Labour market crisis: immigration is key to growth, says Brent Eastwood

JBS Australia CEO Brent Eastwood in the company’s cold store at its processing plant in Wacol, Brisbane. Picture: Lyndon Mechielsen

Brent Eastwood is chief executive of an Australian business that employs 14,000 people. Yet most Australians will not have heard of him or his business, JBS Australia.

Until recently that’s the way the low-profile Eastwood has preferred it, but the business is now so big and so important to Australian manufacturing jobs that he has changed his mind, starting with a keynote speech at The Australian’s Global Food Forum event on Wednesday in Melbourne.

Eastwood’s strong message is a call to arms on the labour crisis hitting Australia.

JBS is the largest meat and food processor in Australia and owns six feed lots, 10 processing facilities as well Primo and Rivalea pork, and it recently acquired Tasmania’s Huon Aquaculture.

JBS is all about global protein supply and Eastwood says Australia is risking opportunity.

“We cannot afford to be in the commodity world – we have to operate in the world of high quality, (high valued-add). We can’t control the supply chain, but the labour challenge is the big one. We are not going to capitalise on the last 20 years of building this over the next 10 years if we can’t deal with … immigration and labour.

“It means every week the country is not producing these products and shipping them around the world for the demand that is there. Other countries will capitalise on our inability to deliver. And it’s really hard to get back.”

Skilled labour is getting older in Australia and Eastwood says it is also getting harder to encourage young workers, so the reliance has been on immigration. JBS continues to train up skilled and semi-skilled workers, but parts of the business simply needs human bodies to be there. That doesn’t exist, Eastwood says.

Jon Condon, publisher of Beef Central, has been covering the sector for 40 years. He says JBS has had a profound effect on the meat industry. “For decades Australia had always been the most inefficient meat processing sector in world labour production. The US was half the price and Brazil about a third,” he says.

In 2007 JBS bought Australian Meat Holdings. Condon says JBS invested hundreds of millions of dollars in meat plants, leading refrigeration and cold storage to create the world’s best shelf life.

“I could rattle off 20 things they spent a fortune on to make Australia competitive in the market,” he says. “The old AMH hadn’t changed in 50 years. Without JBS the Australian beef industry would be a basket case.”

Eastwood has run the Australian operations of the Brazilian giant for 10 years. He spent five years in the group’s North American business where he became a top meat trader.

His busiest year has been the last one, with the acquisition first of the Riverlea Piggery for $175m and then Huon Aquaculture for $425m, the latter after a pretty willing contest with billionaire businessman Andrew Forrest.

Each bidder realised that Australia’s fledgling aquaculture sector had significant potential and yet there had been long-term underinvestment which meant it had failed to reach critical mass.

For both Rivalea and Huon, JBS needed approval from the ACCC and the Foreign ­Investment Review Board.

In the last month JBS faced strong criticism from an ABC Four Corners program which went through a darker period in JBS’s history in Brazil.

A glowing Australian Story program on Nicola Forrest’s philanthropy shot with Andrew Forrest ran just ahead of the Four Corners. In 2017 the two founders of JBS, brothers Joesley and Wesley Batista, were caught up in a corruption scandal including bribing of politicians through their family company J&F.

The story was well publicised both in and outside Brazil at the time but Eastwood was compelled to respond. He stresses that the Batista brothers are no longer involved in running the business in Brazil and that Australia is in any event separately operated to Brazil and was never involved in any of the malfeasance.

“What happened in Brazil no one can deny,” he say. What happened down there was unfortunate. It happened in Brazil many years ago. Today we have an independent board in Brazil.

“The people that were involved in that are not on the board in any way shape or form and the governance structure that has been put in place since then has strengthened the organisation.”

In Australia JBS has a separate board. “Australia was not involved in anything,” Eastwood says. “We have a very high degree of governance control. And every meeting, every board meeting starts with our number one focus, which is people over profit at all times.”

JBS’s successful acquisition of Huon also brought criticism from green activists but that started well before the deal was done. Huon Aquaculture as a business has been running since 1986.

Eastwood insists that under JBS ownership husbandry and food quality standards will remain strong.

“A hundred per cent,” he says. “The people at Huon are outstanding people, so focused and capable and they do an outstanding job.

“Our job is to help them continue to improve what is already world-leading innovation and farming of salmon. Everything we’ve done in this country since we’ve got here in 2007 was to continue to invest and improve and support the organisation to do better, and that will continue with Huon. We will learn and enhance and give those individuals the support to continue to improve.”

Last year JBS moved into plant-based meats with the acquisition of Dutch-based Vivera, and has a robotics company Scott Technology in New Zealand.

With a track record for cutting down tall poppies, part of Eastwood’s job is to counter the common view that big is bad.

If Australia is looking to grow protein for surging world demand deep pockets are needed to drive growth at scale, both initially and for ongoing investment. This is especially true for meat processing that is so dependent on weather-affected herd levels for supply.

“When AMH was purchased by JBS in 2007, anyone could have bought it but the investment it took to continue to lift standards was the differentiator,” Eastwood says.

“Australia now has some of the best animal welfare food safety and worker standards anywhere in the world. And you need to have a relatively strong balance sheet because it’s a very cyclical business. There’s highs and lows with drought and flood. We have continued to invest every single year in our plants for animal welfare, safety and productivity gains, even in the tough years.”