Meatpacker JBS is shutting two of its factories in the US, impacting around 2,000 jobs.
The closures of a beef production facility in Souderton, Pennsylvania and a value-added processing plant in Memphis, Tennessee were announced on Friday (12 June).
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Production will be absorbed into other undisclosed JBS plants.
JBS USA, the US unit of the Brazil-headquartered meat giant, described the move as part of a “broader strategy focused on growth, modernisation, and long-term competitiveness”.
The Souderton and Memphis sites employ 1,784 and 208 people, respectively, the company told Just Food.
Affected workers will get opportunities to apply for open roles at other JBS sites, the Brazil-based business said, though it did not disclose the exact number of openings elsewhere.
The closures come as the world’s largest meat processor faces widening losses in its US beef unit amid tightening cattle supplies.
Losses in adjusted EBITDA for US beef deepened to $267m in the first quarter from a loss of $100m a year earlier, while the margin was a negative 3.7% versus minus 1.6%.
Group CEO Gilberto Tomazoni told analysts in May the first-quarter “environment remained very difficult” for US beef as losses in adjusted operating income increased to $329m from $158m.
Sales from its JBS Beef North America business unit rose 11.6% in the first quarter to $7.17bn, largely driven by price increases linked to supply and demand dynamics.
In February, JBS closed a case-ready production plant in Riverside, California, affecting more than 300 roles.
“By investing where we are growing and making difficult adjustments where needed, we are building a stronger and more resilient company,” Wesley Batista Filho, CEO of JBS USA said.
Filho said the company remains “confident” in its long-term outlook.
Meanwhile, Pilgrim’s Pride – majority owned by JBS – is investing $75m to expand and “modernise” its poultry plant in Ellijay, Georgia.
The investment will increase harvesting and portioning capacity and enable a “broader” mix of boneless chicken products, it said.
The project is due for completion in the third quarter and will support the Pilgrim’s business in the US foodservice channel, the company told Just Food.
As part of the investment, Pilgrim’s will close the “aging” harvesting portion of its plant in Chattanooga, Tennessee while continuing to use its deboning infrastructure.
The Ellijay site employs more than 1,000 staff, of which 346 are impacted by the closure and 764 will remain at the existing Chattanooga facilities, JBS said.
In the first quarter to 29 March, Pilgrim’s delivered sales of $4.53bn, up 1.6% on a year earlier.
However, the listed company’s operating income dropped 59.8% to $162.6m. Net income attributable to Pilgrim’s stood at $101.4m, less than half the $296m booked in the first quarter of the previous financial year.
