How JBS prepares for succession with the Batista family back at the helm

By Tatiana Freitas and Daniel Cancel

For 65 years, a Batista was at the helm of JBS.

After a five-year break, a member of the founding family is once again one step away from taking the reins of what is now the world’s largest meat producer – and he’ll have a lot of work ahead of him.

Although the Brazilian giant with operations in 15 countries on five continents has not announced a succession plan, 31-year-old Wesley Batista Filho is next in line for the top post, sources close to the Batista family and JBS operations told Bloomberg News.

Wesley Batista Filho, who just became CEO of JBS US, the company’s major US unit, will eventually replace Gilberto Tomazoni, 64, as global CEO.

In 2018, Tomazoni became the first CEO of the company not to belong to the founding family after a corruption scandal involving some members of the clan.

Wesley Filho and JBS declined to comment, and people familiar with the matter said there is no timeline for the succession.

But when he assumes the position, which has already been held by his father, uncle, and grandfather, it will be a crucial moment for the business, vying for the title of the world’s largest food company.

While growing in new areas such as salmon farming and plant-based foods, JBS will also need to convince global investors that governance, labor, and environmental issues are a thing of the past.

It will also need to stabilize its important meat business, which – like rivals – faces record cattle costs in the US and high feed prices.

In addition, people familiar with the company’s strategy expect that the long-awaited IPO in the US is finally close at hand.

“The big operational work has been done,” Tomazoni said in an interview last week about a US listing. In March, he called the transaction a “top priority” for the company.

The grandson of José Batista Sobrinho – whose initials named the company he founded – and son of former CEO Wesley Batista, Wesley Filho began his career at JBS on the night shift at a beef slaughterhouse in Greeley, in the US state of Colorado when he was 19.

Last year, he was named president of global operations. Starting May 1, he will manage the company’s crown jewel, JBS USA, during a challenging period for beef processors.

“We made changes in the US beef command to accelerate the recovery of that business,” Tomazoni said last week after São Paulo-based JBS posted an unexpected quarterly loss, its first in three years.

In the US beef market, JBS has barely closed its books. It is a trend throughout the industry: inflation is up, consumption is slowing, and beef margins – once fat with pandemic demand – are under pressure.

People familiar with the decision said Wesley Filho was chosen to straighten out operations at JBS US, including improving US units’ industrial and commercial performance.

He is certainly familiar with them: when first stationed in Colorado as an almost teenager, he learned how to bone a steer most efficiently, like his father and grandfather.

During frequent visits to JBS facilities, he carries a ruler in his pocket and sometimes to the production line to measure the rib cuts in inches to ensure each piece is the same size, according to people with direct contact.

FAMILY SCANDAL

Perhaps the biggest hurdle Wesley Filho will have to overcome is his name, which in Brazil stirs up recent memories of corruption scandals from the previous generation.

Six years ago, his father Wesley and uncle Joesley confessed to having bribed hundreds of politicians during Operation Lava Jato.

His grandfather, 84, then temporarily became CEO until Tomazoni was chosen.

The Batista brothers spent six months in jail and were removed from the company’s day-to-day running.

Although Wesley and Joesley are now free to return to an executive position at JBS, they keep a very low profile.

Wesley Filho was not involved in the investigations, but pushing away the memories that carry the last name is hard.

“For those who read only that Wesley Filho belongs to the founder’s family, appointing him as CEO can bring an extra governance weight to JBS shares,” said Leonardo Alencar, an analyst at XP Investimentos.

At the same time, he has demonstrated a deep knowledge of the company’s global operations by working from the factory floor to the second highest executive position, going through different leadership positions in several countries.

“That is unique in the corporate world,” said Alencar.

Tomazoni’s tenure as CEO has helped the company temporarily distance itself from the family, even though the Batista brothers’ investment vehicle, J&F Investimentos, still owns 42 percent of the meat company.

With JBS valued at about R$36 billion (US$7.3 billion), Wesley and Joesley Batista’s stake is valued at just over US$3 billion.

When adding other businesses in the holding company, which also includes one of the world’s largest pulp producers, a bank, and companies in the utilities, mining, cosmetics, and media sectors, the Batista fortune is worth about $5 billion, according to the Bloomberg Billionaires Index.

WAVE OF ACQUISITIONS

Wesley Filho’s grandfather, Zé Mineiro, worked as a butcher when he founded JBS in 1953.

Starting with the capacity to slaughter just five heads of cattle a day, the family patriarch helped supply meat to construction workers in Brasilia and then acquired his first meatpacking plant.

It was the first in a series of acquisitions that transformed his business into a global meat powerhouse.

Growth accelerated when JBS bought several global businesses, including Swift, Smithfield Foods’ beef division, and a majority stake in Pilgrim’s Pride.

The poultry, pork, and packaging acquisitions further expanded the company’s reach.

Today, JBS is the largest animal protein company in the world, with production units on five continents and the capacity to process 75,000 cattle per day.

It also markets leather, collagen, and biodiesel.

Its various brands, from the Australian Primo to the European poultry brand Moy Park, are present in family homes in more than 190 countries.

It was important to his father that Batista Filho could speak several languages after the problems he faced when living in the US during the Swift acquisition, said one of the people familiar with the situation.

Batista Filho, who studied at a boarding school in Switzerland and then left Colorado State University to join the company full-time, is fluent in English, Spanish, Portuguese, French, and German.

These skills helped him fit quickly into the local culture during his various positions worldwide at JBS, including recognizing and promoting immigrants and refugees to management positions, said people who worked closely with him.

He is also known for starting the day early – a nightmare for some of his Brazilian colleagues accustomed to starting later.

A senior JBS executive, who asked not to be identified because of private matters, said that he was summoned to a meeting with Wesley Filho at 7 am in his first week at the company. The following week, he was called to work on a local holiday.

“Today is a holiday in São Paulo, but not in Mato Grosso,” Wesley Filho told the executive.

“Let’s fly there.”

*With reporting by Felipe Marques and Blake Schmidt

With information from Bloomberg

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