JBS S.A.

JBS S.A. is a Brazilian company that is the largest meat processing company (by sales) in the world, producing factory processed beef, chicken and pork, and also selling by-products from the processing of these meats. It is headquartered in São Paulo.[2] It was founded in 1953 in Anápolis, Goiás. As of 2017, the company had 150 industrial plants around the world.[3] J&F Investimentos is a 42% indirect shareholder in JBS S.A.,[4] which is listed on American stock markets as JBSAY.[5] J&F Investimentos is wholly owned by Joesley Batista and Wesley Batista. As of May 2017, JBS S.A. remains the world's biggest butcher.[6]

JBS S.A.
TypeSociedade Anônima
B3JBSS3
Ibovespa Component
IndustryFood processing
Founded1953
FounderJosé Batista Sobrinho
Headquarters,
Area served
Worldwide
Key people
Gilberto Tomazoni, (CEO) Jeremiah O‘Callaghan, (Chairman)
ProductsFood and beverages
RevenueIncrease US$ 53.0 billion (2020)[1]
Increase US$ 298 million (2017)[1]
Increase US$ 138 million (2017)[1]
Total assetsIncrease US$ 28.22 billion (2017)[1]
Total equityIncrease US$ 6.78 billion (2017)[1]
Number of employees
233,797 (2017)[1]
ParentJ&F Investimentos
SubsidiariesJBS USA
Seara
JBS Foods International
Websitejbsglobal.com
jbs.com.br

HistoryEdit

1953–2000: Formation in BrazilEdit

JBS was initially established as a slaughtering business by rancher José Batista Sobrinho, a rancher in Anápolis, Brazil, in 1953. (The company's name comes from the founder's initials.) Sobrinho's business began to expand when the establishment of Brazil's capital, Brasilia, brought a new market within reach of his ranch. Over the late 1960s Sobrinho expanded into owning slaughterhouses; then, in the 1980s, the company began expanding within Brazil and purchasing other meat processing companies.[7] In subsequent years, the company has grown to become the world's largest company in the beef sector with the acquisition of several stores and food companies in Brazil and the world.[8]

JBS became a publicly held company in 2007, and in the same year received a major investment from BNDES (Brazilian Development Bank).[7]

2007–2010: US acquisitionsEdit

In 2007, JBS went through with a US$225m acquisition of U.S. firm Swift & Company,[8] which was the third largest U.S. beef and pork processor, renamed as JBS USA. It leads the world in slaughter capacity, at 51.4 thousand head per day, and continues to focus on production operations, processing, and export plants, nationally and internationally.[citation needed] With the new acquisition, JBS entered the pork market, to end the year as the third largest producer and processor of this type of meat in the United States. The acquisition expanded the company's portfolio to include rights to the worldwide use of the Swift brand.[citation needed]

The next year, JBS acquired Smithfield Foods' beef business. It was renamed JBS Packerland.[citation needed]

On 31 August 2010 it was announced that the company had acquired 64% of Pilgrim's Pride for a bid of US$800 million, establishing JBS's position in the chicken production industry,[9] but currently the company owns 75.3% of Pilgrim's Pride.[citation needed]

2010: South American operationsEdit

On September 16, 2009, JBS announced that it had acquired the food operation of Grupo Bertin, one of three Brazilian market leaders, consolidating its position as the largest beef producer in the world. The banks JP Morgan Chase and Santander Brasil assisted in the transaction.[9]

In August 2010, it was reported that JBS was considering to sell some of the eight slaughterhouses it owned in Argentina because of "scarce livestock and export restrictions".[9] Between 2007 and 2010, JBS received around $2.5 billion in investments from BNDES.[10]

2011-2016: Expansion, CanaMex acquisitionsEdit

As of 2011, JBS had been trying to bid to gain control of Sara Lee Corporation's meat business. JBS had shown interest in the meats business but struggled to push forward with a bid for the entire company.[11]

On 9 January 2013, JBS USA acquired the Canadian operations of XL Foods, chiefly the XL Lakeside beef processing plant in Brooks, Alberta which had at the time the capacity to process 4,000 head of cattle per day.[12]

On May 27, 2014, Pilgrim's Pride Corporation, 75% owned by JBS S.A., made an unsolicited $5.6 billion bid for Hillshire Brands Co. (HSH).[13]

On July 28, 2014, Tyson Foods, Inc. announced its intention to sell Tyson de México and Tyson do Brasil, its Mexican and Brazilian poultry subsidiaries, to JBS S.A. for $575 million in cash by the end of 2014, pending regulatory approval.[14]

In 2015, JBS bought the US pork business of Cargill Inc. for $1.45 billion.[15]

Also in 2015, JBS S.A. created a board of compliance directors in Brazil.[16]

2016: IPO of US unitEdit

In December 2016, JBS announced a re-organization plan, which involved an initial public offering (IPO) in the United States for its international operations, through JBS Foods International. At the time, it had units on five continents.[17]

2017: Brazilian food market dropEdit

According to industry estimates, as of 2017, JBS USA was the second-largest processor of beef and pork in the United States, while JBS-owned Pilgrim's was the second-largest poultry company.[15]

By February 2017, JBS had been accused of wrongdoing in a wider investigation into compliance issues in Brazil, although it planned to increase its board of compliance directors from three people to eight. At the time, the company's controlling shareholder J&F Investimentos SA was being investigated "in relation to fraud at state-run companies’ employee pension funds".[16] The investigation looked into whether JBS possibly benefited from the scheme, including JBS chairman Joesley Batista, who denied wrongdoing.[17] By March 2017, JBS SA remained the world's largest supplier of animal protein,[18] after a series of acquisitions in part funded by loans from banks controlled by the Brazilian government.[19] Global operations included brands Seara, Swift, and Moy Park.[6] In March 2017, JBS was accused by Brazil's environmental regulator of buying cattle raised on illegally deforested Amazon land, with JBS denying wrongdoing.[6]

On March 17, 2017, it was announced that Brazil was investigating its meat-packing industry for "allegedly bribing food-sanitation inspectors", with JBS SA among the dozens of firms targeted,[17] in particular a single employee.[19] JBS shares dropped 10 percent with the announcement.[17] JBS denied any wrongdoing and said it had taken “applicable measures” against the one employee included in the investigation, due to his alleged relationships with government inspectors.[20] The announcement of the police allegations led to various nations considering banning Brazilian beef imports.[21] China, 20 other countries, and the European Union subsequently issued temporary bans on Brazilian meat shipments, or increased scrutiny.[18] On March 23, 2017, JBS SA said it had slashed beef production, halting beef production in 33 of its 36 plants for three days, with a plan to cut production by 35% of capacity at all its units. JBS stated the "measures aim at adjusting production until there is a decision about the embargoes imposed by importers."[18] The company also spent more on advertising.[6] After initial trade disruptions, Brazilian meat companies regained access to most international markets.[20]

2017: BNDES and bribery investigationsEdit

On May 12, 2017, authorities announced that they were investigating whether JBS SA had received illegal financing advantages from state-owned bank BNDES. Dubbed "Operation Bullish", police stated that these had led to a loss of around $385 million in public funds. JBS said the financing was lawful, and BNDES said it was cooperating with authorities. Executives including CEO Wesley Batista and chairman Joesley Batista were questioned by federal police. The court forbade the Batistas from restructuring the business during the investigation.[19] On May 16, 2017 JBS said it might delay its planned IPO due to legal troubles. The CEO made it clear, however, that the IPO was not canceled.[6]

On May 17, O Globo reported that it had obtained a recording of Michel Temer encouraging JBS chairman Joesley Batista to "bribe a jailed former legislator to buy the lawmaker’s silence." The news resulted in protests and calls for Temer's resignation, and the Brazilian stock market dropped. Temer denied wrongdoing.[22] On May 17, 2017 O Globo reported that Joesley Batista, through J&F Investimentos, allegedly paid bribes to three presidents. Documentation of the payments[clarification needed] was released by the Supreme Court on May 19.[10] On May 19, 2017, Joesley Batista admitted to paying bribes to Michel Temer, Dilma Rousseff and Luiz Inácio Lula da Silva, over the previous 14 years. Joesley Batista told prosecutors J&F Investimentos had paid a total of $123 million in bribes to Brazilian politicians in recent years.[15] All three presidents denied accepting bribes. Temer alleged Batista had doctored evidence, including a recording of Temer talking to Batista, to make money from the scandal through insider trading. Batista denied illegal share purchases. As of May 22, the Comissão de Valores Mobiliários (CVM) was demanding $3.4 billion from J&F Investimentos as part of a promised plea deal, according to the press.[23] The former head of CVM referred to testimony that asserted J&F Investimentos had bribed 1,829 politicians.[10] In May 2017 JBS retained law firm Baker McKenzie to negotiate possible criminal charges with the United States Department of Justice under the Foreign Corrupt Practices Act.[24][25]

Reports May 31, 2017 said J&F Investimentos had agreed to pay US$3.2 billion in fines, for leniency from the Brazilian government "over 25 years after admitting to giving roughly $150 million—mostly in bribes—to Brazilian politicians."[26] JBS shares afterwards rose 9% on São Paulo's stock exchange. In exchange for their cooperation, the chairman and his older brother avoided jail time. All three former presidents continued to deny accepting bribes from Joesley Batista.[26]

2017: Recruitment of safety director, Mexican divestmentEdit

In early August 2017, JBS hired Alfred Almanza as its global head of food safety. Almanza had previously been the head of food safety at the U.S. Department of Agriculture.[27]

On August 3, 2017, it was reported that JBS was selling its stake in its Mexican unit of Vigor Alimentos to Grupo Lala.[28]

2018: United States Department of Agriculture bailoutEdit

JBS, a Brazilian-owned company, received $22.3 million from the USDA farm bailout package of 2018.[29]

COVID-19 pandemicEdit

At least 277 JBS USA workers at a plant in Greeley, Colorado, were presumed to be infected with coronavirus disease 2019 in April 2020, leading to the closure of this large meat processing operation with over 3,000 employees;[30][31] the plant reopened after a 9-day closure.[32] The Weld County, Colorado Department of Public Health, where Greeley is located, reported that employees had said that the JBS plant had a "work while sick" culture. The company denied any such pressure on workers.[33] By April 15, 102 workers had tested positive for the coronavirus, and four had died.[34] Outbreaks of Covid-19 have also been found in five other JBS beef processing plants, in Souderton, Pennsylvania; Plainwell, Michigan; Green Bay, Wisconsin; Cactus, Texas; and Grand Island, Nebraska.[35]

With 600 workers confirmed and probable cases in the JBS Foods plant in Brooks, Alberta, 7% of the population tested positive for COVID-19. As of May 9, 510 workers had recovered, but one worker died.[36] On 22 April it came to light that even though the plant had added a shift premium of $4 an hour, many employees skipped their shifts forcing the company to reduce their schedule to one shift.[37] As of April 21, the company claimed that there had been no walk-offs.[38]

CyberattackEdit

JBS was targeted by a cyberattack in late May 2021, which forced the company to temporarily shut down slaughterhouses in Australia, Canada and the United States.[39][40] The company stood down 7,000 workers across Australian operations and up to 3,000 workers in Canada and the United States.[41] On June 2021, JBS paid $11 million in ransom, using Bitcoin, to put an end to the cyberattack. Chief executive Andre Nogueira said: "This was a very difficult decision to make for our company and for me personally".[42]

Plants and subsidiariesEdit

JBS's production structure is embedded in consumer markets worldwide, with plants installed in the world's four leading beef producing nations (Brazil, Argentina, United States, and Australia), serving 110 countries through exports.[citation needed]

Board of directorsEdit

As of April 30, 2019, board members include:[43]

  • Jeremiah O'Callaghan (chair)
  • José Batista Sobrinho
  • Aguinaldo Gomes Ramos Filho
  • Gilberto Meirelles Xandó Baptista
  • Wesley Mendonça Batista Filho
  • José Guimarães Monforte
  • Cledorvino Belini
  • Alba Pettengill
  • Márcio Guedes Pereira Júnior

See alsoEdit

ReferencesEdit

  1. ^ a b c d e f "Results for the Fourth Quarter and Year ended March 31, 2017" (PDF). JBS S.A. Retrieved 2018-04-13.
  2. ^ JBS S.A. (2011). "Contact us". "Address Avenida Marginal Direita do Tietê, 500 Vila Jaguara - São Paulo/SP - Brazil CEP: 05118-100." Retrieved on 2011-02-03 from "Archived copy". Archived from the original on 2012-12-31. Retrieved 2011-02-04.CS1 maint: archived copy as title (link).
  3. ^ "The World's Largest Beef Company Is Planning a U.S. IPO in 2017". Fortune. Retrieved 7 December 2017.
  4. ^ "J&F Investimentos Agrees to Financial Terms of Leniency Agreement". GlobeNewswire. May 31, 2017.
  5. ^ "JBSAY". NASDAQ. 11 May 2020.
  6. ^ a b Keren Blankfeld (2011-05-09). "JBS: The Story Behind the World's Biggest Meat Producer". Forbes.
  7. ^ a b Elzio Barreto (2007-05-29). "Brazil's JBS-Friboi to buy Swift for US$225 mln". Reuters.
  8. ^ a b c "JBS seen struggling to sell Argentine beef plants". Reuters. 2010-08-31.
  9. ^ a b c Pearson, Samantha; Magalhaes, Luciana (May 21, 2017). "Brazilian Bribery Allegations Escalate Clash Between Government, Businesses". The Wall Street Journal. New York City, United States. Retrieved May 22, 2017.
  10. ^ UPDATE 1-JBS shares fall amid fears of new bid for Sara Lee, Reuters
  11. ^ "JBS Acquires Canadian Operations of XL Foods". GLOBE NEWSWIRE. 9 January 2013.
  12. ^ [1], Bloomberg
  13. ^ Tyson Foods, Inc. (2014-07-28). "Tyson Foods to Sell Mexico and Brazilian Poultry Businesses" (PDF).
  14. ^ a b c Pearson, Samantha; Megalhaes, Luciana (May 19, 2017). "Political Crisis Grips Brazil as Firm Admits to Bribing Nation's Leaders". The Wall Street Journal. New York City, United States. Retrieved May 20, 2017.
  15. ^ a b Pearson, Samantha; Jelmayer, Rogerio (February 23, 2017). "Brazil Corruption Scandal Has Companies Rushing to Bulk Up Compliance Ranks". Wall Street Journal. New York City, United States. Retrieved May 20, 2017.
  16. ^ a b c d Jelmayer, Rogerio; Magalhaes, Luciana (March 17, 2017). "Brazil Police Launch Massive Anticorruption Probe of Meatpacking Industry". Wall Street Journal. New York City, United States. Retrieved May 20, 2017.
  17. ^ a b c Trevisani, Paulo; Magalhães, Luciana. "JBS Cuts Beef Production as Brazilian Officials Try to Reopen Export Markets". The Wall Street Journal. New York City, United States. Retrieved May 20, 2017.
  18. ^ a b c Magalhaes, Luciana; Lewis, Jeffrey T. (May 12, 2017). "Meatpacker JBS Probed by Brazilian Police Over Loans From BNDES". Wall Street Journal. New York City, United States. Retrieved May 20, 2017.
  19. ^ a b Freitas Jr, Gerson; Valle, Sabrina. "Worst May Be Over in Brazil Meat Scandal as Curbs Lifted". Bloomberg. Retrieved 29 March 2017.
  20. ^ Kiernan, Paul (March 20, 2017). "Brazil Seeks to Contain Fallout From Meat Scandal". The Wall Street Journal. New York City, United States. Retrieved May 20, 2017.
  21. ^ T. Lewis, Jeffrey (May 19, 2017). "Brazil Stocks, Currency Recover Somewhat After Temer-Related Plunge". Wall Street Journal. New York City, United States. Retrieved May 20, 2017.
  22. ^ "MISCONDUCT IN AGROHOLDINGS. THE CASE OF JBS". Large Scale Agriculture. 16 January 2019. Retrieved 15 January 2021.
  23. ^ Freitas Jr., Gerson (May 23, 2017). "Batista Bonds Worst in Emerging Markets on JBS Debt Concerns". Bloomberg News. Archived from the original on May 24, 2017. Retrieved May 29, 2017.
  24. ^ Godoy, Marcelo; Salomão, Alexa; Trevisan, Claudia (May 24, 2017). "JBS contrata advogados para se defender nos EUA" [JBS hires lawyers to defend itself in the U.S.]. O Estado de S. Paulo (in Portuguese). Archived from the original on May 24, 2017. Retrieved May 29, 2017.
  25. ^ a b Magalhaes, Luciana; Kiernan, Paul (May 31, 2017). "JBS Parent to Pay $3.2 Billion to Settle Corruption Investigations in Brazil". The Wall Street Journal. New York City, New York. Retrieved June 1, 2017.
  26. ^ Bunge, Jacob (August 3, 2017). "JBS Hires Former USDA Official to Head Food Safety". The Wall Street Journal. New York City, New York, United States. Retrieved August 10, 2017.
  27. ^ JBS sells Vigor to Mexico's Lala, United Kingdom: Financial Times, August 3, 2017, retrieved August 10, 2017
  28. ^ Stein, Jeff (January 9, 2019). "Trump farm bailout money will go to Brazilian-owned meatpacking firm, USDA says". Washington Post. Retrieved January 9, 2019 – via MSN News.
  29. ^ MOLTENI, MEGAN (7 May 2020). "Why Meatpacking Plants Have Become Covid-19 Hot Spots". WIRED. Condé Nast.
  30. ^ Bradbury, Shelly (April 13, 2020). "Coronavirus outbreak at Greeley plant forces two-week closure, burdens local health facilities". Denver Post. Retrieved April 15, 2020.
  31. ^ "Fifth local JBS employee dies from coronavirus as union, company trade shots". Longmont Times-Call. 2020-04-27. Retrieved 2020-05-01.
  32. ^ Gliha, Lori Jane (April 16, 2020). "Weld County health department letter: Meat plant workers felt a culture of 'work while sick'". KDVR. Denver, Colorado. Retrieved April 19, 2020.
  33. ^ Staff (April 15, 2020). "Coronavirus Death Toll Among Colorado Meatpacking Workers Rises To 5". CPR News. Retrieved April 16, 2020.
  34. ^ Honig, Esther; Genoways, Ted. ""The workers are being sacrificed": As cases mounted, meatpacker JBS kept people on crowded factory floors". Mother Jones. Retrieved 2020-05-01.
  35. ^ Rieger, Sarah (9 May 2020). "Asymptomatic testing centre set up in Brooks as 7% of city's population tests positive for COVID-19". CBC News. Calgary AB. Retrieved 10 May 2020.
  36. ^ "Scared to show up for work". Castanet. Kelowna BC. The Canadian Press. 22 April 2020. Retrieved 10 May 2020.
  37. ^ Franklin, Michael (21 April 2020). "No one laid off, production reduced to one shift at Brooks, Alta., meat plant". CTV News. Calgary AB. Retrieved 10 May 2020.
  38. ^ Hadi, Mohammed; Davis, William P. (2021-06-01). "White House says hack of meat processor is a ransomware attack, as some plants are shut down". The New York Times. Retrieved 1 June 2021.
  39. ^ "Cyber attack hits JBS meat works in Australia, North America". Reuters. 2021-05-31. Retrieved 2021-06-02.
  40. ^ Harris, Bryan (2021-06-01). "Russian criminal gang probably hacked meat supplier JBS, says White House". Financial Times. Retrieved 2021-06-02.
  41. ^ "Meat giant JBS pays $11m in ransom to resolve cyber-attack". BBC. 2021-06-10. Retrieved 11 June 2021.
  42. ^ "Board, Council and Committees | JBS IR". jbss.infoinvest.com.br. Retrieved 2020-05-01.

External linksEdit