After Buying US Swift, Friboi, Brazil’s Largest Abattoir, Wins the World

Brazil's Friboi workers prepare the meat Brazil's JBS group, which owns slaughterhouse Friboi, the largest in Brazil, has dived headfirst overseas. The company now also produces in the United States, Italy, Argentina and Australia, where it acquired local companies, like Swift Armour, in Argentina, Swift & Company, in the United States and Inalca, in Italy.

In Australia, the Brazilian group controls Meat Holdings Pty, which belongs to the North American Swift.

According to the investor relations director at the company, José Paulo Macedo, operations in Brazil and abroad represent annual revenues of US$ 13 billion. The group's internationalization process began in 2005, with the acquisition of the Argentine Swift. The other acquisitions were made in 2007, and JBS is currently the largest cattle beef company in the world.

The group also has distribution centers abroad, including in Argentina, and exports are responsible for a large share of revenues. In the case of Brazil, for example, Macedo said that 60% of revenues come from foreign sales and the rest come from the domestic market. With regard to the volume of beef traded, the opposite is true, 60% stays in Brazil.

According to the executive, of the over US$ 4 billion Brazil exported in beef from January to November, US$ 1 billion were sold by Friboi. "We represent 25% of market revenues as a whole," he said.

Exports are also very strong in operations in Australia, where they are responsible for 85% of revenues. In the United States, however, foreign sales are responsible for just 10%, as most of the products are turned to the local market.

Entry into markets that are closed to Brazil was one of the reasons for JBS to decide on the acquisitions. The United States, for example, do not buy raw beef from Brazil, only the industrialized product. Through Australia, in turn, it is possible to sell to Japan.

The Arab countries are also important to the group. According to Macedo, Friboi is the main producer of halal beef in the country, and on certain days the company's slaughterhouses only slaughter animals following Islamic demands.

With regard to the size of operations, the executive says that in Brazil the company has the largest and most complex structure, breeding cattle on grasslands in nine different states and operating 25 industrial units. The business in the US, however, despite having just four plants, generates the largest volume of revenues.

Anba – www.anba.com.br

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