JBS Australia enters supply partnership with Rural Funds Group
As part of the deal, JBS has entered into a finance lease transaction of its five feedlots to provide the infrastructure and security for Rural Fund’s cattle.
The transaction is worth a total of $52.7m and is subject to approval from the Foreign Investment Review Board.
The five feedlots, located in southern Queensland and New South Wales, have a combined capacity of 150,000 head and support the company’s grain-fed cattle operations.
Under the terms of the lease agreement, JBS Australia will operate and manage the feedlots for up to 10 years, with an option to terminate the agreement at any time after five years.
JBS Australia CEO Brent Eastwood said these arrangements were commonplace in the Australian agricultural sector and the agreement had no impact on grain-fed producer suppliers to JBS Australia.
“The agreement will allow JBS Australia to continue ‘business as usual’ with our customers and grain-fed cattle supplier partners, while establishing a long-term relationship with one of the country’s most respected Australian-owned funds to pursue future opportunities,” said Eastwood.
“The JBS Australia team remains focused on working alongside our leading producer partners to ensure Australian red meat and value-added food products maintain their status as the preferred choice of discerning customers in Australia and around the world.”
Rural Funds Group, which is managed by an investment trust called Rural Funds Management, owns a diversified portfolio of high-quality Australian agricultural assets.
David Bryant, managing director of Rural Funds Management, said: “The strategic partnership provides Australia’s largest meat processor a consistent supply of grain-fed cattle. In turn, the Rural Funds Group has introduced to its portfolio a substantial and highly capable new counterpart that will contribute to growth of fund assets and income.”
JBS Australia processes more than one million head of cattle annually and exports products to more than 50 countries around the world.
