December 10, 2007

Brazil's JBS takes wider market presence after Italy co-deal

Last week's signed deal between Brazilian beef company JBS SA and Italy's Cremonini is seen to give Brazil's top beef a blanket of global beef trade everywhere except southeast Asia and the Middle East.

JBS, owner of Brazil's leading beef company, the Friboi Group, announced on Thursday (December 6) that it had entered into a joint venture with Italian beef company Cremonini to acquire a 50 percent stake in Inalca, a beef producer wholly owned by Cremonini at the time.

The transaction which was worth 225 million euros is set to give JBS a broader distribution in meat-packing facilities in Africa, Cuba, Europe and Russia, not to mention facilities already acquired by JBS in Australia, Argentina and the US. 

Inalca has annual sales of around EUR1.04 billion with 10 production units throughout Italy alone, and 5,000 clients in Europe, Africa and Russia. The company processes around 800,000 bovines daily throughout its facilities in Italy.

Some 35 percent of the company's revenues come from overseas sales, with distribution operations in Russia, Angola, Congo and Algeria, plus two new beef-processing plants in Moscow and Poland in their final stages of construction, JBS said at a press conference on Friday (December 7).

The deal has expanded JBS' global operations to 41 production facilities with projected consolidated pro-forma sales of US$11.5 billion for 2007. The figures include the company's 2007 acquisition of US-based Swift & Company in Greeley, Colorado.

JBS chief executive officer Joesley M. Batista said the JBS and Cremonini's venture aims to "grow through acquisitions as well as organic growth in the packaged foods and fresh meat markets".

JBS made nine acquisitions of various sizes in 2007, including Argentina's Col-Car SA in October and Swift & Company in July.

Brazil is the world's leading beef exporter.