Sao Paulo | Reuters — Brazilian meat packer JBS will have sufficient cash flow in 2015 to bankroll potential acquisitions, but for the time being plans to focus on consolidating gains from recent takeovers, CEO Wesley Batista said on Tuesday.
The company in late March completed the US$1.125 billion buyout of Australian meats company Grupo Primo Smallgoods started in 2014, which will give it a base to boost sales in the Asia Pacific region.
Batista said the company had no plans “to establish operations” in Asia at this time but would focus on organic growth in South America, North America and Australia.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Writing last month in the company’s year-end report, Batista said JBS “will prioritize organic growth and focus on all aspects of improving our financial metrics, thus creating incremental value for our shareholders.”
On Tuesday he also ruled out issuing new shares in the U.S. and Brazilian markets for the near future.
Although pessimism about the Brazilian economy’s growth has intensified in the past months, Batista said it had not been reflected in the company’s domestic sales.
A recovery in the company’s exports of Brazilian beef, however, is not likely in 2015, he said.
“The greatest pressure over margins have come from the drop in exports, especially to Russia and Venezuela, due to the drop in oil prices and the devaluation of their currencies,” Batista said.
He added, though, that local beef demand and prices are expected to remain firm in the near term due to tight live cattle supplies.
JBS, founded in the interior center-west farm belt of Brazil, has become the world’s largest beef exporter over the past decade. The company has also expanded into poultry and pork production with the help of acquisitions in the U.S. and Australia and financing from Brazil’s BNDES national development bank.
JBS, which took over Alberta beef packer XL Foods in 2013, noted last month its Canadian business in fiscal 2014 “improved compared to the same period last year and presented volume and price growth on exports.”
— Reporting for Reuters by Aluisio Alves; writing by Caroline Stauffer and Reese Ewing. Includes files from AGCanada.com Network staff.
