September 1, 2011

JBS restructures operations to save costs

In order to have tax savings and enhance productivity, Brazilian meat giant JBS is to restructure parts of its local operations.

According to Reuters, the company has said it will suspend operations at its Presidente Epitacio unit in Sao Paulo state due to tax inefficiencies and transfer output north-west to a unit in neighbouring Mato Grosso do Sul state.

Slaughtering and deboning units in Parana, Minas Gerais, Mato Grosso and Roraima states will also be moved to other locations.

The restructuring is expected to enable JBS to raise output from its domestic operations by 5% through efficiency gains and enable the company to save around BRL200 million (US$125 million) a year by reducing its tax bill and overheads.

In a bid to minimise the social impact of the restructuring on the local communities, JBS has said it will offer a substantial portion of employees a transfer to other units.

The company also claimed that the moves would create new jobs. "The balance between the layoffs and the number of people hired in the plants that will increase slaughter and deboning activities will be positive, with 500 new jobs in the communities," the firm said Tuesday (Aug 30).

JBS said it did not expect to resume operations at units where it was halting work as long as the current tax regime that applied to them remained in place.