Sao Paulo-based JBS SA, the world's biggest meat producer, has signed a memorandum of understanding with Chinese e-commerce giant Alibaba, to sell animal protein (boni, poultry and swine) in China.
The 3-year agreement is worth up to $1.5 billion according to a securities filing on Tuesday. The document was signed by Renato Costa, president of JBS Carnes Brasil, and Richard Wang, executive of Win Chain, a subsidiary of Alibaba that is dedicated to the fresh food industry and that coordinates the company's supply chain, the Brazilian company said in a statement.
The deal, signed in Shanghai, will allow JBS to expand both in the business-to-business and business-to-consumer segments in China, particularly in livestock. The country is one of the main destinations of the products of the Brazilian giant. The company also said that “the first shipments should take place in 30 days”.
JBS S.A. was founded in 1953 in Anapolis, Brazil. It is the largest (by sales) meat processing company in the world, producing factory processed beef, chicken and pork, and also selling by-products from the processing of these meats. The company has 150 industrial plants around the world- including in the world's four leading beef producing nations (Brazil, Argentina, United States, and Australia)- serving 110 countries through exports. JBS's popular brands include: Seara, Pilgrim's, Friboi, Country Pride, Del Dia, Castle Lea, Gold'n Pump, and Swift.
J&F Investimentos, wholly owned by billionaire brothers Joesley and Wesley Batista, is a 42% indirect shareholder in JBS S.A. JBS became a publicly held company in 2007 and is listed on the Sao Paulo stock exchange.
In 2017, net revenue was R$163.2 billion, equivalent to US$51.5 billion. Gross profit totaled R$23.8 billion, an increase of 11.5%, with gross margin increasing from 12.5% to 14.6%. FY EBITDA was R$13.4 billion, 18.9% higher than 2016, with EBITDA margin increasing from 6.6% to 8.2%. Adjusted net income was R$2.1 billion, while reported net income was R$534.2 million. Operating cash flow was R$5.2 billion and free cash flow was R$2.8 billion.