12 Jan 2014

Farmers wonder if NZ next for JBS

6:42 am on 12 January 2014

Federated Farmers says JBS, the world's largest meat company, could buy meat companies in New Zealand after successfully expanding in Australia and the United States.

JBS became a global processor of beef, pork, poultry and lamb through acquisitions and has a strategy of diversifying, according to the Meat Industry Options Paper released by Federated Farmers on Friday.

"Wouldn't a big New Zealand sheep meat processor be a tidy acquisition for a company with deep pockets and a strategy to reaffirm its global presence in the main meat producing countries?"

JBS is only the third-largest lamb processor globally, but is the leader in most other meat categories.

"Surely New Zealand lamb, widely regarded as a world leader, would be pretty high on the shopping list and a welcome addition to their global meat portfolio?"

AAP reports the company entered the Australian meat industry in 2008 with the acquisition of Australian Meat Holdings.

Within five years it became the largest meat packer in Australia with 11 meat processing plants and six feedlots.

JBS could bring economies of scale and efficiencies as well as institutional knowledge to the New Zealand meat industry. It also has established relationships with large customers.

"If a foreign company was to come in and establish an ownership stake in the New Zealand meat industry, it may cause some heated debate, but it would also not be a first for the New Zealand meat industry," the paper said.

Until the 1970s the meat industry in New Zealand was predominantly owned by British companies. ANZCO, one of the current big four players, has 73% Japanese ownership

AAP reports any overseas buyer would have to meet the requirements of the Overseas Investment Act.