São Paulo – Brazil’s meatpacker JBS continues to supply the Middle East market as usual, according to its Global CEO, Gilberto Tomazoni, during an online earnings presentation held on Thursday morning (26). “The flow of products remains the same; it is reaching the market,” Tomazoni said.
The Middle East as a whole has been feeling the effects of the war involving the United States and Israel against Iran, with trade impacted mainly by the closure of the Strait of Hormuz, through which several countries in the region—such as Iraq, Kuwait, Bahrain, and Qatar—have their only maritime access to the world. The United Arab Emirates has a small area before the strait, while Saudi Arabia and Oman have alternative routes.
According to the CEO, there are additional costs for shipments, one of them being the extra charges from shipping agencies to navigate the region. “The second additional cost is the one we incur when we change the destination port. The product’s destination is sometimes altered,” he said about the current scenario.
In addition to shifting unloading from one port to another, Tomazoni also reported changes in road transport to complete deliveries. “It often ends up farther from the customer, meaning transport costs are also higher,” he said. But according to the executive, these costs have been absorbed by the market, with no impact on the company’s results.
The CEO also cited countries in the region when commenting on strong demand for beef and chicken. “That’s why we are also investing in the Middle East. We opened a new plant in Jeddah [Saudi Arabia]. We also announced an investment in Oman. Again, because demand is strong,” he said. In the earnings presentation, in addition to the new unit in Jeddah, the company cited as an investment in Saudi Arabia the expansion of its plant in Dammam. The unit in Oman, a joint venture, is a multimeat platform to supply beef, poultry, and lamb to the global market.
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Translated by Guilherme Miranda
