AUS: JBS to close loss-making King Island facility

By Michelle Russell | 11 September 2012

JBS said it was faced with high operating costs in terms of utilities and domestic and export freight costs

JBS said it was faced with high operating costs in terms of utilities and domestic and export freight costs

Brazil-based meat processor JBS is to close its loss-making King Island processing facility in Australia, placing around 70 jobs at risk.

Andre Nogueira, CEO of JBS Australia, told stakeholders in a letter yesterday (10 September) the business had not been profitable since being acquired despite the company committing capital and resources to it. JBS attained the site in Tasmania when it acquired Australian processor Tasman Group in 2008.

The company said it was faced with high operating costs in terms of utilities and domestic and export freight costs, in addition to "variability in livestock supply and leakage of numbers of cattle from the island during the year".

The facility, located in Tasmania, will close with immediate effect.

"We have made every effort along with the support of the Tasmanian Government to try and make this business operate," Nogueira said. "We acknowledge that this decision will have an effect on the King Island community and our workforce. We will be actively working with government and the union to support and assist affected workers in transitioning based on their skills to available vacancies at Longford as a first step and to other JBS processing sites if suitable."

JBS said it will continue to operate its meat processing facility in Devonport and look at opportunities to expand its Longford beef and lamb operations.

"The decision to close is not about walking away from the King Island producer," a JBS spokesperson said. "JBS will continue to be a major buyer of cattle on King Island. We appreciate the strong support we have received from a large number of King Island producers and the excellent relationship we have with the King Island Producer Group chaired by James Hill."

Sectors: Meat & poultry

Companies: JBS

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