March 9, 2011

 

Zuellig Group to venture into corn production

 

 

The Zuellig Group, one of the largest privately held global firms, is seeking to build a 30,000-hectare corn plantation in the Philippines to secure its feed milling requirements.

 

It would be the first time for the diversified group to engage in massive corn production amid surging commodity prices, an executive said late last week.

 

Moving forward, the Zuellig Group might also bring in its agriculture equipment business in addition to pharmaceutical distribution, insurance and property business in the country.

 

"If you look at our organisation, we need corn for processing. We are looking in the region to produce corn. You can see that there is competition everywhere for food. For the security of supply, we want to produce our own corn so we are looking around," Kim Campbell, executive chairman of Pharma Industries, Inc. of the Zuellig Group, said.

 

The Zuellig Group is already conducting test runs of corn plantations in the region.

 

Most feed makers flock the spot market to secure corn. But prices of corn have more than doubled to US$310 per tonne this month from US$159.01 per tonne in the same period last year, data from the USDA Market News showed.

 

Campbell described the budget for the agro-industrial venture as "sky is the limit" given the need to build roads, irrigation facilities, a jetty, and a silo.

 

The century-old Zuellig Group is into health care distribution and pharmacy services, agribusiness manufacturing and distribution, and agricultural and materials handling equipment supply and services. It has a turnover of more than US$12 billion annually.

 

Campbell said the company prefers contiguous areas, adding that the group will have the capacity to produce corn on a massive scale given its farm machinery.

 

Marriz B. Agbon, president of the Philippine Agricultural Development and Commercial Corp. (PADCC), said, "We have briefed them on the corn industry and suitable lands or corn production in the country."

 

"I believe they will get back to us within the next two months," Agbon said last week.

 

The PADCC is the agribusiness marketing arm of the Agriculture department.

 

"There is a preference for areas in Mindanao with proximity to port facilities," Agbon said, adding that potential corn plantation areas include Palawan and Davao del Norte.

 

Corn production in the country is expected to climb by 11% to seven million tonne this year amid better weather conditions, data from the Agriculture department showed.