* JBS plants seen drawing little interest
* Argentine government may finance transaction
(Adds trade group comment, comment from source close to
potential sale, background)
SAO PAULO/BUENOS AIRES Aug 31 JBS (JBSS3.SA),
the world's top beef producer, could struggle to sell three of
its Argentine plants due to government policies that have
depleted cattle stocks and hurt profits, a trade group said on
"It will take four to five years to recover the volume of
cattle needed to meet domestic and export demand," said Miguel
Schiariti, president of Argentina's Meat Industry and Trade
Chamber (CICCRA). He said the business would remain
unprofitable for several years because of government policies.
JBS, based in Sao Paulo, Brazil, told Brazilian regulators
on Sunday that it may sell some of its eight Argentine
slaughterhouses because of "scarce livestock and export
Argentine President Cristina Fernandez's administration has
imposed export quotas on beef and some grains to guarantee
domestic supplies and tame prices.
A source based in Buenos Aires who is close to the
potential sale said on Tuesday that JBS was trying to sell
three plants that were "nearly paralyzed" because rising cattle
prices had reduced profits.
The source said this decision was made "in desperation,"
although he said the company does not want to leave Argentina
altogether but would rather reduce its holdings in the country
until market conditions improve. The source asked not to be
named because the person is not authorized to speak to the
Brazilian newspaper O Estado de S. Paulo, citing unnamed
sources, reported on Tuesday that potential buyers would
probably be discouraged by the extent of government
restrictions, which have included export curbs and price caps.
Estado also reported that Argentine Domestic Commerce
Secretary Guillermo Moreno had offered local industry leaders
state loans to finance the purchase of JBS' units.
"Moreno wants to find someone (to buy the units). He's
offering state loans," Schiariti said. "But there's nothing
concrete. These are just promises."
JBS' media office declined to comment on the Estado story,
and officials at Argentina's Domestic Commerce Secretariat did
not immediately return calls for comment.
Argentina is traditionally a leading beef exporter, but
shipments have been disrupted because of government
Increasing numbers of Argentine ranchers are turning fields
over to more lucrative soybeans, pushing up beef prices and
triggering state intervention to limit price increases of the
nation's favorite food.
Livestock slaughter is quickly declining and Argentines are
eating less beef, with annual per capita consumption falling
nearly 17 percent in the first half of this year to 56.7
(Reporting by Guillermo Parra-Bernal in Sao Paulo and Luis
Andres Henao and Guido Nejamkis in Buenos Aires; Additional
reporting by Maximilian Heath in Buenos Aires)