Butcher hanging up sides of meat in freezer. Victor Moriyama/GettyImages
Butchers work at the popular Lapa Market March 20, 2017, in Sao Paulo, Brazil.

Gilberto Tomazoni is first non-Batista to rise in JBS leadership

As COO, Tomazoni is second only to Jose Batista Sobrinho -- the JBS in JBS -- who has returned as CEO at the age of 84.

by Gerson Freitas Jr. and Tatiana Freitas

Few families have shaped corporate Brazil quite like the billionaire Batista clan. 

Which is what makes the rising star inside their powerful business empire a novelty.

His name is Gilberto Tomazoni -- and he’s not a Batista.

Tomazoni has been dubbed chief operating officer. No one outside the family has ever occupied such a lofty perch at JBS SA, the giant meat company behind the clan’s fortune and, more recently, a focal point of the ever-widening corruption scandal known as Carwash.

It’s a notable shift for the Batistas. As COO, Tomazoni is now second only to Jose Batista Sobrinho -- the JBS in JBS -- who has returned as chief executive officer at the age of 84.

After Wesley and Joesley Batista, sons of patriarch Jose Batista Sobrinho, were jailed, Tomazoni has emerged as a face of quiet amid the storm, helping quell investor concerns about the future of one of Brazil’s largest companies.

"It is a step in the right direction," said Arjun Jayaraman, a money manager who helps oversee $3.4 billion in assets, including some $30 million in JBS shares, at Causeway Capital Management LLC in Los Angeles. "Sounds like the first in a long path."

Batistas’ arrest

Long indeed. After leading JBS for the past decade and facing ever-growing scrutiny over their political ties, Wesley and Joesley Batista confessed to bribing thousands of officials and closed a plea deal with prosecutors in May. They were arrested in September amid separate investigations -- the former as part of a probe on insider trading, and the latter because of allegations of hiding information during the plea. Both brothers have repeatedly denied wrongdoing. 

There have been some murmurs over the patriarch’s ability to run the company, by far bigger, more diversified and complex than the slaughterhouse he founded 60 years ago. To some extent, Tomazoni is the one effectively running JBS. As COO, a newly created position, the 59-year-old engineer is now responsible for overseeing the company’s beef, pork and chicken businesses.

"In general, the CEO position is held by executives that are 40 to 50 years old, not 70 to 80," said Paulo Rabello de Castro, the CEO of BNDES, Brazil’s state development bank that’s also JBS’s second-largest shareholder. "A position such as emeritus chairman would be better for the company’s founder," he said Wednesday at an event in Sao Paulo.

Potential pitfall

Tomazoni and other JBS executives declined to comment for this story. In an emailed response to questions, a press official for the company said Tomazoni has "vast experience" in the food industry and that he has always "actively participated" in the businesses’ strategy and its impacts on the commercial and financial sides.

Interviews with people who know Tomazoni paint a portrait of an executive who grew up in the meat business but lacks high-level financial skills -- a potential pitfall.

Like Wesley Batista, Tomazoni hails from the countryside. The son of a small-town hog farmer, he’s spent his entire career in the meat industry, most of it in now-defunct Sadia SA, where he started out as an intern, in 1982, and eventually rose to become CEO. 

Sadia prospered under his stewardship, but the company got hit by crippling losses after its chief financial officer made wrong-way currency bets that eventually led to its takeover by rival Perdigao SA in 2009. Tomazoni was replaced after the merger. 

After a short run at Bunge Ltd., the global commodities giant, he joined JBS in 2013.

Deep knowledge 

The executive is considered an operations guy. People who know him say he has a deep knowledge of the chicken and pork businesses and relentlessly searches out ways to increase productivity. He can spend hours in meetings digesting small details.

JBS has said it’s looking for a new chief financial officer, something that BNDES has demanded. It also named Wesley Batista Filho to lead the company’s business in South America under Tomazoni. 

Some investors have speculated that Tomazoni might one day rise to CEO -- in 2016, he was appointed for the top post at JBS Foods, the international unit JBS had planned to list in New York. So far, however, the family patriarch has held tight. Any change could require the blessing of the Batistas, who still hold most of the votes on the board.

JBS said it’s premature to discuss succession plans for the CEO at this point and that its governance structure is "very well organized."

Still, some investors hope JBS will step out of the Batistas’ shadow, particularly given the Carwash scandal.

"Tomazoni is a professional with large experience in the sector, and he is not from the family," said Soummo Mukherjee, a strategist at Mizuho Securities USA LLC in New York. "The fewer Batista family members in JBS, at this stage, the better JBS will be perceived by investors."

To contact the reporters on this story: Gerson Freitas Jr. in São Paulo at [email protected]; Tatiana Freitas in São Paulo at [email protected]

To contact the editors responsible for this story: Simon Casey at [email protected]; Millie Munshi at [email protected]

David Gillen, Julia Leite

© 2017 Bloomberg L.P

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