JBS eyes Brazil's milk market

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Brazil's JBS , the world's biggest beef producer, intends to expand its dairy business with strategic plans next year after the unit's double-digit growth in recent years.

``Until now, that growth has only been organic, without any acquisitions ... We have plans for 2012 that will be important to guarantee and increase our presence,'' JBS said in its third-quarter earnings report. ``Those strategies will be announced at the proper moment.''

JBS posted a net loss of 67.5 million reais ($38 million), compared to a 143 million reais profit a year earlier. Losses in its Pilgrim's Pride unit, squeezed by rising grain costs and excess supply in the North American poultry market, triggered the shortfall, the company said.

A steep currency plunge in the period also pushed up the cost of foreign debts, but JBS said its hedging policy cut down the effect of the exchange rate swing on its bottom line, even reducing its financial expense from the prior quarter.

JBS has made more than 14 major acquisitions in the last six years -- including U.S. rivals Swift, Smithfield Beef and Pilgrim's Pride -- generating investor concerns about mounting debts and unwieldy scale.

Chief Executive Wesley Batista told Reuters in March that the buying spree would cool this year, but the acquisition fever would never pass entirely, saying expansion is in JBS's DNA.

Earnings before interest, taxes, depreciation and amortization, an indicator of operating profit known as EBITDA, fell 24 percent from a year ago to 787 million reais.

($1 = 1.77 reais)

(Reporting by Brad Haynes, editing by Bernard Orr)



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