April 4, 2018 / 7:45 PM / 9 months ago

Brazil's BRF places workers from two plants on furlough

FILE PHOTO: A meatpacking company BRF SA's logo is pictured in Sao Paulo, Brazil March 17, 2017. REUTERS/Paulo Whitaker/File photo

SAO PAULO (Reuters) - Embattled Brazilian food processor BRF SA (BRFS3.SA), reeling from a food safety scandal, will place 3,500 workers on paid leave at two plants, the latest move to adjust capacity following a government-imposed trade ban affecting exports to the European Union, the company said on Wednesday.

BRF said it would send 1,300 workers on leave at its Carambeí plant in southern Brazil, in addition to 2,300 people from its Rio Verde poultry production line in central Brazil. The leaves, effective from May 21 and May 14 respectively, will last 30 days at both plants, it said.

“As is in the public domain, Brazil’s agriculture ministry decided to temporarily and preemptively suspend production and certification of BRF poultry exports to the European Union from March 16,” BRF said in a statement.

The move raises the tally of employees affected by measures to adjust capacity to demand to around 7,000.

Last month BRF said it would send around 3,000 people on furlough at its Capinzal plant state effective May 7.

BRF also sent more than 1,000 workers on leave at its Mineiros plant, one of the units involved in the food safety investigation that preceded the trade suspension related to Europe. Some 623 people at Mineiros’ chicken production line have since returned to work, BRF said on Wednesday.

BRF shares fell 0.5 percent to 23.06 reais in mid-afternoon trading, reaching a low of 37 percent this year, as the company still reels from the food probe, which accused managers of acting to evade safety checks.

The stock price is also impacted by an imminent management shakeup being pushed by controlling shareholders after the company posted its largest ever loss last year.

(Official Correction: This story corrects 2nd paragraph to say paid leave will start in May, not April)

Reporting by Ana Mano and Paula Laier; editing by Diane Craft

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