JBS takes on troubled XL Foods plant

By Patrick McGuigan

- Last updated on GMT

JBS takes on troubled XL Foods plant
JBS takes on troubled XL Foods plant

Related tags Jbs usa Xl foods Meat

The US arm of Brazilian-owned company JBS has taken over the management of XL Foods’ beef processing plant in Canada, which is at the centre of an E.coli outbreak and massive product recall.

JBS USA, a subsidiary of JBS SA in Brazil, signed a deal on 17 October with Edmonton-based XL Foods to run the Canadian company’s Lakeside slaughterhouse in Brooks, Alberta. It also has the exclusive option to buy the factory and several other XL properties.

The plant’s operating licence was suspended on 27 September by the Canadian Food Inspection Agency (CFIA) after tainted beef products were exported to more than 20 countries and 16 Canadians fell ill with E.coli from eating meat processed by the XL plant. The CFIA is currently investigating controls and hygiene practices, and is carrying out tests on carcases at the plant, which remains closed. Millions of tonnes of beef products have been recalled and are in the process of being destroyed or rendered.

In a statement, XL co-CEO Brian Nilsson said the agreement with JBS was “another positive step to relicensing”​ the Lakeside plant. “We welcome the assistance of JBS and its resources,​” he said.

Bill Rupp, president and COO of JBS USA, said: “As the world’s largest producer of animal protein, we know full well the commitment it takes to manage world-class operations that produce safe and nutritious products for consumers around the world to enjoy. We believe our experienced team will prove an invaluable asset in the management of XL Lakeside and we look forward to exploring our options to purchase XL assets in the near future.”

As well as the Brooks plant, the agreement gives JBS the right to purchase other XL sites, including a beef packing operation in Calgary; a feedlot in Brooks, Alberta, and the adjacent farmland acreage; a beef packing plant in Omaha, Nebraska, and a beef packing plant in Nampa, Idaho. JBS has agreed to pay $50m in cash and $50m in JBS SA shares, if it goes ahead with the deal.

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