August 10, 2006

Brazil's Amaggi Group to invest US$45.87 million in new soy unit

Brazil's Amaggi Group said Wednesday (Aug 9) that it will invest 100 million Brazilian reals (US$45.87 million) to build a new soy-crushing facility in north Mato Grosso to serve the local market.

The new greenfield facility, located in Lucas do Rio Verde in north Mato Grosso, will have the capacity to crush 3,000 tonnes of soybeans per day in a region responsible for 40 percent of Mato Grosso's total soy production.

"We're still buying the land for the project. We decided to do this because the region does not have any mid-sized or large soy crushing companies there," said Waldemir Loto, general manager at Amaggi Group. He said that Sadia, Brazil's leading meat packer, had a new facility in Lucas do Rio Verde and Perdigao, Brazil's second largest chicken company, was also nearby.

The new Amaggi facility will dedicate its production to serve the local soymeal market for animal feed.

"The new building will be right next door to Sadia's facility," Loto said.

Mato Grosso is Brazil's biggest soy producer. Amaggi Group also owns and operates its own soy farms in the state. The company is the largest soy grower in the world.

Amaggi currently crushes roughly 3,500 tonnes of soybeans daily at its two facilities, one in Mato Grosso and the other in the state of Amazonas, along the Amazon River.

Amaggi's announcement comes at a time when Mato Grosso soy farmers are suffering one of their worst financial crises in years. Conservative estimates are for the state to reduce its soy planted area by 10 percent in the 2006/07 season.