division and National Sales Manager. Before joining us, Mr. Gastelum worked
at La Hacienda, S.A. de C.V. as Technical Advisor and as Area Officer for the
Southeast Division. Mr. Gastelum holds a degree in veterinary medicine from the
school of Veterinary of Medicine of Universidad Nacional Autonoma de Mexico.

     Jose Luis Lopez Lepe, Director of Personnel, joined us in 1993. Previously,
Mr. Lopez worked as a teacher in several institutions as well as with Grupo
Condumex, where he was Director of Personnel. Mr. Lopez holds a degree in
physics and chemistry from the Escuela Normal Superior and a degree in business
Administration from Instituto Tecnologico Autonomo de Mexico.

     Rodolfo Ramos Arvizu, Director of Production, joined us in 1980.
Previously, Mr. Ramos held positions in the Egg Quality Control Training Program
and in Poultry Management as well as serving as Supervisor of the Commercial Egg
Production Training Program and as manager of Raw Material Purchasing. Mr. Ramos
holds a degree in agricultural engineering from Instituto Tecnologico de
Estudios Superiores de Monterrey.

     Carlos Huerta Suarez, Director of Purchases, joined us in 1986 and assumed
his current position in 1995. Previously, Mr. Huerta served as Administrative
Manager of Pecuarius Laboratorios, S.A. de C.V., Manager of Purchases of the
Bajio Division and Corporate Manager of Purchases. Mr. Huerta holds a degree in
education sciences from Universidad de Monterrey and a masters degree in
business administration from Instituto Tecnologico de Sonora.

     Ernesto Salmon Castelo, Director of Industries, joined us in 1991 and
assumed his current position in 2000. Previously Mr. Salmon worked for Gamesa,
S.A. de C.V. and for us as Sales Manager in Sonora, Northwestern Distribution
Manager, Manager of the Processing Plant in Celaya, Southeastern Division
Manager and Bajio Division Manager. Mr. Salmon holds a degree in Chemical
Engineering from Instituto Tecnologico de Sonora and a masters degree in
business administration from Instituto Tecnologico de Estudios Superiores de
Monterrey.

     Daniel Salazar Ferrer, Director of Finance, joined us in 2000 and assumed
his current position in January, 2003. Previously Mr. Salazar worked for four
years as Chief Financial Officer at Grupo Covarrubias and as Comptroller in
Negromex, a Company of Grupo Desc. Mr. Salazar holds an accounting degree from
Universidad Tecnologica de Mexico and a master's degree in business
administration from Instituto Tecnologico de Estudios Superiores de Monterrey.


Statutory Auditor

     The statutory auditor generally reviews our affairs and reports to the
stockholders at the ordinary general meeting as to the accuracy of the financial
information presented to them by the Board of Directors. The statutory auditor
is also authorized to do the following:

     (i) call ordinary or extraordinary stockholders' meetings;

    (ii) place items on the agenda for meetings of stockholders or the Board of
         Directors;

<PAGE>

    (iii) attend meetings of stockholders or the Board of Directors (without
          the right to vote); and

     (iv) request monthly reports from the Board of Directors regarding our
          financial condition, including statements of results of operations.

As of December 31, 2002, Felizardo Gastelum Felix was the statutory auditor. In
April 2003, Mr. Francisco Jose Sanchez Gonzalez replaced him as statutory
auditor.

Audit Committee

     In January 2001, a Mexican commission of business leaders (Consejo
Coordinador Empresarial), with the support of the Comision Nacional Bancaria y
de Valores (CNBV), issued a Code of Best Corporate Practices (Codigo de Mejores
Practicas Corporativas) for publicly traded Mexican companies, recommending
certain actions with respect to various areas of corporate governance.
Subsequently, the Securities Market Law was amended effective June 2001 to
require that all publicly traded Mexican companies have an audit committee.

     The mandate of the Audit Committee is to establish and monitor procedures
and controls in order to ensure that the financial information we distribute is
useful, appropriate and reliable and accurately reflects our financial position.
In particular, pursuant to our bylaws and Mexican law, the Audit Committee must
do the following:

     (a)  Submit an annual report to the Board of Directors;

     (b)  Provide the Board of Directors with its opinion regarding any
          transaction with a related party that is outside the ordinary course
          of our business (the Board is required to seek the Audit Committee's
          opinion on such matters); and

     (c)  Assist the Board of Directors in selecting candidates for auditor and
          reviewing the scope and terms of the auditor's engagement.

     We formally appointed our Audit Committee on May 22, 2002. It was comprised
of five members of our Board of Directors. This appointment was delayed because
of the recent succession of the Chairman of the Board of Directors. The Board
deferred selecting and implementing the Audit Committee until the change of
leadership occurred and the Board had returned to normal operations. Between
June 2001 and the formal appointment of the Audit Committee, our Executive
Committee, consisting of six members of the Board, handled the duties of the
Audit Committee.


     In order to fully comply with our current Mexican Corporate and Securities
Market Laws as well as other recent regulatory amendments in the various markets
in which Bachoco's shares are traded, we named an audit committee during our
annual ordinary shareholders' meeting on April 30, 2003. The audit committee is
comprised of the following four members:

Ricardo Aguirre Borboa (President)
Francisco Javier R. Bours Castelo
Abelino Fernandez Salido
Humberto Schwarzbeck Noriega.

<PAGE>


Compensation of Directors and Officers

     For the year ended December 31, 2002, we paid approximately Ps.18.9 million
in aggregate compensation to our directors and executive officers, for services
they rendered in their respective capacities.

Board Practices

     In 2001, we began to review Board practices to bring them into compliance
with the recent requirements for companies listed on the Mexican Stock Market.
As a result of this review, we have changed the composition of our board and
appointed an audit committee. See "-- Directors" and "--Audit Committee."

Employees

     As of December 31, 2000, 2001 and 2002, we had approximately 16,396, 18,482
and 18,306 employees, respectively.

     In 2002, approximately 62.6% of employees were members of labor unions.
Labor relations with our employees are governed by 48 separate collective labor
agreements, each relating to a different group of employees and negotiated on
behalf of each such group by a different labor union. As is typical in Mexico,
wages are renegotiated every year while other terms and conditions of employment
are renegotiated every two years. We seek to attract dependable and responsible
employees to train at each of our plants and facilities. We offer our employees
attractive salary and benefit packages, including a pension and savings plan.

     We believe that we have good relations with our employees. We have not
experienced significant work stoppages as a result of labor problems.

Share Ownership

     To the best of our knowledge, no individual director holds share ownership
of more than one percent of any of the class Shares subject to this report. At
this time, we have not developed a share options plan for our employees.

ITEM 7.  Major Shareholders and Related Party Transactions.

     Our Common Stock consists of 447,465,700 Series B Shares and 147,465,700
Series L Shares. Holders of Series B Shares are entitled to one vote at any
general meeting of our stockholders for each Series B Share held. Holders of
Series L Shares are entitled to one vote for each Series L Share held, but only
with respect to certain matters. Each Unit consists of one Series B Share and
one Series L Share. Each B Unit consists of two Series B Shares. In April 1995,
the Robinson Bours Stockholders created the Control Trust to hold certain Units
owned by members of the Robinson Bours family. The Robinson Bours Stockholders,
through the Control Trust and a separate trust established in connection with
our 1997 initial public offering (the "Family Trust"), owned Units and B Units
representing approximately 66.6% of the Series L Shares and 89.0% of the Series
B Shares outstanding on December 31, 2002. In total, the Control Trust and the
Family Trust owned 496,500,000 Shares outstanding on December 31, 2002.

<PAGE>

     The table below sets forth certain information regarding the direct or
indirect ownership of outstanding Shares by the Control Trust and the Family
Trust as of December 31, 2002.
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

  Title of Class                    Identity of Group                      Amount Owned          Percent of Class
-----------------            ------------------------------                ------------          ----------------

Series B(1)                  Control Trust and Family Trust                 398,250,000               89.0%

Series L(2)                  Control Trust and Family Trust                  98,250,000               66.6%

All Classes(3)               Control Trust and Family Trust                 496,500,000               83.5%

(1)  Percentage is based on 447,465,700 Series B Shares, including 300,000,000
     Shares not registered under Section 12 of the Securities and Exchange Act
     of 1934.
(2)  Percentage is based on 147,465,700 Series L Shares.
(3)  Percentage is based on 594,931,400 Shares.
</TABLE>


     Except as set forth in the table above, we are not aware of any person who
owns 10% or more of our Common Stock.

     In November 1998, in accordance with rules established by the Comision
Nacional Bancaria y de Valores, the Mexican banking and securities commission
(the "CNBV"), we established a reserve in the amount of Ps.180.0 million
(Ps.249.0 million in constant pesos as of December 31, 2002 purchasing power)
for the repurchase of shares. We may repurchase our shares in the Mexican Stock
Exchange at prevailing prices to the extent of the balance remaining in the
reserve account or up to 3% of the total shares outstanding. Any shares so
repurchased will not be deemed to be outstanding for purposes of calculating a
quorum or for voting at any shareholders' meeting during the time that we own
the shares. During our shareholder meeting of April 30, 2003, we capped the
share repurchase program for 2003 to a maximum amount of Ps.132.3 million,
equivalent to approximately 9.0 million units UBL (or 1.5 million ADS). As of
May 7, 2003, we had repurchased a total of 1,874,300 units UBL, representing
0.62% of the total shares outstanding.

Interest of Management in Certain Transactions

     It is our policy not to engage in any transaction with or for the benefit
of any stockholder or member of the Board of Directors, or any entity controlled
by such a person or in which such a person has a substantial economic interest,
unless (i) the transaction is related to our business and (ii) the price and
other terms are at least as favorable to us as those that could be obtained on
an arm's-length basis from a third party.

     We have engaged in a variety of transactions with entities owned by members
of the Robinson Bours family, all of which we believe were consistent with this
policy and not material to our business and results of operations. All of these
transactions are described below. See Note 8 to the Consolidated Financial
Statements. We expect to engage in similar transactions in the future.

     We regularly purchase vehicles and related equipment from distributors
owned by various members of the Robinson Bours family. The total amount spent on
such purchases was Ps.51.9 million, Ps.32.9 million and Ps.48.1 million for the
years ended December 31, 2000, 2001 and 2002, respectively. The distribution of
vehicles and related equipment is a highly competitive aspect of business in the
areas in which we operate. We are not dependent on affiliated distributors and
are able to ensure that the pricing and service we obtain from affiliated
distributors are competitive with those available from other suppliers.

<PAGE>

     The Robinson Bours Stockholders own Taxis Aereos del Noroeste, S.A. de C.V.
("TAN"), an air transport company that provides transportation for members of
the Board of Directors to and from meetings at our headquarters in Celaya. We
paid TAN Ps.3.0 million, Ps.2.8 million and Ps.3.4 million for the years ended
December 31, 2000, 2001 and 2002, respectively, for such transportation.

     We purchased feed and packaging materials from enterprises owned by the
family of Enrique Robinson Bours and the family of Juan Bautista Robinson Bours.
The cost of such purchases was Ps.145.5 million, Ps.142.1 million and Ps.97.9
million for the years ended December 31, 2000, 2001 and 2002, respectively.

     In April 2002, Secba, S.A. de C.V., a subsidiary of Industrias Bachoco,
S.A. de C.V., was sold for Ps.5.1 million to a related party generating a gain
of Ps.0.7 million, which is included in the Consolidated Financial statements
under the heading "Other income".

     Our accounts payable to related parties totaled Ps.16.6 million and Ps.20.2
million for the years ended December 31, 2001 and 2002, respectively. These
transactions took place among companies owned by the same set of stockholders.
See Note 8 to the Consolidated Financial Statements.

     Neither we nor our subsidiaries have loaned any money to any of our
directors or officers.



ITEM 8.  Financial Information

     Our Consolidated Financial Statements are included in Item 18. The
financial statements were audited by an independent auditor and are accompanied
by an audit report.

     The financial statements include a consolidated balanced sheet,
consolidated statements of income, consolidated statements of changes in
stockholders' equity, consolidated statements of changes in financial position
and notes relating to the Consolidated Financial Statements.

     The Consolidated Financial Statements have been prepared in accordance with
Mexican GAAP, which differs in certain respects from U.S. GAAP. Note 17 to the
Consolidated Financial Statements provides a description of the principal
differences between Mexican GAAP and U.S. GAAP as they relate to us and a
reconciliation to U.S. GAAP of total stockholders' equity, operating income and
net income, and a condensed cash flow statement under U.S. GAAP as of December
31, 2001 and 2002, and for the years ended December 31, 2000, 2001 and 2002.

Legal Proceedings

     We are a party to certain legal proceedings in the ordinary course of our
business. We believe that none of these proceedings, individually or in the
aggregate, is likely to have a material adverse effect on us.

Dividends Policy

     Pursuant to Mexican law and our bylaws, the declaration, amount and payment
of annual dividends are determined by a majority vote of the holders of Series B
Shares, generally but not necessarily on the recommendation of the Board of
Directors. Holders of Series L Shares are not entitled to vote with respect to
the declaration of dividends.

     We declared and paid dividends in nominal pesos of Ps.156.1 million in
2000, Ps.313.2 million in 2001 and Ps.267.8 million in year 2002.

<PAGE>

     Although there can be no assurance as to the amount or timing of future
dividends, we expect to pay an annual dividend pro rata to holders of
outstanding Shares in an amount up to approximately 20% of the prior year's net
income. The declaration and payment of dividends will depend on our results of
operations, financial condition, cash requirements, future prospects and other
factors deemed relevant by the Board of Directors and the holders of Series B
Shares, including debt instruments which may limit our ability to pay dividends.

     Because we are a holding company with no significant operations of our own,
we will have distributable profits and cash to pay dividends only to the extent
that we receive dividends from our subsidiaries, principally BSACV. Accordingly,
there can be no assurance that we will pay dividends or of the amount of any
such dividends. BSACV, our principal operating subsidiary, could, in the future,
enter into loan agreements containing covenants whose terms limit its ability to
pay dividends under certain circumstances.

     Mexican law requires that 5% of our net income each year (after profit
sharing and other deductions required by Mexican law) be allocated to a legal
reserve fund until such fund reaches an amount equal to at least 20% of our
capital stock. Mexican corporations may pay dividends only out of earnings
(including retained earnings after all losses have been absorbed or paid up) and
only after such allocation to the legal reserve fund. The level of earnings
available for the payment of dividends is determined under Mexican GAAP.

Significant Changes

     We included in our first quarter results of 2003 a non-cash one-time impact
of the new Bulletin E-1 under Mexican GAAP, which took effect in January 2003.
The bulletin changes the way biological assets, including animals like chicken
and swine, are treated under Mexican GAAP. Starting in January 2003, these
assets must be included as a potential profit in a company's financial
statements before they are harvested. We have to estimate the potential profit
for these animals at a reasonable market price minus expected costs and
operating expenses. That estimate may be higher or lower than the actual profits
realized. The effect of Bulletin E-1 may be positive or negative for any
particular period, depending on the price and inventories of animals in that
period. In making the transition to this new Mexican GAAP requirement, we
recognized a one-time non-cash positive effect of Ps.65.0 million net of taxes
on our income statement.

     On April 30th, 2003 in order to fully comply with the current Mexican
Corporate and Securities Market Laws as well as other recent regulatory
amendments in the various markets in which Bachoco's shares are traded, we named
a new board of directors. See "Item 6--Directors."


ITEM 9.  The Offer and Listing

     The Units (each comprised of one Series B Share and one Series L Share) are
listed on the Mexican Stock Exchange, and the American Depositary Shares
("ADSs," each comprised of six Units) are listed on the New York Stock Exchange.
The ADSs are evidenced by American Depositary Receipts ("ADRs") issued by The
Bank of New York, as Depositary under a Deposit Agreement among the Company, the
Depositary and the holders from time to time of ADRs. On December 31, 2002,
there were 2,143,117 ADSs outstanding, representing 2.9% of the outstanding
Series B Shares and 8.7% of the outstanding Series L Shares, which were held by
five holders (including the Depositary Trust Company) with registered addresses
in the United States.

<PAGE>

     The Units and the ADSs commenced trading on September 19, 1997. The
following tables set forth for each year from 1999 to 2002, for each quarter
from 2001 and 2002 and for each complete month from December 2002 to May 2003,
the high, low and period end sales prices of the Units on the Mexican Stock
Exchange as reported by the Mexican Stock Exchange and the high, low and period
end sales price of the ADSs on the New York Stock Exchange as reported by the
New York Stock Exchange.
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                           Mexican Stock Exchange
                                          (Nominal pesos per Unit)

         Year                                   High                     Low                    Close
        ------                                 -------                 -------                 -------
         1999                                   16.09                    9.60                   16.06
         2000                                   16.06                    9.51                   10.19
         2001                                   13.00                    8.17                   11.10
         2002                                   16.00                   10.98                   14.50

                                          New York Stock Exchange
                                             (in U.S.$ per ADS)

         Year                                   High                     Low                    Close
        ------                                 -------                 -------                 -------
         1999                                   11.25                    6.50                   10.75
         2000                                   10.75                    6.50                    7.06
         2001                                    8.60                    5.45                    7.35
         2002                                   10.00                    7.15                    8.52

                                           Mexican Stock Exchange
                                          (Nominal pesos per Unit)

        Period                                  High                     Low                    Close
        ------                                 -------                 -------                 -------
First Quarter 2001                              10.66                    8.52                    8.73
Second Quarter 2001                              8.80                    8.26                    8.55
Third Quarter 2001                              13.00                    8.17                    9.50
Fourth Quarter 2001                             11.10                    9.00                   11.10
First Quarter 2002                              15.00                   10.98                   14.50
Second Quarter 2002                             16.00                   14.36                   15.00
Third Quarter 2002                              16.00                   14.50                   14.50
Fourth Quarter 2002                             14.50                   13.49                   14.50
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                          New York Stock Exchange
                                             (in U.S.$ per ADS)

        Period                                  High                     Low                    Close
        ------                                 -------                 -------                 -------
First Quarter 2001                               7.06                    5.75                    6.20
Second Quarter 2001                              6.35                    5.70                    5.90
Third Quarter 2001                               8.60                    5.45                    5.95
Fourth Quarter 2001                              7.35                    5.56                    7.35
First Quarter 2002                              10.00                    7.15                    9.85
Second Quarter 2002                              9.95                    9.15                    9.40
Third Quarter 2002                               9.77                    8.38                    8.50
Fourth Quarter 2002                              8.65                    7.75                    8.52


                                           Mexican Stock Exchange
                                          (Nominal pesos per Unit)

         Month                                  High                     Low                    Close
        ------                                 -------                 -------                 -------
December 2002                                   14.50                   13.49                   14.50
January 2003                                    14.80                   14.31                   14.60
February 2003                                   14.70                   14.00                   14.00
March 2003                                      14.70                   14.30                   14.70
April 2003                                      15.00                   14.50                   14.70
May 2003                                        18.40                   15.00                   18.40


                                          New York Stock Exchange
                                             (in U.S.$ per ADS)
        Period                                  High                     Low                    Close
        ------                                 -------                 -------                 -------
December 2002                                    8.52                    8.12                    8.52
January 2003                                     8.65                    7.98                    7.98
February 2003                                    8.05                    7.73                    7.73
March 2003                                       8.18                    7.75                    8.15
April 2003                                       8.68                    8.15                    8.68
May 2003                                        10.78                    8.95                   10.78
</TABLE>


Trading on the Mexican Stock Exchange

     The Mexican Stock Exchange, located in Mexico City, is the only stock
exchange in Mexico. Founded in 1894, the Mexican Stock Exchange is organized as
a corporation whose shares are held by brokerage houses, which are currently the
only entities allowed to own them. These brokerage houses are currently the only
entities authorized to trade on the floor of the Mexican Stock Exchange. Trading
on the Mexican Stock Exchange takes place principally through an automated
inter-dealer quotation system known as SENTRA, which is open for trading between
the hours of 8:30 a.m. and 3:00 p.m., Mexico City time, each business day. Each
trading day is divided into six trading sessions with ten-minute periods
separating each session. Trades in securities listed on the Mexican Stock
Exchange can, subject to certain requirements, also be effected off the
Exchange. Due primarily to Mexican tax considerations, however, most
transactions in listed securities are effected through the Exchange. The Mexican
Stock Exchange operates a system of automatic suspension of trading in shares of
a particular issuer as a means of controlling excessive price volatility, but
under current regulations this system does not apply to securities such as the
Units that are directly or indirectly (for example, through ADSs) quoted on a
stock exchange outside Mexico.

<PAGE>

     Settlement is effected two business days after a share transaction on the
Mexican Stock Exchange. Deferred settlement, even by mutual agreement, is not
permitted without the approval of the CNBV. Most securities traded on the
Mexican Stock Exchange are on deposit with S.D. Indeval, S.A. de C.V.,
Institucion para el Deposito de Valores ("Indeval"), a privately-owned central
securities depositary that acts as a clearing house, depositary, custodian and
registrar for Mexican Stock Exchange transactions, eliminating the need for
physical transfer of securities.

     The Mexican Stock Exchange is one of Latin America's largest exchanges in
terms of market capitalization, but it remains relatively small and illiquid
compared to major world markets and is therefore subject to greater volatility.
There is no formal over-the-counter market for securities in Mexico.

     The market value of securities of Mexican companies is, to varying degrees,
affected by economic and market conditions in other emerging market countries.

Market Regulation

     The predecessor of the CNBV was established in 1946 to regulate stock
market activity. The Ley del Mercado de Valores (the "Securities Market Law") of
1975, as amended, regulates the securities markets and brokerage houses and sets
standards for the registration of brokers in the Intermediaries Section of the
RNVI, a prerequisite to becoming a member of the Mexican Stock Exchange. Prior
to registration in the RNVI, brokerage houses must be authorized by the Ministry
of Finance upon the recommendation of the CNBV. Legislative provisions under
NAFTA allow foreign securities firms in a NAFTA country to establish and control
brokerage firms in Mexico. There are several foreign brokerage houses authorized
to operate in Mexico. In addition, a number of other foreign brokerage firms
have submitted preliminary applications to be authorized to operate in the
Mexican Stock Exchange. The Securities Market Law also empowers the CNBV to
regulate the public offering and trading of securities. The governing committee
of the CNBV is composed of representatives of the Ministry of Finance, the
Mexican Central Bank, the Comision Nacional de Seguros y Fianzas (National
Insurance and Bonding Commission), the Comision Nacional del Sistema de Ahorro
para el Retiro (Commission for the Retirement Savings Fund) and the CNBV.

     Under the Mexican Securities Market Law, the CNBV must be notified before
stockholders of a company listed on the Mexican Stock Exchange effect one or
more simultaneous or successive transactions resulting in the transfer of 10% or
more of such company's capital stock. The holders of the shares being
transferred in the transactions are also obligated to inform the CNBV of the
results of the transactions within three days of completion of the last
transaction, or that the transactions have not been completed. The CNBV will
notify the Mexican Stock Exchange of such transactions, without specifying the
names of the parties involved.

     The CNBV and the Mexican Stock Exchange must also be notified in the event
of any of the following contingencies:

     --   on the following day of operation if any stockholder of a company
          listed on the Mexican Stock Exchange effects one or more transactions
          resulting in the ownership of more than 10% and less of 30% of capital
          stock, day of the operation;

     --   on the following day of operation if any Related Person increases his
          ownership of the stock of a company; and

     --   at least 15 days before the operation becomes effective if any
          stockholder of a company listed on the Mexican Stock Exchange,
          undertakes in a Public Offering one or more transactions resulting in
          the ownership of more than 30% and less than 50% of capital stock.

<PAGE>

ITEM 10.  Additional Information

Memorandum and Articles of Association

     Information regarding the memorandum and articles of association was
included in the Initial Registration Form F-1, submitted on September 1997. In
April, 2002, we made changes to our bylaws; these changes are indicated below.
Aside from these changes, the information contained the Initial Registration
Form F-1 is applicable to this Annual Report.

     The discussion set forth below contains information concerning our capital
stock and a brief summary of the material provisions of the bylaws and
applicable Mexican law. This summary does not purport to be complete and is
qualified in its entirety by reference to the bylaws and the applicable
provisions of Mexican law.

General

     We were incorporated on April 17, 1980, as a variable capital corporation
(sociedad anonima de capital variable) under the laws of Mexico.

     In 1995, our stockholders authorized the issuance of up to 15,525,000
additional Series B Shares and 15,525,000 additional Series L Shares, all
constituting fixed capital, to be issued in connection with the global offering
of shares that took place on September 19, 1997 (the "Global Offering").

     On April 21, 1997 we restructured our capital by (i) declaring a
four-to-one stock split of the 106,678,125 Series B Shares and 35,559,375 Series
L Shares outstanding, (ii) converting 7,762,500 Series L Shares (on a post-split
basis) into Series B Shares and (iii) combining all of the 434,475,000 Series B
Shares and 134,475,000 Series L Shares outstanding (in each case, on a
post-split basis) into 134,475,000 Units and 150,000,000 B Units. Each Unit
consists of one Series B Share and one Series L Share. Holders of Units will be
entitled to exercise all the rights of holders of the Series B Shares and Series
L Shares underlying their Units. Each B Unit consists of two Series B Shares. B
Units entitle the holders thereof to exercise all the rights of holders of the
Series B Shares underlying such B Units. Immediately prior to the Global
Offering, our outstanding capital stock consisted of 434,475,000 Series B Shares
and 134,475,000 Series L Shares, all of which were duly authorized, validly
issued and are fully paid and non-assessable.

     For a period of 10 years after the Global Offering, the Series B Shares
will be issuable only in the form of Units and B Units, and the Series L Shares
will be issuable only in the form of Units. Commencing 10 years from the date of
the Global Offering, Units will automatically separate into their component
Series B Shares and Series L Shares, B Units will automatically separate into
their component Series B Shares, and each Series L Share underlying the Units
will automatically convert into one Series B Share.

     The Series B Shares generally will represent at least 75.0% of our Common
Stock and will have full voting rights. See "--Foreign Investment Legislation."
The Series L Shares may not represent more than 25.0% of our capital stock. As
further described below, the Series B Shares and the Series L Shares have the
same economic rights. Each Series B Share entitles the holder thereof to one
vote at any general meeting of the stockholders. The Series L Shares are
entitled to vote only with respect to certain limited matters as described under
"--Voting Rights and Stockholders' Meetings."

<PAGE>

     The Robinson Bours Stockholders have advised us that they intend to ensure
that the Control Trust will hold at least 51% of the Series B Shares at any time
outstanding. See "--Foreign Investment Legislation."

Registration and Transfer

     The Units and B Units are evidenced by certificates in registered form,
which may have dividend coupons attached. We maintain a registry and, in
accordance with Mexican law, we recognize as stockholders only those holders
listed in the stock registry. Stockholders may hold their Units or B Units in
the form of physical certificates (which, together with notations made in our
stock registry, evidence ownership of the Units and B Units) or through book
entries with institutions that have accounts with Indeval. Indeval is the holder
of record in respect of Units and B Units held through it. Accounts may be
maintained at Indeval by brokerage houses, banks and other entities approved by
the Comision Nacional Bancaria y de Valores (CNBV). Ownership of Units and B
Units maintained at Indeval is evidenced through Indeval's records and through
lists kept by Indeval participants. See "Description of American Depositary
Receipts."

Voting Rights and Stockholders' Meetings

     Each Series B Share entitles the holder thereof to one vote at any general
meeting of the stockholders. Holders of Series B Shares are currently entitled
to elect all members of the Board of Directors, with the exception of those
members that holders of Series L Shares are entitled to elect. Our bylaws
provide that the Board of Directors shall consist of at least 5 members, which
minimum may be decreased at an extraordinary general meeting of stockholders by
majority vote of the holders of Series B Shares. At year-end 2002, the Board of
Directors consisted of 15 members. Our board was reformed in April of 2003, and
now consists of seven proprietary Directors and three independent Directors. The
shareholders also appointed four alternate Directors to the Board, three of whom
are proprietary and one of whom is independent.

     Each Series L Share entitles the holder thereof to the following rights:

     (d)  the rights described below with respect to the appointment or election
          of up to two directors;

     (ii) one vote at a special stockholders' meeting with respect to the
          cancellation of the registration of the Series L Shares with the RNVI
          or with any Mexican or foreign stock exchange; and

    (iii) one vote at an extraordinary general stockholders' meeting with
          respect to the following matters only:

          (a)  transformation of the Company from one type of corporate form to
               another;

          (b)  any merger of the Company with another company where we are not
               the surviving entity;

          (c)  cancellation of the registration of the Shares with the RNVI or
               in any Mexican or foreign stock exchange; and

          (d)  amendment to the controlling stockholders' obligation under the
               bylaws to repurchase Shares and certain other provisions in the
               event of delisting.

<PAGE>

Holders of Series L Shares are not entitled to attend or to address
stockholders' meetings at which they are not entitled to vote.

     Under Mexican law, the holders of Shares of any series are also entitled to
vote at a special meeting on any action that would prejudice the rights of such
holders, and such a holder would be entitled to judicial relief against any such
action taken without the approval of holders at such a meeting. Special meetings
are meetings called by holders of a certain series, like the L series, in order
to reach to a consensus on an issue or issues prior to an extraordinary meeting.
Any determination that an action does not require a vote at a special meeting
would be subject to judicial challenge by an affected stockholder, and the
necessity for a vote at a special meeting would ultimately be determined by a
Mexican court of competent jurisdiction. Mexican law does not provide extensive
guidance on the criteria to be applied in making such a determination.

     General stockholders' meetings may be ordinary or extraordinary meetings.
Extraordinary general meetings are meetings called to consider the matters
specified in Article 182 of the Mexican Companies Law and the bylaws including
changes in the fixed portion of the capital stock and other amendments to the
bylaws, liquidation, merger, transformation from one type of corporate form to
another, change in nationality, change of corporate purpose and those other
matters on which the holders of the Series L Shares are entitled to vote.
General meetings called to consider all other matters, including election of
directors and the statutory auditor, are ordinary meetings. An ordinary general
meeting of the Company must be held at least annually during the four months
following the end of the preceding fiscal year to consider certain matters
specified in Article 181 of the Mexican Companies Law, including, principally,
the election of directors and the statutory auditor, the approval of the report
of the Board of Directors regarding their company's performance, the company's
financial statements for the preceding fiscal year and the allocation of the
profits and losses of the preceding year.

     Any holder or group of holders of Series L Shares representing 10.0% or
more of our outstanding capital stock has the right to appoint one member and
one alternate member of the Board of Directors by written notice delivered to
the Chairman or the Secretary of the Board at least two days prior to the date
of a general stockholders' meeting to be held for the election of directors. If
no directors are so appointed, holders of Series L Shares are entitled to vote
at a special stockholders' meeting to elect two members and two alternate
members of the Board of Directors; similarly, if only one director is so
appointed, holders of Series L Shares are entitled to vote at a special
stockholders' meeting to elect one additional member and one alternate member of
the Board of Directors. The holders of Series L can only revoke the appointment
of a member of the board that they elected, but only if the appointment of all
the other members of the Board is also revoked. Other than the Robinson Bours
Stockholders, no person or persons own Series L Shares representing 10.0% or
more of our outstanding capital stock.

     Under our bylaws, the quorum on first call for a general ordinary meeting
is at least 50.0% of the outstanding Series B Shares, and action may be taken by
a majority of the Series B Shares present. If a quorum is not available on first
call, a second meeting may be called at which action may be taken by a majority
of the Series B Shares present, regardless of the number of such shares. The
quorum on first call for a general extraordinary meeting or a special meeting is
75.0% of the outstanding Shares with voting rights on the matters to be
addressed in that meeting. If a quorum is not available on first call, a second
meeting may be called, provided that at least 50.0% of the outstanding Shares
with voting rights on the matters to be addressed in that meeting are
represented.

<PAGE>

     Whether on first or subsequent call, adoption of a resolution at a general
extraordinary meeting requires the favorable vote of the holders of at least
50.0% of the outstanding Shares with voting rights on the matters to be
addressed by that extraordinary meeting. In addition, any action taken at an
extraordinary general meeting, on first or subsequent call, at which holders of
Series L Shares are entitled to vote, requires the favorable vote of the holders
of the majority of the outstanding Series B Shares voting separately as a class,
and any action taken at an extraordinary general meeting, on first or subsequent
call, with respect to the cancellation of the registration of the Series L
Shares with the RNVI or with any Mexican or foreign stock exchange, requires the
favorable vote of the holders of Series L Shares at a special meeting. Whether
on a first or subsequent call, for a special meeting to take action, the
favorable vote of at least 50.0% of the outstanding Shares of the corresponding
Series is required; provided, however, that special meetings of holders of
Series L Shares which are called to elect and remove directors and to vote with
respect to the cancellation of the registration of the Series L Shares with the
RNVI or with any Mexican or foreign stock exchange do not have a quorum
requirement and action may be taken by a majority of the Series L Shares
present, regardless of the number of such shares.

     Our bylaws require the approval of holders of at least 95.0% of the
outstanding Shares and the approval of the CNBV for the amendment of the
controlling stockholders' obligation under the bylaws to repurchase Shares and
certain other provisions in the event of delisting. See "--Other
Provisions--Repurchase in the Event of Delisting." Holders of ADRs are entitled
to instruct the Depositary as to the exercise of the voting rights pertaining to
the Series B Shares and the Series L Shares constituting the Units represented
by the ADSs. See "Description of American Depositary Receipts--Voting of
Deposited Securities."

     According to our bylaws, shareholders with a right to vote, including a
limited right to vote, who hold at least 10% of the shares represented in a
stockholders' meeting, may ask to postpone a vote on any matters on which they
believe they do not have enough information as defined by Article 199 of the
Mexican Companies Law. Shareholders with a right to vote, including a limited
right to vote, who hold at least 20% of the capital stock, may legally object to
the decisions of a general stockholder's meeting, with respect to matters in
which they have rights, as defined by Articles 201 and 202 of the Mexican
Companies Law.

     In addition, shareholders with or without a right to vote, representing at
least 10% of the stockholders equity, can appoint a statutory auditor. They can
revoke the statutory auditor they appointed, but only when all others statutory
auditors are revoked.

     Stockholders' meetings may be called by the Board of Directors, the
Chairman of the Board, the Secretary of the Board, the statutory auditor or any
Mexican court of competent jurisdiction. The Board of Directors or the statutory
auditor may be required to call a meeting of stockholders by holders of at least
10.0% of the Series B Shares or, in the case of a stockholders meeting at which
holders of Series L Shares would be entitled to vote, by the holders of at least
10.0% of our outstanding capital stock. In addition, the Board of Directors or
the statutory auditor must call a stockholders' meeting at the written request
of any holder of Series B Shares if no ordinary general stockholders' meeting
has been held for two consecutive years or if in any meetings held during such a
period the stockholders have not considered the items mentioned in Article 181
of the Mexican Companies Law, discussed above.

     The Board of Directors or the statutory auditor must call a stockholders'
meeting at the written request of any holder of Series L Shares if no ordinary
general stockholders' meeting has been held for two consecutive years for the
election of directors. In the event that a meeting is not called within 15 days
following the date of such a request, a Mexican court may require such meeting
to be called. At least 15 days prior to the meeting, notice of the meeting must
be published in the official gazette (Diario Oficial de la Federacion) or in a
newspaper of general circulation in Mexico City. Stockholders' meetings may be
held without such publication provided that 100.0% of the outstanding Shares
with voting rights on the matters to be addressed by such meeting are
represented.

<PAGE>

     From the moment that a call for a stockholders' meeting is made public, all
the information related to the meeting must be available to the stockholders. In
order to attend a stockholders' meeting, a stockholder must request and obtain
an admission card by furnishing, at least 24 hours before the time set for
holding the stockholders' meeting, appropriate evidence of ownership of Shares
in us and depositing such Shares with our corporate secretary or with an
institution authorized to accept such deposit. If so entitled to attend the
meeting, a stockholder may be represented by proxy signed before two witnesses.
Additionally, the stockholder may be represented at the stockholders' meetings
by a person named by proxy, on a printed form that we issue, which, under
Mexican law, must identify our company and indicate clearly the matters to be
addressed in the meeting, with enough space for the instructions that the
shareholder specifies. We are obliged to make information on the upcoming
meeting available to the intermediaries in the stock market, for the time
specified in Article 173 of the Mexican Law, in order to give the intermediaries
time to send it to the stockholders they represent. The Secretary of the Board
must verify that this requirement is met and report on this matter at the
Shareholders Meeting. See "--Registration and Transfer."

Members of the Board

     Under the Mexican Companies Law, a Board of Directors must conform to the
following requirements:

          (i)  The Board must have no more than 20 members;

         (ii)  For every member of the Board, an alternate member of the Board
               must be named;

         (iii) The Audit Committee must be presented at a Stockholders Meeting;
               and

         (iv)  Commissaries must be present at all meetings of the board and at
               all sessions of intermediate committees to which the Board
               delegated any responsibility.

     Because the above standards are not formally required by our bylaws,
failure to meet these standards will not constitute grounds for judicial action
challenging any act, contract, or agreement undertaken by the Board, an
intermediate committee or other delegated authority. Furthermore, such standards
will not be mandatory for the validity or existence of such acts.

     The Board of Directors must meet at least every 3 months at our address or
any other place in the Mexican Republic and on the dates that the Board
determines. Meetings previously scheduled in accordance with a schedule
pre-approved by the Board do not need to be called. Meetings must be called by
at least 25% of the members of the Board, the Chairman of the Board, the
Vice-Chairman of the Board or in the case of a statutory auditor, the Secretary
or the alternate Secretary of the Board. Members of the Board must be notified
via e-mail or in writing at least five calendar days in advance of a meeting.
The Commissaries must be called to every meeting of the Board, where they have
the right to speak, but not the right to vote.

<PAGE>

Statutory Auditors

     As determined by Mexican law, the statutory auditor's role is to verify
information on the company, to audit its operations and to report on the company
to shareholders at the annual shareholders meeting. Any shareholder with at
least 10% of our capital stock-even a shareholder without the right to vote-has
the right to designate a statutory auditor. In the case of a statutory auditor
appointed by a minority of shareholders, the majority may revoke that
appointment provided that it revokes the appointment of all other statutory
auditors as well. A statutory auditor does not need to be a shareholder and
maintains his or her position for one year, but may continue to fulfill his or
her duties until the replacement takes over the position. A statutory auditor
may be reelected. A substitute statutory auditor may assume the duties of any
statutory auditor who, for any reason, cannot perform his or her duties.

Dividends and Distributions

     At the annual ordinary general stockholders' meeting, the Board of
Directors submits our financial statements for the previous fiscal year,
together with a report thereon by the Board, to the holders of Series B Shares
for their consideration. The holders of Series B Shares, once they have approved
the financial statements, determine the allocation of our net profits, if any,
for the preceding year. They are required by law to allocate 5.0% of such net
profits to a legal reserve, which is not thereafter available for distribution
until the amount of the legal reserve equals 20.0% of our historical capital
stock (before giving effect to the restatement thereof in constant pesos). As of
December 31, 2002, our legal reserve fund was equal to at least 20.0% of our
paid-in capital stock. Amounts in excess of those allocated to the legal reserve
fund may be allocated to other reserve funds as the stockholders determine,
including a reserve for the repurchase of our Shares. The remaining balance of
net profits, if any, is available for distribution as dividends. No dividends
may be paid, however, unless losses for prior fiscal years have been paid up or
absorbed.

     Holders of Units and B Units and, accordingly, holders of ADSs will have
equal rights, on a per Share basis, to dividends and other distributions,
including any distributions we make upon liquidation. Partially paid Units or
Shares participate in any distribution to the extent that such Units or Shares
have been paid at the time of the distribution or, if not paid, only with
respect to the proportion paid.

Changes in Capital Stock

     An increase of capital stock may generally be effected through the issuance
of new Units or Shares for payment in cash or in kind, by capitalization of
indebtedness or by capitalization of certain items of stockholders' equity. An
increase of capital stock generally may not be effected until all previously
issued and subscribed Units or Shares of capital stock have been fully paid.
Generally, a reduction of capital stock may be effected to absorb losses, to
redeem Units or Shares, or to release stockholders from payments not made. A
reduction of capital stock to redeem Units or Shares is effected by reimbursing
holders of Units or Shares pro rata or by lot. Stockholders may also approve the
redemption of fully paid Units or Shares with retained earnings. Such a
redemption would be effected by a repurchase of Units or Shares on the Mexican
Stock Exchange (in the case of Units or Shares listed thereon) and would be
subject to the limitation that the Series L Shares may not at any time represent
more than 25.0% of our capital stock.

     Except under limited circumstances, the bylaws require that any capital
increase effected pursuant to a capital contribution be represented by new
Series B Shares and Series L Shares in proportion to the number of Shares of
each such Series outstanding.

     The fixed portion of our capital stock may only be increased or decreased
by resolution of a general extraordinary meeting and an amendment to the bylaws,
whereas the variable portion of our capital stock may be increased or decreased
by resolution of a general ordinary meeting. See "--Other Provisions--Fixed and
Variable Capital."

<PAGE>

     No resolution by the stockholders is required for decreases in capital
stock resulting from exercise of our right to withdraw variable shares or from
our repurchase of our own Shares or for increases in capital stock resulting
from our sale of Shares we previously purchased. See "--Other
Provisions--Purchase by the Company of its Shares" and "--Other
Provisions--Appraisal Rights."

     In order for any capital increase for payment in cash to take place,
holders of at least 85.0% of the Trust Shares must instruct the trustee of the
Control Trust to vote in favor of such capital increase.

Preemptive Rights

     Except in certain limited circumstances, in the event of a capital increase
through the issuance of new Shares for payment in cash or in kind, a holder of
existing Shares of a given Series at the time of the capital increase has a
preferential right to subscribe for a sufficient number of new Shares of the
same Series to maintain the holder's existing proportionate holdings of Shares
of that Series or, in the event of a capital increase through the issuance of
limited-voting or non-voting stock only, to subscribe for a sufficient number of
the shares to be issued to maintain the holder's existing proportionate holdings
of our capital stock. Preemptive rights must be exercised within 15 days
following the publication of notice of the capital increase in the Diario
Oficial de la Federacion (Official Gazette) or following the date of the
stockholders' meeting at which the capital increase was approved if all
stockholders were represented at such meeting; otherwise such rights will lapse.
Under Mexican law, preemptive rights cannot be waived in advance by a
stockholder, except under limited circumstances and cannot be represented by an
instrument that is negotiable separately from the corresponding share. The
Robinson Bours Stockholders, including the Selling Stockholders, have waived all
preemptive rights with respect to the Series B Shares and Series L Shares
comprised in the Units underlying the ADSs being offered in the Global Offering.
Holders of ADRs that are U.S. persons or are located in the United States may be
restricted in their ability to participate in the exercise of preemptive rights.
See "Description of American Depositary Receipts--Dividends, Other Distributions
and Rights."

Foreign Investment Legislation

     Ownership by foreigners of shares of Mexican companies is regulated by the
Ley de Inversion Extranjera (the "Foreign Investment Law") and by the Reglamento
de la Ley para Promover la Inversion Mexicana y Regular la Inversion Extranjera
(the "Foreign Investment Regulations"). The Ministry of Commerce and Industrial
Development and the Foreign Investment Commission are responsible for the
administration of the Foreign Investment Law.

     The Foreign Investment Law reserves certain economic activities exclusively
for the Mexican state and certain other activities exclusively for Mexican
individuals or Mexican corporations and limits the participation of foreign
investors to certain percentages in regard to enterprises engaged in activities
specified therein. Foreign investors may own up to 100% of the capital stock of
Mexican companies or entities, except for companies (i) engaged in reserved
activities as referred to above or (ii) with assets exceeding an amount to be
established annually by the Foreign Investment Commission (which has been set at
Ps.394 million), in which case an approval from the Foreign Investment
Commission will be necessary in order for foreign investment to exceed 49% of
the capital stock. Mexican and non-Mexican nationals will be entitled to hold
and to exercise the rights of a holder of the Units, the Series B Shares and the
Series L Shares. The Robinson Bours Stockholders have advised us that they
intend to maintain a control position directly in the form of B Units. Pursuant
to our bylaws, foreigners may only own Series B Shares up to 49.0% of such
series.

<PAGE>

Other Provisions

     Fixed and Variable Capital. As a sociedad anonima de capital variable, we
are permitted to issue shares constituting fixed capital and shares constituting
variable capital. The issuance of variable capital shares, unlike the issuance
of fixed capital shares, does not require an amendment of the bylaws, although
it does require approval at a general ordinary stockholders' meeting.

     Under our bylaws and CNBV regulations, variable capital may not be greater
than ten times the minimum fixed portion of our capital stock (the "Minimum
Capital") specified in the bylaws. No shares representing variable capital are
currently outstanding or will be issued in connection with the Global Offering.
The outstanding variable capital shares, if any, may be fully withdrawn by the
holders thereof. Except as otherwise provided under "--Appraisal Rights" below,
the Minimum Capital cannot be withdrawn. A holder of variable capital stock that
wishes to effect a total or partial withdrawal of such stock is required to
notify us in an authenticated written notice to that effect. If notice of
withdrawal is received prior to the last quarter of the fiscal year, the
withdrawal becomes effective at the end of the fiscal year in which the notice
was given. Otherwise, the withdrawal becomes effective at the end of the
following fiscal year.

     Redemption of our variable capital stock is made at the lower of (i) 95.0%
of the average share price quoted on the Mexican Stock Exchange during the 30
business days prior to the date on which the withdrawal is to become effective
or (ii) the book value per variable capital share as calculated from our
financial statements (as approved at a general ordinary stockholders' meeting)
for the fiscal year at the end of which the withdrawal is to become effective.
Any such amount to be paid by us would become due on the day following the
general ordinary stockholders' meeting referred to in clause (ii) above.

     Forfeiture of Shares. As required by Mexican law, the bylaws provide that
our current and future foreign stockholders are formally bound to the Mexican
Ministry of Foreign Relations (Secretaria de Relaciones Exteriores) to consider
themselves as Mexican nationals with respect to our Units and Shares that they
may acquire or of which they may be owners, and with respect to the property,
rights, concessions, participations or interests that we may own or rights and
obligations that are based on contracts to which we are party with the Mexican
authorities, and not to invoke the protection of their government under penalty,
should they do so, of forfeiting to the Mexican State the corporate
participation that they may have acquired. In the opinion of Franck, Galicia,
Duclaud y Robles, S.C., our special Mexican counsel, under this provision a
non-Mexican stockholder (including a non-Mexican holder of ADSs) is deemed to
have agreed not to invoke the protection of his own government by requesting
such government to interpose a diplomatic claim against the Mexican government
with respect to the stockholder's rights as a stockholder, but is not deemed to
have waived any other rights it may have with respect to its investment in us,
including any rights under U.S. securities laws. If the stockholder should
invoke such governmental protection in violation of this agreement, its Units
could be forfeited to the Mexican State. Mexican law requires that such a
provision be included in the bylaws of all Mexican corporations unless such
bylaws prohibit ownership of capital stock by foreign investors.

     Exclusive Jurisdiction. Our bylaws provide that legal actions relating to
any conflict between our shareholders and us, or among the shareholders in
connection with matters related to us, may be brought only in courts in Mexico
City.

     Duration. The duration of our existence under the bylaws is indefinite.

     Repurchase of our own Shares. We may repurchase our Units on the Mexican
Stock Exchange at any time at the then-prevailing market price. Any repurchases
will be charged to the Stockholders Equity as long as these shares belong to the
same company, or to the Capital Stock in the event that we convert these shares
to treasury stock, and in this last case no resolution of the Stockholders
meeting is required. At each annual ordinary stockholders meeting, the maximum
amount of resources that may be used to repurchase shares will be expressly
defined. The Board of Directors will name the persons responsible for the
operation of the repurchase process. The shares that belong to the Treasury
Stock or us can be resold among the public stockholders; in the latter case, no
resolution of a Shareholders meeting is necessary for an increase in capital.
The economic and voting rights corresponding to such repurchased Units or Shares
may not be exercised during the period in which such Units or Shares are owned
by us, and such Units or Shares are not deemed to be outstanding for purposes of
calculating any quorum or vote at any stockholders' meeting during such period.
Any repurchase of our own Units or Shares is subject to the limitation that the
Series L Shares may not at any time represent more than 25.0% of our capital
stock.

<PAGE>

     Repurchase in the Event of Delisting. In the event that the registration of
our Units or Shares in the Securities Section of the RNVI is canceled, whether
upon our request or pursuant to a resolution adopted by the CNBV, our bylaws and
CNBV regulations require that our controlling stockholders make a public offer
to purchase the Units or Shares owned by minority holders. Unless a different
price is approved by the CNBV, the Units or Shares must be purchased by such
controlling stockholders at the higher of (i) the average quotation price of the
Units or Shares for the 30 days prior to the date of the offer or (ii) the book
value of the Units or Shares, as reflected in the last quarterly report filed
with the CNBV and the Mexican Stock Exchange prior to the date of the offer.
Under the bylaws, our majority stockholders are not required to purchase the
Units or Shares owned by minority holders if holders of all the outstanding
shares of the Company approve the cancellation of the registration of the Shares
with the RNVI.

     Non-Subscribed Shares. With prior authorization of the CNBV, we may issue
non-subscribed shares, provided that such shares will be held by a depositary
institution and that there is compliance with the conditions of article 81 of
the Ley del Mercado de Valores. In any Extraordinary Shareholders Meeting at
which this issuance of non-subscribed Shares is approved, the preference rights
established by article 132 of the Ley General de Sociedades Mercantiles must be
respected. With a quorum at the meeting, the approval of the issuance will take
effect, even with respect to stockholders that were not present at the meeting,
such that we will be free to issue these shares with no prior publication. When
a minority of Shareholders representing at least 25% of the voting capital
stock, vote against the issuance of these shares, such issuance can not be made.
Any stockholder that votes against this issuance at the Shareholders meeting
will have the right to request that we sell its shares before issuing the new
non-subscribed shares. In such event, we will have the obligation to sell first
the shares belonging to such stockholders, at the same price that the
non-subscribed shares are to be offered to the public.

     Stockholder Conflicts of Interest. Under Mexican law, any stockholder that
has a conflict of interest with respect to any transaction must abstain from
voting thereon at the relevant stockholders' meeting. A stockholder that votes
on a business transaction in which its interest conflicts with that of ours may
be liable for damages if the transaction would not have been approved without
such stockholder's vote.

     Board Member Conflicts of Interest. Under Mexican law, any member of the
Board of Directors who has a conflict of interest with us in any transaction
must disclose such fact to the other members of the Board of Directors and
abstain from voting. Any member of the Board of Directors who violates such
provision may be liable for damages caused to us. Additionally, members of the
Board of Directors and statutory auditors may not represent other stockholders
at any stockholders' meeting.

     Appraisal Rights. Whenever the stockholders approve a change of corporate
purpose, a change in our nationality or transformation from one type of
corporate form to another, any stockholder entitled to vote on such change or
transformation who has voted against it has the right to withdraw from us and
receive the amount calculated as specified under Mexican law attributable to its
Shares, provided such stockholder exercises its right to withdraw within 15 days
following the adjournment of the meeting at which the change or transformation
was approved. Under Mexican law, the amount that a withdrawing stockholder is
entitled to receive is equal to its proportionate interest in our capital stock
according to the most recent balance sheet that has been approved by an ordinary
general meeting of stockholders. Because the Series L Shares may not vote with
respect to a change of corporate purpose or change of nationality, appraisal
rights with respect to such changes are not available to holders of Series L
Shares.

<PAGE>

     Actions Against Directors. Under Mexican law, an action for civil
liabilities against members of the Board of Directors may be initiated by
resolution of an ordinary stockholders' meeting. In the event the ordinary
stockholders' meeting decides to bring such an action, the persons against whom
such action is brought will immediately cease to be members of the Board of
Directors. Additionally, stockholders representing not less than 33.0% of our
outstanding Shares may directly take such action against members of the Board of
Directors, provided that (i) such stockholders have not voted against taking
such action at the relevant stockholders' meeting and (ii) the claim in question
covers damage alleged to have been caused to us and not merely to the individual
plaintiffs. Any recovery of damages with respect to such action will be for our
benefit and not for the stockholders bringing the action.

Exchange Controls

     Ownership by foreigners of Mexican companies is regulated by Foreign
Investment Law and by the Foreign Investment Regulations. The Ministry of
Commerce and Industrial Development and the Foreign Investment Commission are
responsible for the administration of the Foreign Investment Law.

     The Foreign Investment Law reserves certain economic activities exclusively
for the Mexican state and certain other activities exclusively for Mexican
individuals or Mexican corporations and limits the participation of foreign
investors to certain percentages in regard to enterprises engaged in activities
specified therein. Foreign investors may own 100% of the capital stock of
Mexican companies or entities, except for companies (i) engaged in reserved
activities as referred to above or (ii) with assets exceeding an amount to be
established annually by the Foreign Investment Commission (which has been set at
Ps.411.3 million), in which case an approval from the Foreign Investment
Commission shall be necessary in order for foreign investment to exceed 49% of
the capital stock. Mexican and non-Mexican nationals will be entitled to hold
and to exercise the rights of a holder of the Units, the Series B Shares and the
Series L Shares. The Robinson Bours Stockholders have advised us that they
intend to maintain a control position directly in the form of B Units. Pursuant
to our bylaws, foreigners may only own Series B Shares up to 49% of such Series.

Taxation

     The following is a general summary of the principal U.S. federal tax
consequences of the acquisition, ownership and disposition of Units or ADSs to a
holder that is a citizen or resident of the United States or a U.S. domestic
corporation or a person that is otherwise subject to U.S. federal income tax on
a net income basis in respect of the Units or ADSs (a "U.S. Holder"). This
discussion also summarizes the principal Mexican federal tax consequences of the
acquisition, ownership and disposition of units or ADSs by a holder that is not
a Mexican Resident (as defined below). This discussion does not purport to be a
comprehensive description of all of the tax considerations that may be relevant
to a decision to purchase Units or ADSs. In particular, the summary deals only
with U.S. Holders that will hold Units or ADSs as capital assets and does not
address the tax treatment of U.S. Holders that own (or are deemed to own) 10% or
more of our voting shares or that may be subject to special tax rules, such as
banks, insurance companies, dealers in securities or currencies, persons that
will hold Units or ADSs as a position in a "straddle" for tax purposes and
persons that have a "functional currency" other than the U.S. dollar.

<PAGE>

     The summary is based upon tax laws of the United States and Mexico as in
effect on the date hereof, which are subject to change, and such changes may
have retroactive effect. Prospective purchasers of Units or ADSs should consult
their own tax advisors as to the U.S., Mexican or other tax consequences of the
purchase, ownership and disposition of Units or ADSs, including, in particular,
the effect of any foreign, state or local tax laws.

     A Convention for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with Respect to Taxes on Income, and a Protocol thereto, between
the United States and Mexico (the "Tax Treaty") took effect on January 1, 1994.
The United States and Mexico have also entered into an agreement concerning the
exchange of information with respect to tax matters.

     In general, for U.S. federal income tax purposes, holders of ADRs
evidencing ADSs will be treated as the beneficial owners of the Units
represented by those ADSs.

Taxation of Dividends

     U.S. Tax Considerations. Cash dividends paid with respect to Units or Units
represented by ADSs to the extent paid out of our earnings and profits (as
determined under U.S. federal income tax principles) will be included in the
gross income of a U.S. Holder as ordinary income on the day on which the
dividends are received by the U.S. Holder, in the case of Units, or the
Depositary, in the case of Units represented by ADSs, and will not be eligible
for the dividends-received deduction allowed to corporations under the Internal
Revenue Code of 1986, as amended (the "Code"). Dividends paid in pesos will be
included in the income of a U.S. Holder in a U.S. dollar amount calculated by
reference to the exchange rate in effect on the day they are received by the
U.S. Holder, in the case of Units, or the Depositary, in the case of Units
represented by ADSs (regardless of whether such pesos are in fact converted into
U.S. dollars on such date). If such dividends are converted into U.S. dollars on
the date of receipt, a U.S. holder generally should not be required to recognize
foreign currency gain or loss in respect of the dividends. Subject to certain
exceptions for short-term and hedged positions, the U.S. dollar amount of
dividends received by an individual U.S. holder in respect of the Units or ADSs
after December 31, 2002 and before January 1, 2009 is subject to taxation at a
maximum rate of 15%. U.S. holders should consult their own tax advisors
regarding the availability of this reduced dividends tax rate in light of their
own particular circumstances. U.S. Holders should consult their own tax advisors
regarding the treatment of foreign currency gain or loss, if any, on any pesos
received which are converted into U.S. dollars on a date subsequent to receipt.

     Distributions to U.S. Holders of additional Units or preemptive rights
relating to Units with respect to their Units or ADSs that are made as part of a
pro rata distribution to all of our stockholders generally will not be subject
to U.S. federal income tax.

     A holder of Units or ADSs that is, with respect to the United States, a
foreign corporation or nonresident alien individual (a "Non-U.S. Holder")
generally will not be subject to U.S. federal income or withholding tax on
dividends received on such Units or such ADSs, unless such income is effectively
connected with the conduct by such holder of a trade or business in the United
States.

     Mexican Tax Considerations. Dividends, either in cash or in any other form,
paid with respect to the Shares constituting the Units or the ADSs will not be
subject to Mexican withholding tax.

<PAGE>


Taxation of Capital Gains

     U.S. Tax Considerations. Gain or loss realized by a U.S. Holder on the sale
or other disposition of Units or ADSs generally will be subject to U.S. federal
income taxation as capital gain or loss in an amount equal to the difference
between such U.S. Holder's basis in the Units or ADSs and the amount realized on
the disposition. Gain or loss recognized by a U.S. Holder on the sale or other
disposition of Units or ADSs will generally be long-term gain or loss if, at the
time of disposition, the U.S. Holder has held the Units or ADSs for more than
one year.

     Long-term capital gain recognized by a U.S. holder that is an individual is
subject to lower rates of federal income taxation than ordinary income or
short-term capital gain. The deduction of a capital loss is subject to
limitations for U.S. federal income tax purposes.

     Gain realized by a U.S. Holder on a sale or other disposition of Units or
ADSs generally will be treated as U.S. source income for U.S. foreign tax credit
purposes. Consequently, if a Mexican withholding tax is imposed on the sale or
disposition of the Units, a U.S. holder that does not receive significant
foreign source income from other sources may not be able to derive effective
U.S. foreign tax credit benefits in respect of these Mexican taxes. U.S. holders
should consult their own tax advisors regarding the application of the foreign
tax credit rules to their investment in, and disposition of, the Units.

     Deposits and withdrawals of Units by U.S. Holders in exchange for ADSs will
not result in the realization of gain or loss for U.S. federal income tax
purposes.

     A Non-U.S. Holder of Units or ADSs will not be subject to U.S. federal
income or withholding tax on gain realized on the sale of Units or ADSs, unless
(i) such gain is effectively connected with the conduct by such Non-U.S. Holder
of a trade or business in the United States or (ii) in the case of gain realized
by an individual Non-U.S. Holder, such holder is present in the United States
for 183 days or more in the taxable year of the sale and certain other
conditions are met.

     Mexican Tax Considerations. Gain on the sale or other disposition of ADSs
by holders who are not Mexican Residents (as defined below) will not be subject
to Mexican income tax. Deposits of Units in exchange for ADSs and withdrawals of
Units in exchange for ADSs will not give rise to Mexican income tax.

     Gain on the sale of Units by a holder who is not a Mexican Resident (as
defined below) will not be subject to Mexican tax if the transaction is carried
out through the Mexican Stock Exchange or other securities markets approved by
the Mexican Ministry of Finance, and provided certain requirements set forth by
the Mexican Income Tax Law are complied with. Sales or other dispositions of
Units made in other circumstances generally would be subject to Mexican tax,
except to the extent that a holder is eligible for benefits under an income tax
treaty to which Mexico is a party. Under the Tax Treaty, gain on the sale or
other disposition of Units by a U.S. resident (if eligible for benefits under
the Tax Treaty) who is a holder of less than 25% of our capital stock during the
12-month period preceding such sale or disposition will not be subject to
Mexican tax, unless (i) 50% or more of the fair market value of our assets
consist of "immovable property" (as defined in the Tax Treaty) situated in
Mexico, or (ii) such gains are attributable to a permanent establishment or
fixed base of such U.S. resident in Mexico.

     For a holder that is not a Mexican Resident and that does not meet the
requirements referred to above, gross income realized on the sale of Units will
be subject to a 5% Mexican withholding tax if the transaction is carried out
through the Mexican Stock Exchange. Alternatively, a holder that is not a
Mexican Resident can choose to be subject to a 20% withholding rate on the net
gain obtained, as calculated pursuant to Mexican Income Tax Law provisions.

     The Mexican tax rules governing the taxation of gains of holders who are
not Mexican Residents on dispositions of their shares or ADSs were amended
during 2002. Holders who are not Mexican Residents who disposed of their Units
or ADSs during 2002 should consult their own Mexican tax advisors on the Mexican
tax treatment of such dispositions.

     For purposes of Mexican taxation (Ley del Impuesto sobre la renta), an
individual is a resident of Mexico (a "Mexican Resident") if he or she has
established his or her home in Mexico, unless he or she has resided in another
country for more than 183 days, whether consecutive or not, during a calendar
year and can demonstrate that he or she has become a resident of that country
for tax purposes. A legal entity is a Mexican Resident if it has been
incorporated under Mexican law. A company is also considered to be a Mexican
Resident if its headquarters are located in Mexico. A Mexican citizen is
presumed to be a resident of Mexico for tax purposes unless such person can
demonstrate otherwise. If a person is deemed to have a permanent establishment
or fixed base in Mexico for tax purposes, such permanent establishment or fixed
base shall be required to pay taxes in Mexico on income attributable to such
permanent establishment or fixed base, in accordance with applicable tax laws.

U.S. Backup Withholding and Information Reporting

     A U.S. Holder of Units or ADSs may, under certain circumstances, be subject
to "backup withholding" with respect to certain payments to such U.S. Holder,
such as dividends paid by us or the proceeds of a sale of Units or ADSs, unless
such holder (i) is a corporation or comes within certain other exempt
categories, and demonstrates this fact when so required or (ii) provides a
correct taxpayer identification number, certifies that it is not subject to
backup withholding and otherwise complies with applicable requirements of the
backup withholding rules. Any amount withheld under these rules will be
creditable against the U.S. Holder's U.S. federal income tax liability. While
Non-U.S. Holders generally are exempt from backup withholding, a Non-U.S. Holder
may, in certain circumstances, be required to comply with certain information
and identification procedures in order to prove this exemption.

Other Mexican Taxes

     There are no Mexican inheritance, succession or similar taxes applicable to
the ownership, transfer or disposition of ADSs or Units by holders that are not
Mexican Residents; provided, however, that gratuitous transfers of Units may in
certain circumstances cause a Mexican federal tax to be imposed on the
recipient. There are no Mexican stamp, issue, registration or similar taxes or
duties payable by holders of ADSs or Units. Brokerage fees on securities
transactions carried out through the Mexican Stock Exchange are subject to a 15%
valued added tax.

Documents on Display

     The documents concerning us which are referred to in this document are
available at the our company headquarters, located at Ave. Tecnologico No.401,
Cd. Industrial, Celaya, Guanajuato, 38010, Mexico, for any inspection required.
Part of this information is available on our web page, at www.bachoco.com.mx.

<PAGE>


ITEM 11.  Quantitative and Qualitative Disclosures About Market Risk

     In the normal course of our business, we hold or issue various financial
instruments that expose us to financial risks involving fluctuations in currency
exchange rates and interest rates. Also, we are exposed to commodity price risk
in connection with fluctuations in the prices for our feed ingredients.

Currency Fluctuation

     Our exposure to market risk associated with changes in foreign currency
exchange rates relates primarily to our debt obligations and other expenses
which are denominated in U.S. dollars. Since we have significant liabilities
denominated in U.S. dollars, we are exposed to foreign exchange losses when the
peso declines in value against the U.S. dollar. The peso has been subject to
significant volatility in the past and may be subject to significant
fluctuations in the future.

     All of our sales are priced in Mexican pesos, and we have significant
expenses in U.S. dollars. A significant portion of our feed purchases are priced
in U.S. dollars, and other purchases may be influenced by U.S. dollar prices. A
devaluation of the peso will accordingly affect our earnings. In addition, the
Mexican peso exchange rate can directly and indirectly impact our results of
operations and financial position in several manners, including potential
economic recession in Mexico resulting from a devalued peso.

     Most of our debt is denominated in U.S. dollars. We experienced foreign
exchange losses of Ps.4.0 million in 2000. In 2001 and 2002, we had foreign
exchange gains of Ps.13.6 million and Ps.41.5 million, respectively.

     No assurance can be given as to the future valuation of the Mexican peso
and how further movements in the peso could affect our future earnings.

     We manage our exchange rate exposure primarily through management of our
financial structure, specifically by maintaining most of our debt through
long-term debt instruments. We engage in only limited hedging of our exposure to
foreign exchange risk, since hedging instruments have historically not been
economically feasible. We plan over a six-month period into the future and,
depending on the expected uncertainty for that period, decide if it is
economically advisable to purchase or sell any hedging instrument.

     During 2001 we signed forward contracts to hedge against exchange rate
losses attributable to feed purchases we made in U.S. dollars. The contracts
expired in 2002. As of December 2001, the outstanding forward contracts amounted
to $15.0 million (Ps.147.7 million), valued at the closing exchange rate. The
exchange rate differences was incorporated into the results of operations as
part of the comprehensive cost of financing.

     We entered into put options of Mexican peso futures in the Chicago market
that expired in December 2002. As a result of the expiration and exercise of
such options, as of December 31 2002, we have a short position on 250 Mexican
peso futures contracts that expire in June 2003, with a market value gain of
U.S.$190.7 million and a long position on 250 Mexican peso futures contracts
expiring in January 2003 with a market value of U.S.$171.9 million. The positive
difference of U.S.$18.7 million (Ps.194.9 million) was credited to results of
operations as part of the comprehensive cost of financing.

<PAGE>


     Based on our position in December of 2002, we estimate that a hypothetical
10% devaluation of the Mexican peso against the U.S. dollar would result in
exchange losses of Ps.8.8 million and an increase of Ps.0.2 million in our
annual interest expenses.

Interest Rates

         Our earnings may also be affected by changes in interest rates due to
the impact those changes have on our variable-rate debt instruments. As of
December 31, 2002, we had borrowings of approximately Ps.191.0 million pursuant
to variable rate debt instruments, representing approximately 1.7% of our total
assets.

     Based on our position on December 31, 2002, we estimate that a hypothetical
interest rate variation of 250 basis points on our U.S. dollar denominated debt
would result in increased interest expenses of approximately Ps.0.2 million per
annum. Any such increase would likely be offset by an increase in interest
income due to our significant cash and cash equivalent position.

Feed Ingredients

     The largest single component of our cost of sales is the cost of
ingredients used to prepare feed, including principally, sorghum, soymeal, corn,
fishmeal, meatmeal and, for certain chicken products, marigold extract. The
price of these ingredients is subject to significant volatility resulting, among
other factors, from weather, the size of harvests, transportation and storage
costs, governmental agricultural policies and currency exchange rates. In order
to reduce the potential adverse effect of grain price fluctuations, we vary the
composition of our feed to take advantage of current market prices for the
various types of ingredients used.

     Previously, we took advantage of the lower cost of feed ingredients
available from Mexican sources and increased the portion of our total needs that
we source locally, from approximately 40% in 1995 to approximately 60% in 1999.
We believe that local feed, particularly sorghum, is of superior quality
compared to imported feed ingredients. In addition, the use of local feed allows
us to save on transportation costs and import duties. Our feed costs were
favorably affected by changes in the Mexican government's agricultural policy,
beginning in 1991, that eliminated price supports for domestic farmers and
reduced procedural restrictions on importing grains, and by the reduction in
tariffs with the implementation of NAFTA beginning in 1994.

     However, this trend reversed in 2000, when only 45.0% of feed ingredients
were purchased from local sources. The change occurred mainly because grain for
the acquired Grupo Campi complexes is supplied from international markets due to
a lack of domestic supply in southern Mexico. In general, costs of domestic feed
ingredients tend to follow the international markets, although cost adjustments
do not occur simultaneously. In 2001, we purchased approximately 40.6% of feed
ingredients from local sources, while in 2002 we purchased approximately 30.1%
of feed ingredients from local sources.

     Based on results for 2002, we estimate that a hypothetical variation of 10%
in the cost of feed ingredients would have an impact of Ps.432.8 million, or
5.6%, on total cost of sales.

ITEM 12.  Description of Securities Other Than Equity Securities.

          Not applicable.

PART II.

<PAGE>


ITEM 13.  Default, Dividend, Arrearages and Delinquencies.

          None.

ITEM 14.  Material Modifications to the Rights of Security Holders and Use of
          Proceeds.

          None.

ITEM 15.  Controls and Procedures

     Within the 90 days prior to the date of this report, we carried out an
evaluation under the supervision and with the participation of our management,
including the Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. There are inherent limitations to the effectiveness of any system of
disclosure controls and procedures, including the possibility of human error and
the circumvention or overriding of the controls and procedures. Accordingly,
even effective disclosure controls and procedures can only provide reasonable
assurance of achieving their control objectives. Based upon and as of the date
of our evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the disclosure controls and procedures are effective to provide
reasonable assurance that information required to be disclosed in the reports we
file and submit under the Exchange Act is recorded, processed, summarized and
reported as and when required.

     There were no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to the date of
such evaluation.



ITEM 16. (Reserved)

PART III.

ITEM 17.  Financial Statements.

          Not applicable.

ITEM 18.  Financial Statements.

          See pages F-1 through F-37, incorporated herein by reference.

<PAGE>



ITEM 19.  Exhibits.

          Documents filed as exhibits to this Form 20-F:
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<S>        <C>      <C>

   Exhibit No.                                                    Description
   -----------                                                    -----------
      1.1           Bylaws (estatutos sociales) of Industrias Bachoco, S.A. de C.V. (together with an English translation)
                    (incorporated by reference on our registration statement on Form F-1 filed on August 22, 1997 (File No.
                    333-7472)).

      2.1           Form of Deposit Agreement, among Industrias Bachoco, S.A. de C.V., the Depositary and holders from time
                    to time of American Depositary Receipts issued thereunder, including the form of American Depositary
                    Receipt (incorporated by reference on our registration statement on Form F-1 filed on August 22, 1997
                    (File No. 333-7472)).

      2.2           Trust Agreement, dated April 1, 1995, among Banco
                    Internacional, S.A., Institucion de Banca Multiple, Grupo
                    Financiero Prime Internacional, as trustee, and the
                    stockholders of the Company named therein, together with an
                    English translation, (incorporated by reference on our
                    registration statement on Form F-1 filed on August 22, 1997
                    (File No. 333-7472)).

      2.3           Trust Agreement, dated August 20, 1997, among Banco
                    Internacional, S.A., Institucion de Banca Multiple, Grupo
                    Financiero Bital, as trustee, and the stockholders of the
                    Company named therein, together with an English translation,
                    (incorporated by reference on our registration statement on
                    Form F-1 filed on August 22, 1997 (File No. 333-7472)).

      8.1           Significant Subsidiaries.

      12.1          Certification of the Chief Executive Officer and Chief Financial Officer of the accuracy and
                    completeness of this Form 20-F.

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