Brazil Stock Guide — JBS (NYSE: JBS; B3: JBSS32) has launched a R$400 million offering of tax-incentivized infrastructure bonds to reimburse spending already made on three biodiesel plants and its terminal at the Port of Itajaí in southern Brazil.
A substantial share of the investments has already been completed, although the projects remain underway. The proceeds therefore do not represent R$400 million of additional capital expenditure.
The bonds will be issued by JBS S.A., the Brazilian subsidiary of Netherlands-based JBS N.V., which will fully guarantee the transaction. They will mature in ten years, be indexed to Brazil’s IPCA inflation rate and pay interest annually.
Pricing is scheduled for July 24. The yield will be capped at 15 basis points above Brazil’s NTN-B inflation-linked government bond due in May 2035. Itaú BBA is coordinating the offering, which is restricted to professional investors. Settlement is expected on July 28.
Biodiesel Receives 62% of the Proceeds
Of the total, R$249.1 million will reimburse expenditures on biodiesel projects operated by JBS subsidiary Biopower in Campo Verde, Mato Grosso; Lins, São Paulo; and Mafra, Santa Catarina.
The projects will increase the plants’ combined capacity by 36%, from 1,995 cubic meters to 2,714 cubic meters per day. The additional capacity is equivalent to about 262 million liters of biodiesel annually, assuming year-round operation at full capacity.
Mafra will expand capacity by 34%, from 1,025 cubic meters to 1,370 cubic meters per day. The project accounts for R$65.8 million of the proceeds.
In Campo Verde, capacity will rise by 46%, from 410 cubic meters to 600 cubic meters per day. The R$94 million project includes a new boiler, reactors, centrifuges, distillation columns, pumps and heat exchangers.
Lins accounts for another R$89.3 million. Its capacity will increase by 33%, from 560 cubic meters to 744 cubic meters per day.
The three plants will replace conventional chemical catalysts with high-efficiency enzymes. JBS says the process will allow them to handle multiple feedstocks, improve efficiency and increase the use of waste and agro-industrial byproducts.
The projects may also generate CBIO decarbonization credits under Brazil’s RenovaBio program. Campo Verde and Lins hold the Social Biofuel Seal, which links part of their output to feedstocks purchased from family farmers.
JBS Anticipates Higher Biodiesel Demand
The expansion comes as Brazil considers raising the mandatory biodiesel content in diesel. The blend remains at 15%, known as B15, while B16 is still undergoing technical validation.
Brazil’s Fuel of the Future Law provides for gradual increases but makes blends above B15 conditional on tests of engine performance and durability.
For JBS, the projects add capacity ahead of a potential increase in regulatory-driven demand. They also deepen vertical integration by converting byproducts from its meat-processing operations into fuel, revenue and environmental credits.
Investment in the plants began in July 2022, and a substantial portion of the planned spending has already been made.
Itajaí Accounts for R$150.9 Million
The remaining R$150.9 million, or 37.7% of the offering, will reimburse expenditures on the modernization of the JBS Terminais facility at the Port of Itajaí.
The project includes civil works, paving, drainage, power and water networks, fire-protection systems, automation, access controls, scanners and cargo-handling equipment.
JBS Terminais has operated the facility under a temporary lease with Brazil’s federal government since December 2023. Investment began in May 2024, and the broader modernization program is expected to be completed by September 2027. A new tender for the terminal is expected later this year.
The upgrade is intended to increase productivity, reduce waiting times and give JBS greater control over a critical link in its export supply chain.
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