November 5, 2009

Los Grobo SA, Argentina's second-largest soy producer, plans to double its land holdings over the next three to four years to remain competitive as global demand for food increases, said its chief executive officer.

Owner and CEO Gustavo Grobocopatel said growth will have to be mainly through Brazil because it is where there is the most physical space available to grow.

Brazil and Argentina are the world's second- and third- biggest producers of the oilseed, behind the US. Both countries expect record crops in the 2009-10 season.

Brazilian farmers are expected by Safras & Mercados to plant 22.8 million hectares of soy this year, while Argentina farmers are projected by the country's soybean association to plant 19 million hectares.

Grobocopatel said only 3 or 4 million hectares are left to expand crops in Argentina and mostly are marginal areas, adding that Brazil has 20 million hectares of prime quality farmland ready to be developed.

Family-owned Los Grobo operates in Brazil in partnership with the investment fund Vinci Partners. Los Grobo has 50 percent of its production in Argentina, 30 percent in Uruguay and 20 percent in Brazil.

Grobocopatel also said the company is targeting output of at least 4 million tonnes over the next four years.

He noted that Argentine production can be increased with better production systems and improved technology to increase production rates, but requires investments and export tariffs block them.