São Paulo – Emerging nations should be the main meat buyers in coming years. This is the expectation of the main group of animal protein in the world, the Brazilian JBS, which presented its results for 2010 on Thursday (24), in São Paulo.
According to company president Wesley Batista, the Arab nations will play a leading role in global consumption of meats. "The Arab nations will be important players for Brazilian meats, as their buying power is growing and due to the appreciation of oil," he said.
This may be proved by the increase in consumption registered by the company over the last ten years. According to JBS, the consumption of beef in the Middle East has grown 41.4% over the last ten years. In Africa, the expansion was 70.2% and in Latin America, 32.2%. In the countries of the European Union, in turn, the growth was approximately 3% in the period, as the market is already consolidated.
Not even the revolutions in the Arab world threaten trade, in Wesley’s evaluation. "We do not export to Libya. Saudi Arabia, the main buyer, is under control. In Egypt, the situation is also apparently under control."
Wesley stated, however, that the company does not forecast expansion of operations in Africa or the Middle East this year. JBS already operates in Egypt, in Algeria and has a representative in Dubai. The company plans to increase its participation through the installations it already has, expanding exports and sales.
The Arab world is not alone in this strategy. After buying companies in recent years, JBS now plans to grow and increase profitability. The company forecasts revenues of US$ 40 billion in 2011. "We are focussing on collecting the fruit. We eye companies that have brands, added products and that may increase their margins," he said, regarding acquisition processes.
In 2010, JBS had revenues of 55 billion Brazilian reals (US$ 33 billion), 57.7% greater than revenues in 2009, when they totalled 34.9 billion reals (US$ 21 billion). Profit, however, was 196.1 million reals (US$ 117.8 million), against 220 million reals (US$ 132 million) in 2009, because the company had restructuring expenses after the incorporation of Bertin and payment of premium on short-term debentures that were exchanged for papers with longer term maturity.
One third of the company debt is for the short term and the rest for the long term. Wesley said that 67% of the debt is in the hands of banks, 28% in capital markets and 5% in the hands of the Brazilian Development Bank (BNDES). The group’s market value is US$ 10 billion.
*Translated by Mark Ament
