January 26, 2010

China to boost soy crushing capacity in 2010

China's soy industry will have another six million tonnes of capacity in operation, raising total capacity to 100 million tonnes by the end of this year.

In 2009, China has imported a record 42.55 million tonnes of soy mainly from the US and South America. Its imports already account for more than half of world soy trade.

Nonetheless, state-owned companies are racing to expand to capitalise on China's growing market for edible oils and livestock. The industry, which crushes soy into soyoil and soymeal, already owns larger-than-needed capacity with almost half of current capacity not in use.

Among six new plants, two plants owned by state-run COFCO Co Ltd, will start operating, one in Guangxi and another in Tianjin, said the China National Grain and Oils Information Centre (CNGOIC).

COFCO's Fangchenggang plant will process up to 1.2 million tonnes of soy a year while its Tianjin plant will have the same size in initial capacity.

COFCO is also expanding its plant in Rizhao, Shandong province to 6,000 tonnes a day, which will be on stream around March to April, said the centre.

Another state-owned firm, Sinograin, which manages the central government grain reserves, will start operating two soy plants in Dongguan, Guangdong province and Zhanjiang, Jiangsu province in the east, said the centre.

All of the plants located along the coastal areas will crush imported soy. Besides the two state-owned firms, another state-owned Chinatex Grains & Oils Import and Export Corp is also expanding rapidly.

Beijing has restricted expansion by Singapore-based Wilmar International, which has the largest market share, but encouraged state-owned firms to expand in an effort to ensure the country's food security is not in the hands of foreign companies.