JBS S.A.: A Latin American Success Story
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Case Code: BSTR497 Case Length: 20 Pages Period: 2006-2016 Pub Date: 2016 Teaching Note: Available |
Price: Rs.600 Organization: JBS, SA Industry: Animal Protein Countries: Brazil; Global Themes: Growth Strategy, Competitive Advantage, International Management |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
The origins of JBS date back to 1953 when its founder, José Batista Sobrinho (Sobrinho), opened a small butcher shop, Casa de Carnes Mineira, in Anápolis in the State of Goiás in West Central Brazil. The shop had the capacity to process only five head of livestock a day. In 1956, when Brazil’s new capital, Brasilia, which was only 162 kilometers from Anápolis, was built, it promoted strong economic growth within the region. Tax exemption was given to companies willing to invest in Brasilia. Sobrinho took this as an opportunity and settled in Brasilia, supplying meat to local butchers and restaurants. He named his business Friboi Group (Friboi). Brazil’s strong economic growth in the 1960s increased the country's beef consumption. As a result, Sobrinho’s business prospered. In 1968, Friboi made its first acquisition – an abattoir in Planaltina, a satellite town of Brasilia. The acquisition boosted the number of cattle slaughtered to 100 a day. Two years later in 1970, Sobrinho purchased another abattoir in Luziânia in the state of Goiás, further increasing his company’s slaughtering capacity to 500 head of cattle per day. This was followed by a series of purchases of abattoirs in Anápolis.
Meanwhile, Sobrinho's sons – José Batista, Wesley Batista, and Joesley Batista, dropped out of high school and joined the family business. Along with their father they managed the slaughter houses owned by the family, understood the functioning of the beef industry, and learnt the values of working hard. After establishing their business in Anápolis, the brothers wanted to expand regionally. Between 1970 and 2001, the company embarked on a massive expansion spree, aggressively acquiring several meat plants in Brazil and expanding beef production operations. In 2000, the Batista brothers took over the management of the company from their father while he played an advisory role. Between 1993 and 2005, Friboi acquired twelve abattoirs and beef processing plants, and became one of the largest beef producers in Brazil with a slaughtering capacity of 5,800 head of cattle a day...
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