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$175m Rivalea acquisition makes JBS Australia’s largest pork processor

Jon Condon, 09/06/2021

JBS Australia is set to become the largest pork processor in Australia, following its acquisition of the nation’s biggest pork producer, Rivalea.

In an announcement to the market this morning, JBS said it would pay A$175 million for Rivalea’s integrated pork processing, piggery, wholesaling and stockfeeds businesses, which kill about 1.4 million pigs each year, producing about 26 percent of Australia’s pork requirements from plants at Corowa and Melbourne plants.

In September last year, Rivalea, Ltd – owned by listed Singaporean food group QAF – announced that it was pursuing the sale of the business.

After expanding its piggery sites in southern NSW and central Victoria, installing effluent-powered clean energy generators and spending $8 million upgrading its Melbourne processing site’s capacity, QAF said Rivalea was now “of sufficient scale to be an ideal platform for a new owner with a strong focus on the animal protein segment to take the business to the next level.”

Riverlea’s farming activities were originally established in 1971 by the US agribusiness group Bunge around Corowa on the NSW-Victorian border.

Bought by Singapore’s QAF in 2001, the business was renamed Rivalea Australia in 2009. The vertically-integrated business employs more than 1000 staff and operates about 7600ha of farmland including a network of 25 piggeries in the Murray Valley and near Bendigo and in the Victorian Wimmera, carrying about 40,000 breeding sows. Contractors own another 18 of the Riverlea supply farms.

The acquisition will make JBS the largest producer of pork in Australia. JBS is already the largest processor of beef and sheepmeat in the country.

The move will allow JBS to increase its product diversification in Australia, increasing the volumes of value-added products using pork meat within the company’s Primo business, as well as opening up new opportunities for domestic and export sales of pork, this morning’s statement said. Marketers say there are significant synergies to be had by combining multiple proteins within the same marketing and distribution network, and offering existing food service and retail customers a wider range of protein choices.

Gilberto Tomazoni

The acquisition will add an extensive product line in various categories, and add important brands to JBS’s portfolio, to create strong conditions to accelerate the growth of the value-added and branded businesses in Australia, in addition to strengthening the company’s export platform,” said JBS global chief executive Gilberto Tomazoni said.

“With total annual sales of circa AU$400 million (US$310 million), an EBITDA of AU$37 million, Rivalea already has sustainability as the focus of its business strategy,” he said.

“The company sells well-known Australian consumer brands such as Riverview Farms, Family Chef and St Bernard’s that will strengthen our presence with consumers and customers,” JBS Australia chief executive Brent Eastwood said.

The acquisition is subject to relevant regulatory approvals including the Australian Competition and Consumer Commission and the Foreign Investment Review Board. Given that both buyer and seller are foreign entities, there’s likely to be little opposition, observers says.

JBS already a significant player in Australian pork market

While most attention on JBS’s operations in Australia focuses on its beef and sheepmeat processing operations and Primo smallgoods division, the company already has a substantial pork processing business located at Port Wakefield, South Australia.

The Australian pork division has operated for 22 years, supplying domestic customers, mostly under the Seven Point Australian Pork label.

The division is now focused on processing for major supermarket retailers and processors under long-term partnerships, JBS says.

The Port Wakefield business employs around 300 staff, spends around $17 million annually in livestock purchasing, and produces around 43,400t of pork annually. Recent plant upgrades are delivering ‘exceptional shelf life and consistent food safety outcomes’, the company says.

Other recent investments at the Port Wakefield site have enabled the team to start producing value-added pork products including marinated and dry-rubbed items.

Overseas, JBS operates its US pork division, one of the largest pork producers in North America, alongside its JBS US beef business, and Pilgrim’s Pride chicken processing business.

The Rivalea purchase will also provide a ready channel to direct pork into JBS Australia’s enormous Primo smallgoods division, which produces about 130,000 tonnes of (mostly pork based) sausages, smallgoods, cured meat and bacon  at two sites in NSW and Queensland.

 

About Rivalea

Rivalea is a leading integrated Australian agri-food company based in the Riverina region of NSW. The company has extensive agricultural, processing and marketing interests that support high quality pork production for Australian and export markets.

Rivalea employs more than 1200 people, operating across a number of farming, processing and distribution sites:

  • Agricultural properties in Southern NSW and Victoria that primarily focus on the breeding and production of pigs
  • Specialised export accredited pork abattoirs, boning and packaging facilities at Corowa and Diamond Valley Pork (DVP), Melbourne. DVP provides contract processing services for external livestock for other pork producers, wholesalers and retailers.
  • Marketing resources that support key brands and customers are located in Albury, Melbourne, Sydney, Brisbane, Adelaide, Singapore and Tokyo.

The company distributes its pork throughout Australia, Asia and other parts of the world. Delivery to retail and wholesale businesses utlises an extensive network of both wholly-owned subsidiaries and contractors. The company wholesaling operations market company-owned branded pork, carcases, commodity pork and pork offals. The wholesale operations also sell a range of beef and lamb products.

 

 

 

 

 

 

 

 

 

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