After announcing strong third quarter results that were bolstered by strong beef business in Brazil and a recovering Pilgrim’s Pride in the United States, JBS SA announced that it will open six new beef plants in Brazil in 2013. The new plants will add processing capacity of 1.2 million head of cattle by July 2013 and will increase beef production capacity in Brazil by 15 percent, reports Reuters.
As the plants get into full swing at the end of 2013, they will be able to process up to 2 million head a year, Jerry O'Callaghan, head of investor relations, said on a conference call to discuss the company's third-quarter earnings. Separately, JBS posted a quarterly profit of 367 million reais ($178 million) late Tuesday.
Wesley Batista, the JBS chief executive, said the company was quickly reducing its leverage, or debt to earnings, with the improving reproductive cycle of the Brazilian cattle herd and a weaker Brazilian real against the dollar.
"The cost of raising an animal in the United States is twice the cost of raising an animal in Brazil. So, they are reducing the size of their herd," Batista said, adding that the outlook for Brazilian beef production was extremely positive.