BRAZIL-11 MEAT PLANTS CLOSED AND CATTLE SENT BACK TO OWNERS.
Independencia are the fourth largest beef packers in Brazil, who operate 11 beef plants along with three tanneries where they produce finished leather.
On Saturday morning, all the plants were closed and staff were sent home.
Cattle in the lairges that had not been slaughtered, were sent back to the farms that supplied them.
The company is one third owned by the Brazilian development bank BNDES, however farmers have been complaining for the most of 2009, that payments for cattle have been delayed or not forthcoming at all.
This comes in the wake of poultry giant Sadia losing US$450 milion in currency exchanges, that has caused many class action law cases in the USA from shareholders demanding their money back.
This has been coupled with allegations of false accounting and cover up by the companies board of directors, causing the sacking of the company accountant and resignation of the CEO.
Making matters worse and causing more alarm, is the fact that beef producer Arante, has defaulted on interest payments on loans obtained in the United States.
This leaves JBS-Friboi and Mafrig, as not only the two largest processors in Brazil but also the only likely suitors to pick up the pieces, in the tattered beef industry.
Life is all about timing, JBS-Swift still have US$560 million loans in place for the purchase of National Beef Packers in the United States, as thay walked away from the deal last week.
JBS have a reputation of picking up meat companies, when they fall short of their financial obligations.
There is now doubt that either JBS or Mafrig, are more than competent and capable of salvaging the Brazilian beef industry.
This is going to be a very interesting week, when the banks open on Monday..
Independencia also produce leather from 80,000 hides per week, this side of the business has also been closed.