The world’s largest meat processor, JBS, has announced plans to establish an office in the IFSC in Dublin, the Irish Farmers Journal has learned.

JBS plans to restructure its business into two separate entities: JBS Brazil and JBS Foods International. All of the group’s Brazilian operations will be consolidated into JBS Brazil, while its international processing operations in the US, Australia and Europe will be merged into a new company called JBS Foods International and will be listed on the New York Stock Exchange.

While management at JBS would only say that the newly formed JBS Foods International would “most probably” be based somewhere in Europe, the Irish Farmers Journal understands the group has chosen to locate its new business in Ireland and is in the process of creating a new company office in Dublin.

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Speaking to industry sources over the weekend, the Irish Farmers Journal understands the move to be a “tax play” as JBS will then be able to avail of Ireland’s low corporate tax rate of 12.5% – much lower than the near 35% income tax rate the group pays in Brazil. As such, it is believed the group would employ a small staff of less than 10 people in Dublin.

The reasons for JBS to restructure are straightforward. Currently listed on the Brazilian stock exchange, the group has faced significant currency challenges since the Brazilian economy entered recession 18 months ago.

With much of its borrowings denominated in US dollars, its repayment costs have increased significantly as the Brazilian currency (real) has depreciated – down by almost 40% against the US dollar in the last two years.

Coupled with this, soaring interest rates in Brazil are driving up the company’s borrowing costs and making it less competitive with rivals like Tyson Foods in the US.

A move to the New York Stock Exchange will give JBS greater access to the international equity and debt capital markets, enhancing its ability to raise finance and lowering its borrowing costs substantially.