Our Business is a

‘People Business’ September 2013 By C. Bruett I recently sat down with Wesley Mendonça Batista, President and CEO of JBS S.A., and second eldest son of JBS founder José Batista Sobrinho, to get his thoughts on his life, our company culture and how each of us can contribute to the success of JBS.

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he interview is scheduled to begin at 2 p.m. MST and end a short 15 minutes later. Wesley, in Greeley for a series of annual

reviews with JBS USA business unit leaders, maintains his legendary marathon-like pace of meetings and conference calls. Scheduled to depart shortly after our interview for São Paulo, home of JBS global headquarters, Wesley’s time is in short supply. I hope to get about 10 of our scheduled 15 minutes to share some of the thoughts of our global CEO with the JBS family. Of course, the meeting does not start on time given back-to-back-toback business meetings, but once we are able to close the door of his modest third floor office and sit down, Wesley speaks passionately about his family, his life, and our business for more than an hour – ignoring phone calls and other potential disruptions. His passion and determination is both inspiring and cause for reflection. After spending but a few moments with Wesley, any JBS team member is forced to ask themselves, “Am I doing all I can to help JBS succeed?”

FROM BRAZIL TO THE U.S. The beginnings of JBS are well-known to many of us in the JBS family. José Batista started the company in 1953 in Anápolis,

a modest-sized city in an agricultural region in the State of Goiás, Brazil. The legend goes that José began his business by slaughtering only one or two cattle a day and selling the meat to a local butcher. He grew the business — slowly at first — by providing meat to the workers who were busily constructing Brazil’s new capital, Brasilia, in 1956. In the late 1960s, José bought a slaughterhouse and began to build what would one day become the largest animal protein company in the world. Wesley started his role in the company at an early age, learning from his father the business of buying and selling cattle, and the values of working hard and expanding your knowledge every day. Sitting in a meeting with Wesley today, you can’t help but notice his attention to details and his desire to understand even the smallest element Continued on PAGE 2

In February 2011, Wesley became President & CEO of JBS S.A.

of the topic at hand. “I started work when I was very young and at 17 I left high school to run a business. Not to work – I was already working – but to run a business. Over my career, I think I have put a huge amount of effort into working hard and learning every day. Things that you do not know are not a problem. But to not have interest to know or to learn – that is a problem. You must have a desire to learn. Focusing on the details has been one of the keys to my success.” In 2007, JBS officially entered the U.S. market with the purchase of Swift & Company. Hicks Muse, a private equity firm, purchased Swift from ConAgra in 2002. After less than six years of ownership and less-than-expected financial results, Hicks Muse decided to sell the company. Enter JBS S.A., the largest beef processor in South America. Largely unknown to the U.S. beef and pork industries at the time, JBS faced regulatory scrutiny and the questions of industry observers skeptical of Swift’s ability to experience a turnaround under Brazilian management.

Wesley considers the acquisition of Swift “the most memorable moment of my career.”

why is Swift not performing well?” And, according to Wesley, the answer to that question is both obvious and the key to our success today. “When you look at the livestock business, it is very THE MOST MEMORABLE MOMENT OF MY CAREER simple. Our business is a people business, not a “People used to always ask me, ‘why did JBS acquire manufacturing business. There is no advantage in buying Swift in 2007?’ Well, the answer is very simple. The first cattle – we can all access the same market. There is no thing we did when Hicks Muse put Swift up for sale was advantage in selling the meat. Whether domestic or export, analyze the U.S. market and the beef players in the marthe same markets are open to everyone. The beef plant is ket. What we discovered was that one company – and I a labor intensive business. It is not like medicine where will not name this company – remained profitable every a new technology is created that puts you 10 years ahead year, even during the BSE crisis of 2003.1 But Swift was of your competitors. So, if you buy the same cattle and losing money. So, we asked the question: If somebody else sell the meat in the same markets, what is the difference? was able to not lose money in good and bad times, then Why was Swift not performing well? Management. How 1 In December 2003, the U.S. experienced its first case of Bovine you manage the business is the difference.” Spongiform Encephalopathy (BSE) or “Mad Cow Disease,” in a cow imImagine this. You have operated a successful business ported from Canada. The incident immediately closed access to international markets with 65 nations implementing full or partial bans on U.S. beef imports.

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What is Your Advice for Young People Who Would Like to Grow in JBS? “Everyone has a desire to succeed, but not everyone is willing to put more effort in than normal. Want? Everybody wants! But to want is not enough. I have a 21-year-old son and I tell him all the time: ‘If you want to succeed and grow, let me tell you what you need to do. Every place that you work – if people come to work at 7a.m., you come to work at 6 a.m. If people leave

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work at 5 p.m., you leave work at 7 p.m. If people don’t come to work on Saturday, you come to work on Saturday.” This is the only way. Everybody wants! A friend of mine, Bernardinho, is the most famous volleyball coach in all of Brazil. He has trained the Brazilian men’s national team for the past 10 years and they have been world champion five or seven times. He told me,

‘every player wants to be on the national team, but not every player wants to train and is willing to do the work to get there.’ He says to the players, ‘If you want to be on the national team, you have to train 14 to 16 hours per day. If you want to train only 6 hours, this is not enough. Why? Because everyone will train for 6 hours. You must work harder than everyone else to be on this team.’”

What Does Leadership Mean to You? “First of all, it means passion – having a huge amount of determination to win.

only way to win is to surround yourself with a good team.

people who are complementary and stronger than you in areas where you are weak.

Second, it means being simple. We are not a company that likes arrogance or treating people poorly. We don’t want people that think they can ‘do it alone.’ Some people think they are stars and that they don’t need others, but your quality alone is not enough. The

Third, know your weakness. No one is perfect. Everyone has a weakness and you must be able to recognize yours. Throughout my career I have met people who had a huge problem with recognizing their weaknesses. This should not be a problem! You need to be around

For example, my younger brother and I have worked well together for 20 years. Why? Because he recognizes areas where I am better than him and I recognize areas where he is better than me. And I do not mind! This does not diminish me.”

For Wesley, these are not merely words on a wall, but the foundation on which his father’s company was built. for a number of years in your home country but have a desire to do more. You want to take on a new challenge, grow your business and reach more customers. An opportunity comes your way in the form of a business much larger than yours, in a foreign country that you have very little knowledge of and, by the way, whose language you cannot speak. Sound challenging? “When we acquired Swift in 2007, we acquired a company that was much bigger than us at the time. We came to a country that we were not familiar with and we were not familiar with how the market worked. I came to the

U.S. to run a business without being able to communicate – which was a huge barrier. This was the most challenging and memorable moment of my career. It is something I will never forget.”

SHARING THE JBS CULTURE Since 2007, JBS has returned the Swift beef and pork operations to profitability. But JBS was not satisfied. In 2008, JBS acquired the beef operations of Smithfield and Continued on PAGE 4

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The Certainty of a Better Future for All Team Members

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We want to be a company that provides an opportunity for people to grow in their career, grow culturally, and grow financially. We want every team member to be in an environment where people feel they are with family. If we do not do this, we are not accomplishing our mission.

culture throughout our organization but also engaging a broader audience. In Brazil, JBS is a well-known company that generates national pride. Brazilians want to work for JBS because of its history, its values and its culture. JBS S.A. has an annual internship program for college-level students. Each year, 20 -25 positions are available for the program. Last year, JBS received more than 14,000 applications. How can JBS USA generate that type of enthusiasm in the United States? “It takes many things to create the

type of good will we have established in Brazil. We have to share our values with the market and be honest about what we believe. For example, last year I went to 10 universities in Brazil to speak to graduates and explain our company, what we believe, our objectives and how we are involved in local communities. It is important to expand our network with local communities and tell our story. When people understand our beliefs, our culture, and our values, and that we do not compromise our values during difficult times, then they will want to work with us.” Continued on PAGE 5

What is a Normal Day Like for Wesley Batista? “I get up very early and work until late. Most of my days are 14 to 15 hours of work. I am usually in the office in São Paulo by 6 or 6:30 a.m. and work until 8 or 8:30 p.m. but sometimes until 10 p.m. I start each day with a schedule. It is important that you start the day knowing what you will do to be productive. It is not good to start your day in the

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the Five Rivers feedlot operations. In 2009, JBS acquired a majority share in Pilgrim’s Pride Corporation, the second largest poultry company in the world. With all of this growth in a short period of time, it can be a challenge to share the JBS culture with all of its new team members. So how do you accomplish this? How do you make sure the values that adorn the walls of our plants, facilities, and offices around the world are not merely words on a wall? “There is no magic. You cannot just say, ‘these are our values.’ You have to live them. The most efficient way to implement a solid culture in a company is to provide an example of what we believe our values to be. We must demonstrate them every day and then they will cascade throughout our whole organization. It starts from the top – it starts with me. The way you treat people, the way you apply the values. ‘Determination’ – this starts with me and the team that reports to me. They must display strong determination at all times. ‘Simplicity’ – each of us must demonstrate this: how you treat everyone, how you address problems, how you handle the day to day issues.” It’s not only about spreading our

office, in the plants, or in the feedlots without having a schedule. Stay very disciplined with a clear agenda. You want to look back on your day and say, ‘Wow, I accomplished a lot today.’ If you arrive without a schedule, you can get lost and spend several hours not producing.

What is Your Favorite Meal to Eat at Home? “I enjoy a simple meal. Meat – beef, pork, chicken or lamb – with rice, beans and eggs. Nothing sophisticated.”

“People always ask me, ‘Wesley, what keeps you awake at night?’, and I always give the same answer. I am not concerned with the market or the latest This year marks the 60th anniversary of JBS, the world’s international trade problem. What keeps me up at largest meat producer. Processing more than 93,000 head of night is not being 100% certain that we are the cattle, more than 77,000 hides, more than 50,000 hogs, more best in every part of our business. Good moments than 18,000 sheep and more than 8.7 million chickens – happen. Bad moments happen. Markets go up and every day – JBS is ranked 725 in Forbes Global 2000 list of markets go down. Every business has cycles and the world’s biggest public companies based on sales, profits, sometimes margin is good and other times it is more assets and market value. For perspective, JBS is larger than of a challenge. We cannot control this. We do not Sprint Nextel, ConAgra Foods, Yahoo, Gap, Bed Bath & Be- control the exchange rate around the world. We do yond, Ralph Lauren, and all of our competitors in the global not control if the market in China will grow by 10% meat industry. or 5%. We control what happens inside of our doors. Our size and scale are quite impressive, but our mission We have the best team in the industry and we can run is not to be the largest. It is to be the best. How can each our business more efficiently than anyone else. This of us contribute to fulfilling the mission of making JBS the we control. If we are 100% certain that we are the best meat company in the world? best in everything we do, then our business will have longevity.” “How do we become the best? First, our team. We have the best team in the industry. Our business is a people busiAfter more than an hour of sharing his life’s passion ness and we have the best people in the business working – JBS – with one team member out of the more than at JBS. Second, attention to details. Our business is a detail 140,000 of us worldwide, I asked one final question – a business. If you do not like details, this is not the business simple question, yet one that obviously held great imfor you. Every small piece is critically important and every portance to Wesley: What do these past 60 years mean to team member has a major role in our success. If all of us you? are focused on every Lowering his voice to detail, then together almost a whisper, Weswe can outperform our ley leaned over his desk competitors. Our misand humbly expressed sion is ‘to be the best in how proud he is of JBS. all that we do’ and for us Even though JBS is a this is the key. If we are sizable company today, not the best in everything the same values and we do, then over time culture on which the we will be behind. It is company was founded like a marathon. We must remain with us today. continue to work hard “This anniversary over each mile of the race means a lot to my famto be the best in that mile. ily and to everyone Over time we will be in at JBS. We have a lot Wesley Batista in front of JBS global headquarters in São Paulo. the first position and will of pride in what we win the race.” have accomplished over the past 60 years. We never paid one bill one day late. My dad – I care a lot that I asked Wesley how we, members of the new JBS global we have been able to take my dad’s business to new family, can help ensure the longevity of the company his heights and carry his values with us.” family built in west central Brazil 60 years ago.

WE ARE THE LARGEST. HOW DO WE BECOME THE BEST?

JBS USA Communications • 1770 Promontory Circle, Greeley CO 80634 970.506.7801 • [email protected]

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