Bunge acquiring majority stake in Chinese plant
April 23, 2007
by Josh Sosland
WHITE PLAINS, N.Y. — Bunge Ltd. is expanding its presence in China through a new partnership that will own a soybean processing plant in Tianjin, China. Bunge said processing capacity at the plant will be quadrupled.
Bunge’s partner in the venture is Chia Tai (Tianjin), part of the Thailand-based Charoen Pokphand Group. Bunge, which will have majority ownership of the venture, said it will manage operations at the plant, its third in China. Located near a modern port, the plant will supply China’s fast-growing livestock and feed industries as well as the large consumer market in the greater Beijing metropolitan area. Just southeast of Beijing, Tianjin is China’s third largest city.
Citing U.S. Department of Agriculture data, Bunge said soybean meal and soybean oil demand in China has grown since 1999 at compound annual rates of 11% and 13%, respectively.
"We are pleased to partner with Chia Tai to form this joint venture," said Christopher White, chief executive officer of Bunge Asia. "We expect the plant, given its strategic location and potential synergies with our existing plants in Rizhoa and Nanjing, will enable Bunge to better serve China’s expanding meal and oil markets."
Crush capacity at the plant, which began operating in 1996, will be increased to 4,000 tonnes per day, from current capacity of 1,000 tonnes. Bunge said the plant will be supplied from its soybean origination networks in the Americas.
"This joint venture is consistent with Bunge’s strategic intent to expand its integrated business in China and to work with established and respected partners in the country’s most dynamic regions," Mr. White said.