JBS and WH Group signed a memorandum of understanding (MOU) for the supply and distribution of fresh beef, poultry and pork to the Chinese market, JBS stated in a notice to the market on January 27.

Through the MOU, JBS and WH Group will jointly offer a portfolio of Friboi and Seara branded products in a deal that could reach BRL3 billion (US$710 million) in business per year.

"This agreement reflects the maturity and evolution of our trade relations with China," explained Renato Costa, president of Friboi. "We have seen changes in the Chinese consumer profile regarding protein consumption and a growing concern for food quality, product traceability and enhanced food safety. To meet this demand, we have developed on the ground teams, and dedicated partnerships and projects in China."

In addition to expanding JBS' products and brand presence in the Chinese market with the focus on beef, the major objective of the agreement is to have direct access to the consumer through more than 60,000 exclusive WH Group points of sale in the country.

"It will be an opportunity for us to evolve in our supply chain in an unprecedented business model for JBS," added Costa.

The first shipments of products under this agreement will start in the first quarter of this year, according to the JBS notice.

JBS, according to the WATTAgNet Top Poultry Companies Database, is the world’s largest poultry producer and is a major producer of beef and pork products. The company is headquartered in Brazil.

Advertisement

WH Group, headquartered in China, is the parent company of Smithfield Foods and is the world’s largest pork producer. As a poultry producer, WH Group ranks 49th globally, 14th in Asia and ninth in China, according to the Poultry International Top Companies rankings.

WH Group, formerly known as Shuanghui International Holdings Limited closed on the acquisition of Smithfield Foods in 2013.