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JBS to Lease Frangosul Plants in Brazil

6 May 2012, at 2:24pm

BRAZIL - Brazilian meat processing giant, JBS SA, is to lease the assets of Brazilian poultry processor Frangosul, a company controlled by the French group, Doux.

JBS said the move is another step to become the largest producer and meat processor in the world.

The company is already the second largest operator in the global poultry segment.

Under the agreement signed, JBS said it will not assume any pending, charges, restraint, seizure or inability of any other nature.

This is a lease asset and JBS said it will hire all current Frangosul employees and continue all contracts with the integrated service providers and third parties.

With this new Brazilian chicken operation, JBS will boost its production capacity by 15 per cent to approximately nine million birds per day.

In Brazil, the operations are distributed in major grain–producing states and will add to existing chicken units in 12 states, Mexico and Puerto Rico, where the JBS already has one of the largest industrial parks in the world in this segment.

JBS says these assets will allow it to act consistently in the Brazilian chicken market and may also transfer technology and knowledge between their units.

United States and Brazil are the two largest players in the global poultry segment. Together they represent 30 per cent of the world poultry market, 36 per cent of global production and 70 per cent of all chicken meat exported worldwide.

These indicators demonstrate the competitiveness of both countries, the market penetration they already have in various markets and the strength of their domestic markets.

The rental of the assets of Frangosul is seen as a sign of confidence that JBS has in the Brazilian agribusiness.

With this operation, JBS will have approximately 60,000 employees in the country and will ensure about 6,000 direct jobs in the plants of Frangosul are maintained. The deal will also ensure the continuation of 1,500 integrated producers that are part of the production chain. A total of 20,000 direct and indirect jobs will be preserved.

To protect the assets, JBS will create a new business division in its structure to be called ‘Birds JBS Brazil’.

The new unit will have as president and CEO James Cleary, who has long experience in the meat industry in Brazil.