News

JBS scales back Dinmore operations to ‘protect long-term future’

Jon Condon, September 9, 2020

In a clear sign of the depth of difficulty currently being experienced in red meat processing this year, JBS Australia has announced it will put off about 600 full-time staff at the company’s flagship Dinmore beef plant west of Brisbane.

JBS says operations will be scaled-back at Dinmore for ‘the foreseeable future’, due to a range of issues impacting livestock supply and market conditions in the COVID-19 environment.

Australia’s largest meat processing facility, Dinmore, like other plants across the country, has struggled to maintain efficient rates of kill this year, since widespread rain arrived in March.

In recent times the plant has been operating two shifts daily, for three days each week, for a total of six weekly shifts. Dinmore closed for a fortnight in late August, only re-opening for business on Monday this week.

Effectively, recent three-day-week operations has meant that staff were receiving no more than 60 percent of their normal weekly wage. Clearly the risk in this was that staff would eventually drift away to other, more reliable full-time employment.

In a move designed to try to preserve a further 1150 full-time jobs at Dinmore, the plant’s second daily shift has now been discontinued, with the intention being to run the plant on a single daily shift, five days each week. It means that effectively, those remaining staff will now receive a full weekly income again.

“This is not a decision we have arrived at lightly,” JBS Australia chief executive officer Brent Eastwood told Beef Central when announcing the move this afternoon.

Already facing a severe livestock supply shortage following an extended period of drought, the COVID-19 crisis had significantly impacted the Dinmore business, he said.

The situation had been further exacerbated by the market inequity created by the Federal Government’s JobKeeper Program, Mr Eastwood said. Beef Central wrote about distortions created by Jobkeeper in meat processing in this earlier item.

“The market conditions mean there will be no work for around 600 full time jobs for the foreseeable future,” Mr Eastwood said. “However, the difficult but necessary action we’ve taken allows us to preserve a further 1150 full time jobs during this challenging period, while protecting the long-term future of our Dinmore facility and our other Queensland beef processing operations.”

He said JBS management was acutely aware that the decision would impact many families in the greater Ipswich and southern and western-Brisbane region.

“We’re in the process of engaging directly with our workers, alongside the relevant Unions with coverage on-site, regarding the impact of the decision and we thank them for their constructive approach to those discussions which are continuing.”

Where possible, JBS would be seeking to offer work to the Dinmore team-members impacted by the stand-down decision in other areas of the business, subject to position availability and skillset, Mr Eastwood said. JBS operates the large Primo smallgoods facility at nearby Wacol, a large value adding facility, a dedicated grainfed meat processing plant at Beef City near Toowoomba, and beef plants further north at Rockhampton and Townsville, as well as in southern states.

“In fact we need staff right now in Victoria, NSW and South Australia,” Mr Eastwood said.

Because of its sheer size, with an operating capacity in normal times of up to 3400 head per day, Dinmore is particularly exposed during times of constricted livestock supply, like 2020.

A stand-down of the size announced by JBS today is a drastic move, by any standards, because in the event of cattle supply again improving, it would take months to re-assemble a second shift killing force. The adjustment also impacts plant productivity and efficiency, because fixed operating costs must now be spread over a single daily shift, instead of two.

Given the current slaughter stock outlook, it is difficult to foresee JBS restoring a second shift at Dinmore until at least well into 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HAVE YOUR SAY

Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

  1. Val Dyer, September 9, 2020

    Can someone explain why weekly processed numbers are increasing (as reported by Beef Central) whilst large processors are reducing numbers processed and laying off staff?

    Hi Val, thanks for your comment. It’s worth remembering that while last week’s eastern states adult beef kill reported a 4pc rise, that was coming off an exceedingly low base the week before. Some of the weekly kills during August and early September have been among the smallest ‘mid-season’ kills seen in ten years. Added to that, several plants in Victoria and Queensland returned to work last week, after temporary closures due to COVID measures or simple lack of supply. Editor

  2. Robert Stork, September 9, 2020

    I have a mate who works there. They forsaw this a couple of years ago. I feel for the workers who have lost their jobs

Get Beef Central's news headlines emailed to you -
FREE!