Strategy and Competitive Advantages

Strategy 

Strategy Pillars

To reach its objectives, the Company relies on the strategic pillars described below:

JBS Culture

JBS’s team members are the mainstay of the Company’s culture. It is their actions and decisions that bring into being the Company’s values and the beliefs that guide its actions. Safeguarding our Culture is a key business issue for JBS. 

Considering that, JBS has been investing in internal campaigns to promote, share and grow its corporate culture among its 235 thousand team members – many of them from other companies acquired by JBS. The campaigns are focused on praising and motivating the values that come up daily in JBS' operations.

Responsible Procurement

Wherever JBS operates, its business units adhere to rigorous raw material supplier selection standards. Procurement procedures must adhere to best social and environmental practices and comply with tax, fiscal, employment and environmental legislation.

JBS Beef (Brazil) does not purchase animals from farms that are involved in the deforestation of native forests, encroach on indigenous lands or environmental conservation projects, or have been embargoed by the Brazilian Institute for the Environment and Natural Resources (IBAMA). The company also vetoes suppliers who employ forced or child labor. These principles are set out in the company’s Responsible Raw Material Procurement Policy.

Seara carries out technical and health visits before and during any procurement activity and when certifying new suppliers, who must also hold environmental licenses. The company also carries out the necessary onsite checks to guarantee its suppliers fulfill their contractual obligations.

At Moy Park, the supplier approval process includes a self assessment questionnaire (SAQ), where suppliers must disclose information in line with the company’s sourcing criteria. Furthermore, all poultry suppliers must be certified by the British Retail Consortium (BRC) or an equivalent organization, such as IFS or FSSC 22000.

At JBS and Pilgrim’s, all suppliers must supply a statement from the British Retail Consortium (BRC) guaranteeing they undergo annual safety and quality audits. Supplies are also monitored by ISNetworld, which evaluates criteria related to product quality and occupational safety.

JBS USA has developed a Supplier Code of Conduct covering issues such as human rights, forced labor, freedom of association and collective bargaining, as well as health and safety, animal welfare, environmental and business integrity issues and other factors.

Cost Reduction and Process Eco-Efficiency

Reducing production costs by improving processes along its production chain is an obsession for JBS, which has a commitment to the ongoing improvement of its processes that transcends the limits of its operations and reaches all the way to its suppliers.

Among its activities, the Company has an investment plan to support technical and environmental improvements that includes prioritizing the use of technologies that make better use of raw materials and mitigate environmental impacts, while optimizing the use of natural resources.

Along the supply chain, the Company supports projects such as the Novo Campo (New Field) Program, which promotes sustainable practices to increase the productivity of farms in the Amazon region in order to develop a new operating model that preserves natural resources and that brings financial benefits to the ranchers in the region

Quality Control

JBS is committed to offering its customers and consumers products that comply with the highest standards of food quality and safety. The company has a relentless focus on product quality, food safety and the integrity of its brands. JBS adopts strict standards in all of its food safety processes and quality control systems to ensure the safety and quality of its products. JBS is a mature, ethical company that operates professionally and as a global food company, provides complies with international food quality and safety standards and sells high-quality products to every consumer market in the world.

The sophisticated approach of the company to food safety, quality and product integrity includes:

Value chain management: adopts sustainability principles for raw material sourcing, responsible protein purchases and supplier training.

Food quality and safety: the company conducts laboratory research and takes care to ensure that all of its operations comply with the most recent certification and regulatory requirements.

Labeling: All JBS products comply with a wide range of labeling requirements in accordance with local regulations. In Brazil, the company’s product labeling also carries the Federal Inspection Service (FIS) seal from the Ministry of Agriculture, Livestock and Supply (MAPA). In the US, all products carry the United States Department of Agriculture (USDA), Food Safety and Inspection Service (FSIS) mark of inspection.

Certification: Third-party recognition of best practices, processes and routines adopted at JBS. These certifications not only guarantee the quality and effectiveness of company processes, but also allow JBS access to international markets.

QUALITY IS THE NUMBER ONE PRIORITY FOR JBS AND ITS BRANDS

JBS does not tolerate any quality issues in its production processes. The company is highly committed to food safety and product quality and it is constantly improving its health practices.

  • JBS facilities export to more than 150 countries in South America, North America, Europe, Asia and the Middle East. We are audited annually by international health authorities and by our customers.
  • JBS Brazil has more food safety and quality certifications from the British Retail Consortium (BRC) than any other Brazilian company. BRC is the global benchmark for protein production quality. Many of the company’s global facilities are also certified for ISO 9001 quality management standards.
  • Over the past two years, JBS global facilities have undergone more than 800 quality audits and the company has proactively engaged suppliers to ensure a commitment to food safety throughout the value chain.
  • In Brazil, there are more than 2,000 JBS team members focused exclusively on product quality assurance. 70,000 thousand team members undergo annual quality assurance training every year.
  • The rigorous JBS quality control system improves the company’s credibility in the eyes of consumers and creates additional export opportunities.

Transparency & Communication with Stakeholders

JBS adheres to the best practices in corporate governance – including transparency and equity in the disclosure of information – which qualifies the Company to the Novo Mercado segment of the B3.

These practices include the public disclosure of its global Greenhouse Gas (GHG) emissions through the Driving Sustainable Economies (CDP) international platform and the Brazilian GHG Protocol Program, as well as the Company’s participation in the B3’s Carbon Efficient Index (ICO2) since 2009.

Through the Driving Sustainable Economies (CDP), and through Climate Change information, JBS also discloses its strategies and actions related to water issues and deforestation. To provide transparency and ensure compliance with its commitment to the sustainable origin of its raw materials and the management of its supply chain, each year JBS publishes on its website an audit report of its Monitoring System for Ranches Supplying Raw Materials (cattle), which is conducted by an independent auditing firm.

JBS annually publishes its Annual and Sustainability Report, that is composed by social, financial and environmental information that adheres to the GRI Guidelines. This publication demonstrates and reinforces JBS commitment to the best practices in governance and sustainable operations.

 

Competitive Advantages 

Market Leadership and Scale

JBS is the largest animal protein company and the second largest food company in the world. Due to its size, it access the major world markets, with economies of scale, production optimization, reduction of fixed costs and a privileged position to negotiate purchase and sale prices with its suppliers and customers.

Geographic Distribution

JBS has processing platforms located in the main animal protein producing countries, which provides the Company with geographic diversification, operational flexibility and mitigation of the risks associated with possible sanitary restrictions or trade barriers. To serve its broad range of clients, JBS has an extensive national and international sales and distribution network, as well as Distribution Centers and Sales Offices in the major consumer regions throughout the world.

The Company’s exports cover a diverse geographic range and reach more than 150 countries, which allow JBS to reduce its exposure to individual markets, while having access to all consumer markets.

Successful Acquisition Track Record

Throughout its history, JBS has made significant acquisitions, such as Smithfield Beef, Five Rivers Cattle Feeding, Tasman Group, Pilgrim’s Pride, Bertin, Seara, Primo Smallgoods Group, Tyson's poultry operations in Brazil and Mexico, Moy Park, Cargill's pork operations in the US, GNP, and Plumrose. These acquisitions have allowed for the substantial growth of its results as the company successfully integrated the acquired companies and captured synergies, resulting in rapid gains in efficiency while validating the capacity of JBS management in executing company turnarounds.

Experienced and Industry-Specialized Management

JBS has a team of experienced managers with expertise in the market, focused on growing sales, optimizing resources and increasing operational efficiency. JBS is highly professionalized and each business unit has its own management. of the strategy for selecting competent executives takes into consideration experience in the sector and alignment with the company’s values, such as an ownership attitude and a focus on results.

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