June 8, 2009

Bunge Group to construct new base for China grain exports

Bunge Group will establish a grain export hub along the Port of Longview for export to China and other Asian markets.


The grain export hub is expected to have an annual throughput capacity of eight million tonnes or more to enable four 110-carriage freight trains to loan and unload grains at any time.


Bunge Group not only exports grains to China, but also operates cereals and oils processing plants in China, a large agricultural country in the world. The grain giant is confident that with China's accelerating urbanization and the expansion of the country's breeding industry, the demand for feedstuff and soyoil would increase.


In 2008, China imported 37.44 million tonnes of soy, which were seven million more than those imported in 2007. Of the total, up to 40 percent were imported from the United States.


China is one of the major markets of Bunge Group. The foreign foodstuff group in the first quarter of this year achieved sales revenues of US$9.198 billion, down 26 percent versus US$12.47 billion in the same period of 2008.


Other international foodstuff giants are also trying to raise the influence in China's foodstuff market. Wilmar International Limited in Singapore is one of them. Currently, the Arowana-branded edible oil of Wilmar takes a 40 percent share in the edible oil market of China's Mainland, not only for its high quality, but also a complete industrial chain.


This March, Wilmar announced to construct two 40,000-tonne ports in Taizhou, a second-tier city in east China's Jiangdu Province. In partnership with a Chinese port company, Wilmar is to contribute more than US$10 million out of the total RMB 280 million investments. Once set up, these two ports would have an annual throughput of 1.3 million tonnes.


In the past, Bunge Group reaped total revenues of US$52.57 billion and Wilmar realized total revenues of US$29.15 billion. In terms of the industry chain, COFCO Group Limited among China's foodstuff companies is the only one that can be comparable with Bunge Group and Wilmar. China Agri-Industries Holdings Limited (0606.HK), the Hong Kong-listed subsidiary of COFCO Group, in 2008 made revenues of HKD 27.5 billion.