The Foreign Investment Review Board has approved meat processor, JBS Australia’s venture into salmon production, via its proposed purchase of Huon Aquaculture.
JBS Australia welcomed FIRB’s decision that the Commonwealth had no objection to the proposed acquisition.
WA mining magnate Twiggy Forrest, who was also looking to buy the Huon business, earlier raised questions about JBS’s animal welfare and environmental credentials over the deal.
In a statement issued this afternoon, JBS said it had a strong track record of investing in and growing Australian businesses, local jobs and exports.
“We employ more than 11,000 Australians, many of whom live and work in regional and rural towns and communities. We have grown all of the businesses we have acquired in Australia and JBS is committed to doing the same with Huon,” the company said.
The Huon acquisition will be JBS’s first venture into aquaculture, worldwide
“JBS is committed to Huon, its employees, the local Tasmanian community and the broader principles of environmental sustainability, animal welfare, safety and social responsibility,” JBS Australia chief executive Brent Eastwood said.
“(Huon founders) Peter and Frances Bender along with their team have built an amazing business and our aim is to build off this strong foundation,” Mr Eastwood said.
“JBS has the commercial relationships and the ability to open up and access new markets which, combined with the Huon team’s knowledge and expertise, create a fantastic opportunity to take this business forward,” he said.
JBS said it believed its $3.85 per share offer was “an attractive opportunity” for Huon shareholders, representing a material premium to recent historical trading prices of Huon shares.
Huon shareholders will vote at a Scheme Meeting on 29 October, after which JBS said it would actively engage with key government, business and community stakeholders and the Huon team and its customers.
Speaking during a recent investor briefing, JBS global chief executive Gilberto Tomazoni told analysts the company’s ambition was to become a globally-significant player in the salmon aquaculture industry, just as it now was in beef, pork and chicken.
JBS’s investment in salmon production in Australia would provide a platform for new growth beyond the company’s existing red and white meat businesses, analysts were told.
As Beef Central reported in August, subject to shareholder approval, JBS plans to buy Australia’s second largest aquaculture business, Huon Aquaculture in Tasmania, for $546 million.
Morgan Stanley analyst Ricardo Alves, asked two fundamental questions of the world’s biggest animal protein producer: Why aquaculture, and why Australia?
Mr Tomazoni said JBS’s strategy in entering a new protein category was driven by an ambition to develop a new platform for growth within the overall business.
“We want to build a strong position in each category, as we have in beef, chicken and pork,” he said.
“We started (moving from beef, the company’s original focus) into chicken in 2009, and we are now number one. We also started pork, and we are now the number two producer – and we will do the same in aquaculture,” he said.
Mr Tomazoni said JBS’s interest in seafood was not in wild-caught fishery, but specifically in aquaculture.
“We do not see opportunity to catch fish growing, but aquaculture will grow, and this is an opportunity because the category (demand) keeps growing.”
“From the consumer’s perspective, it’s high nutrition and has health benefits. Production efficiency in aquaculture is advancing in terms of costs, and feed costs. And aquaculture is more sustainable (than wild-caught fishery).”
“And why Australia? Because Australia was the opportunity. We looked for opportunities in this category in all other areas, but Australia was chosen. JBS has a global presence – we can embrace opportunities globally. And this opportunity in Australia was a really great one, because the country has high standards, great technology and an animal welfare environment.
“We have a team there, we have management, we know the consumer, we know the costumers, we know the market – it is perfect fit to our strategy to grow in another category in a place that we already have a strong presence,” Mr Tomazoni said.
JBS already has extensive red meat cold storage, distribution, sales and marketing channels in place across global food markets, which could easily accommodate salmon products if required, analysts said earlier.