April 2, 2009

Brazilian beef processor Independencia SA is shutting three units and laying off 1,400 workers in response to lower demand for beef and falling prices, the privately-owned company said on Wednesday (Apr 1).

The firm is closing a slaughter house and deboning plant in Mato Grosso as well as a deboning plant and a distribution center, both in Sao Paulo state.

The closures follows the company's announcement in March that it was closing two other factories, in Goias and Mato Grosso do Sul states.

The company said that the closure of these units is part of an ongoing program to adjust Independencia's operations to the current market reality, which was severely hit by lower international demand, meat oversupply both in the domestic and the export market, and falling meat prices.

Independencia filed for bankruptcy protection simultaneously in Brazil and the US in early March, citing unsustainable debt servicing costs due to a weaker Brazilian currency and increased bank spreads.

Since the beginning of its adjustment program, Independencia has closed eight of its 23 industrial plants and laid off 6,200 workers.

Local meat firms have been hit hard by the global financial crisis, which dried up credit lines for exports.

Key buyers in countries like Russia are struggling to get loans to purchase more imports, have been using up their stocks instead.