Meat + Poultry - September 2008 - 30

CEO SERIES

M&P: How about the development of
more value-added products and building the Swift and other brands?
WB: A big portion of beef will continue to be a commodity. But we are
working throughout JBS to expand our
premium programs. JBS produces Certiﬁed Angus Beef, and Swift has three
main brand lines, Swift Premium (beef
and pork), 1855 and Swift Angus Select,
among others. We have doubled the
volume and improved the margin on
these lines over the past year. National
Beef has very recognized value-added

Kansas Livestock Association

I also tell them we need to work to
stimulate demand for beef, to reopen
markets and open new markets and add
value through brands and new products.
I tell them, the
U.S. has 300 million people. If we
add one pound of
beef consumption
per person, that's
300 million more
pounds sold. We
tell them about
Batista
sharing efﬁciencies. At the end of the day, that will
beneﬁt the whole industry.
In the past year, we have concentrated a lot of energy on operations
and reducing costs to be more efﬁcient.
This is good for the whole packing industry because we have made Swift
much more competitive and we have
stimulated change for everybody. This
is very important for producers and
consumers because everyone pays for
inefﬁciencies.

"The international market
is very active and
will continue strong
and active, and there
are several emerging
markets for beef."

M&P: How will mandatory countryof-origin labeling affect you and the
industry?
WB: The whole chain, from producer to the retailer, will have to pay the
cost. That's the reality. We don't know
yet how COOL will affect the number
of our SKUs.
M&P: In August last year, you said JBS
would invest in and expend its caseready fresh meats production. How is
this proceeding?
WB: Once we started
d to dis
discuss with National Beef Packing
the possibility of acquiring
ng it, we
stopped the idea of expanding
panding
Swift's case-ready business
ness because National has two
case-ready beef plants -
one in Hummels Wharf,
Pa., and one in Moultrie, Ga. We
would use these plants to grow our
case-ready beef business and to expand into case-ready pork. We could
send pork from our Louisville, Ky. and
Worthington, Minn. plants.
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M&P: What about beef exports from
the U.S.?
WB: We are sending a reasonable volume to Russia and to some Middle East
countries. After being a market mostly
for livers, Russia is taking a lot of muscle
cuts, including top sides, all the round
cuts and knuckles. There is the potential
to sell middle meats there as well.
JBS is already the biggest protein
supplier in Russia. With Inalca (JBS's
Italian beef business), we are building
a big cold-storage facility and hamburger-patty plant to supply McDonald's in
Russia. The plant and cold storage will
be completed by the end of this year.
Then we will supply 100 percent of McDonald's needs. The cold-storage facility
will have a 22-million lb. (10,000 ton)
capacity and will be used to store beef
from JBS plants all around the world.
JBS also has a cold-storage facility in
Egypt. Our sales team here is working
with our sales team in Brazil to supply
meat to the Middle East.

and branded-beef programs. It sells an
important portion of its product under
those programs. We are also working
to increase our sales of marinated and
tenderized pork products.

M&P: What about other markets?
WB: We are also shipping U.S. beef
and pork to FSU (former Soviet Union)
countries. JBS has 16 sales or trading
ofﬁces around the world.

M&P: Given the importance of the
U.S. domestic market, how do you
view the prospects of getting higher beef prices given the state of the
economy and the level of competing meats?
WB: We are not sure that beef prices will increase as much as some think
tthey will. The corn market is starting to break.
k
The international market
T
iis very active and will
ccontinue strong and active, and there are several emerging markets
for beef. For example,
we are shipping Austraw
llian beef to Chile and
promoting it heavily. We are also shipping Australian beef to Russia and the
Middle East. Dubai is becoming quite a
sizeable market for muscle meats.

M&P: How quickly will JBS's U.S. beef
sales to South Korea grow?
WB: JBS already has U.S. product on
the water to Korea. We expect to see
Korean sales come back stronger and
more quickly than many think. That's
because per-capita consumption will
pick up fairly quickly. Also, the negative
perception of U.S. beef portrayed in the
protests did not reach the vast majority
of Koreans. Most people there like U.S.
beef, its quality and its price.

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M&P: How will U.S. beef affect Australia exports to Korea?
WB: U.S. beef will not harm Australian beef in Korea. Australia doesn't have
beef to ship to Korea because it is shipping to the European Union, Russia and
the Middle East. Australia's beef exports
are much more diversiﬁed than they
were a few years go. It used to export
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Meat + Poultry - September 2008

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