JBS S.A. Announces $12 Million Expansion Plan Chinese Demands Continue to Surge

Meat
FILE PHOTO: A man handles meat as he works at a butcher shop in Buenos Aires, Argentina August 31, 2018. Picture taken August 31, 2018.
(Photo: REUTERS/Marcos Brindicci/File Photo)

Widely considered as the world's largest meat processing company in terms of sales volume, Brazilian company JBS S.A. recently announced that it is expanding its production capacity. The company is investing $12 million in order to boost production at two of its domestic facility. The expansion was the company's response to the growing demand for beef exports, especially in China.

JBS S.A. said in a statement that the company is investing 45 million reais or $12 million to its two facilities located in Brazil. These two facilities are located in the state of Gerais and Minas. The company said that the expansion plan will double its production company. Based on data from the company, these two facilities are the main producer of beef that is exported to the Chinese market.

According to JBS chief of Brazil's beef division Renato Costa, the company's beef export volume to China surged by as much as 125 percent when compared to the same period last year.

JBS has been quite busy with investments and expansion plans this year. In May, the company announced that it is planning to spend close to $3.7 million as part of its effort to expand its hamburger production at its two plants located in the state of Sao Paulo. Just like its latest investment, this one was undertaken in order to meet the growing demand of the food service sector.

While China's demand for beef continues to surge, the company is instituting strict guidelines with regards to the import of chicken products. China said in June that the country will impose temporary anti-dumping duties on all incoming shipments of chicken products from Brazil, this order also covers imports from JBS.

China's new policy towards chicken products was imposed following a ten-month investigation which concluded that chicken imports from Brazil have huge negative repercussions to the country's local poultry sector. The decision was based on the preliminary ruling issued by the country's Ministry of Commerce. Moreover, reports claim that charges will be levied to all those who are suspected of the violations at the time. As of this writing, it is unclear whether these agreed-upon restrictions will remain in place.

Recently, there were reports of bird flu contamination on a poultry farm in the southwestern province of Guizhou. In order to mitigate the spread of the virus, local authorities were forced to cull more than 32,000 birds at the farm.

© 2018 Business Times All rights reserved. Do not reproduce without permission.