August 8, 2007

Bunge to invest in new soy crush facility in Brazil

Bunge Alimentos, a Brazilian subsidiary of Bunge Ltd. (BG) of the US, is investing in a new soy crushing facility designed to produce soyoil for biodiesel, local business daily Valor Economico reported Tuesday.

Sergio Roberto Waldrich, president of Bunge Alimentos, told the newspaper that the new soy crushing facility will replace an older facility in Rondonopolis in the interior of Mato Grosso, Brazil's No. 1 soy producing state.

The new unit will be located near the Ferronorte railroad, cutting down on the company's transportation costs. Transportation costs account for nearly 10 percent of the per-bag soy price.

Waldrich didn't give details about investment and the actual location of the new facility but said it should be operational by the end of 2008. Bunge intends to invest a total of US$500 million in 2007, similar to 2006 investments in Brazil, the newspaper reported.

Bunge didn't return phone calls placed by Dow Jones Newswires.

Waldrich told the newspaper that Bunge Alimentos, the food division of the company, will see revenue and profit increases this year, but he didn't go into details. Last year, Bunge Alimentos reported gross revenue of 10.6 billion Brazilian reals (US$5.6 billion) and a net loss of BRL84.2 million, the newspaper reported.

Waldrich blamed a weaker US dollar for the loss. The dollar is currently trading around BRL1.90.

Bunge is one of Brazil's largest agricultural commodities exporters.