JBS shuffles operations in Brazil

by Editor fleischwirtschaft.com
Friday, September 02, 2011

JBS S.A. is reorganizing operations at six plants to improve efficiencies and boost domestic production.

The Brazil-based animal protein behemoth said that fiscal inefficiencies resulting from tax legislation, proximity to other plants and a desire to improve the efficiency of its product portfolio prompted the move, aimed at expanding the company's presence in the domestic market.

The plan involves shuttering the Presidente Epitacio plant in São Paulo state and transferring its production to facilities in Mato Gross do Sul, transferring slaughter and deboning operations from the Teófilo Otoni unit in Minas Gerais state to the company's Iturama and Ituiutaba plants, relocating slaughter and deboning operations of the Maringá plant in Paraná state to the company's facility in Naviraí, moving deboning activities from plants in Água Boa and Alta Floresta to plants in Barra do Garças and Diamantino, double the slaughter at Diamantino to 2,000 head per day and transferring deboning operations at the Pimenta Bueno plant to the Vilhena plant.

The company expects the strategy to boost production by 5% through more efficient capacity utilization without interruption in service to customers in Brazil and abroad. The company also expects to generate savings of some US$125 mill. on an annualised basis between cost reduction and tax efficiencies. Harvesting cattle in the same states in which the animals are sourced limits tax exposure, for example.

JBS said it will offer job transfers to a "substantial portion" of employees and support the relocation of workers who have lost their jobs. The balance between the layoffs and the number of people hired in the plants that will boost slaughter and deboning activities will be positive, creating 500 new jobs in those communities.
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