JBS SA (JBSS3), the world’s largest beef producer, is cutting Argentine exports to focus on domestic sales after government restrictions prompted a plant closure.
JBS, based in Sao Paulo, plans to reduce exports to about a third of total sales in Argentina this year, from about half two years ago, local Chief Executive Officer Artemio Listoni said in an interview in Buenos Aires today. Two-thirds of sales will be destined for the local market, he said.
JBS is closing its Venado Tuerto plant in central Argentina, and firing more than 500 workers, after price and export limits made the facility unprofitable, Listoni said. In addition to a 15 percent beef export tax, government quotas require companies to sell 1 kilogram of meat (2.2 pounds) in Argentina at about 40 percent of the market price for every 2.5 kilograms exported, he said.
Business at Venado Tuerto, which primarily exported meat products, “became inviable,” Listoni said, declining to specify plant losses. “We decided to close it because it wasn’t making money.”
JBS is operating plants in the Argentine cities of Rosario, Pilar and Pontevedra and doesn’t plan further closures, he said. The company is expanding its Rosario facility, he said.
JBS fell 0.7 percent to 5.83 reais at 12:28 p.m. in Sao Paulo trading. The stock plunged 16 percent in the last 12 months through yesterday, in line with the decline in Brazil’s benchmark Bovespa index.
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