Brazilian meats giant JBS SA plans to focus on Australia, U.S. pork operations and its processed foods division under a 2015 strategy focused on organic expansion rather than acquisitions, CEO Wesley Batista said on Thursday, and estimated that between 2.5 billion to 3 billion reais (806 million/967 million dollars) in capital investment will be needed this year to support the strategy.
The company first said it would not seek new acquisitions this year in its fourth-quarter earnings statement on Wednesday, ending a years-long strategy of aggressive takeovers.
We have many fruits to harvest, Batista said of the company's recent acquisitions.
JBS plans to finalize its 1.25bn purchase of Australian processed foods maker Primo Smallgoods this month. The deal, announced in November, is an opportunity to increase sales in Asian markets.
The company also has more synergies to reap from the 2013 purchase of Brazilian poultry producer Seara, Batista said.
After reporting 2014 revenue of 120 billion reais, the one-time family-run butcher surpassed miner Vale SA as Brazil's largest private sector non-bank company by revenue.
Batista said JBS would continue to protect its business with hedge contracts in dollars, a strategy it adopted to avoid losses related to a weakening real. About 80% of JBS's debt is in dollars.
Last year we made the decision to be 100 percent hedged. We paid a heavy price at the beginning of the year ... but we had the right strategy, Batista said.
Batista said a suspected case of avian influenza in Arkansas identified on Tuesday would have little or no impact on the finances of JBS or its U.S. poultry affiliate Pilgrims Pride .
Exports at Pilgrim's represent 8% of our business ... even if some markets close we do not think this will hurt our profit margins, Batista said.
Top Comments
Disclaimer & comment rulesThis guy should be running the country after they have shot the existing bunch of PT crooks.
Mar 14th, 2015 - 01:23 pm 0At least he understands money and risk, words that seem to have passed the PT by.
JBS is another corruption scandal waiting to happen, fueled on cheap loans (incredibly market distorting practice in terms of true competition for bank financing and its effect on the meat industry competition) in return for donations back to the political powers.
Mar 14th, 2015 - 05:14 pm 0@ 2
Mar 14th, 2015 - 06:56 pm 0Oh dear!
But why am I not surprised? In any corrupt to the core society as Brazil has turned out to be, those companies who lead the pack HAVE to be corrupt to grow and 'prosper'.
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