Multinational investments in portside grain storage and processing facilities indicate that global players involved in grain logistics are looking to take control at both ends of their trading arrangements – and to new levels.<\/p>\n
Iron ore and coal imports fuelling China’s meteoric economic rise and oil and gas opportunities in the Former Soviet Union may grab the headlines but, but the portside grains industry in both locations is also changing shape. Driven by rapid commercialisation of its meat and feed industries for example, China’s consumption of soybean meal is also rising fast – by an average annual rate of 11% since 1998.<\/p>\n
The US Department of Agriculture estimates that the nation will consume around 22m tons of meal this year, which represents roughly 16% of global consumption. Unsurprisingly, overseas interests are looking for a piece of the action.<\/p>\n
Shandong Province is one of the largest and fastest-growing meat producing regions in China. With eight new grain tanks, Shandong’s Qingdao port now has 16 grain tanks and has become the largest bulk grain unloading base in the Yellow River valley, capable of storing 200,000 tons of grain.<\/p>\n
Regional expansion has not escaped the notice of integrated, global agribusiness and food conglomerate Bunge. Earlier this year, White Plains-based Bunge purchased a controlling interest in an integrated soybean crushing and refining plant in the neighbouring port city of Rizhao, Shandong Province, from Sanwei Group. Bunge said the plant, its first in the country, would link it directly to customers in the expanding soybean meal and oil markets. “The Rizhao plant is a solid first step for Bunge in China, ” says regional general manager – Asia, Christopher White. “By linking the plant to Bunge’s global oilseed origination, risk management and logistics systems, we will provide feed and meat customers in the Shandong region with a reliable supply of high quality feed ingredients that will enable them to expand their businesses.”<\/p>\n
The plant, built in 2003, has daily crushing and refining capacities of 2,300 and 400 tons, respectively and is located adjacent to soybean discharge facilities in the port of Rizhao.<\/p>\n
Bunge said it would supply the plant from its soybean origination network in North and South America.<\/p>\n
For Bunge, though, this is just one strand in its bid to expand global grain port storage and processing capability. According to corporate spokesman, Stewart Lindsay: “In general, the overall goal of our logistics investments is to help build an efficient, integrated chain of assets that stretch from origin markets to destination customers around the world. This improves efficiency and flexibility which in turn benefit Bunge and our customers.”<\/p>\n
At the other end of the supply chain, Bunge opened its new Ramallo in Buenos Aires in September. The facility is set to become one of Bunge’s most strategically important export terminals according to the company, focusing specifically on soy products. The complex includes a ship berth with a loading capacity of 3,000 tons per hour, 200,000 tons of storage capacity and parking for 1,000 trucks. Plans call for expansion of these facilities in the near term.<\/p>\n
The construction of the terminal, opened in September, represents the first stage of a US$300m project which includes the construction of a plant for processing flour and soy oil.<\/p>\n
A BALTIC FIRST Last month also saw the opening of the 200,000 tons a year plus capacity Dan Store terminal at the Latvian port of Liepaja – a joint venture between Bunge and Danish firms Svane & Gjording and Scanmills.<\/p>\n
The terminal is the only dual-purpose panamax port in the Baltic States and includes two flat meal storage warehouses, three externally-linked rail lines and a load capacity of up to 5,000 tons per day. Six steel bins, with capacity for 25,000 tons of grain are augmented by two flat meal storage warehouses with total capacity of 38,000 tons, while three rail lines link the berth to regional railways.<\/p>\n
Bunge says the new terminal will benefit regional customers in the growing feed formulation and animal production industries by enabling them to import high quality feed from the Americas. It will also serve as an export terminal for grains and oilseeds from the Baltic States, Kazakhstan, Russia and Ukraine.<\/p>\n
Bunge has also been reaching out to develop its Russian grain business directly. It plans to establish a chain of 12 elevators with the first acquisition already made. The company has bought the Kholmsky flourmill, Krasnodar Territory, which has an estimated capacity of about 130,000 tons of grain.<\/p>\n
Last summer it also bought a grain terminal in Rostov-on-Don for US$10m; and rights for sale of vegetable oil under the Ideal brand in Russia and CIS, from the Argentinean company Molinos for US$20m.<\/p>\n
And at the beginning of 2005, the grain giant announced its intention to invest US$130m in construction of an oil extraction plant in the Voronezh Region. Bunge plans to buy and\/or build 10-12 elevators over the next five years to provide warehousing facilities for the future oil extraction plant in the Voronezh Region, as well as for storage and transhipment of grain. Elevators will be located in the Stavropol and Krasnodar territories, Rostov, Volgograd, Voronezh, Saratov and Samara regions.<\/p>\n
Other mutli-national players are buying up elevators in Russia too.<\/p>\n
Last month, Cargill and Rusagro bought two grain elevators in the Krasnodar region and a river grain import\/export terminal in Rostov from Rusagro. The grain terminal is a brand new facility, situated on the River Don. “This acquisition further strengthens Cargill’s commitment to the Krasnodar region and marks our entry into the dynamic Rostov region, ” says Alexander Keane, head of Cargill’s grain and oilseeds trading business in Russia. “It will allow us to better serve our customers in Russia.” With over US$300m invested in the Russian agricultural and food processing sectors, Cargill is one of the leading foreign investors in Russia.<\/p>\n
In October meanwhile, investment group Russian Funds closed a deal for sale of the Gulkevichsky flour mill (Krasnodar Territory) and Dvoinyansky elevator (Rostov Region) to International Grain Corporation (IGC), the Russian subsidiary of Glencore, for just under US$10m. IGC is expected to buy one elevator more in the south of Russia in the near term. The deal had followed hard on the heels of another through which IGC closed the deal to acquire the Peschanokopsky flour mill (PKKHP). PKKHP offers a storage capacity of 50,000 tons of grain. After purchase of these assets IGC will increase its grain storage and transhipment capacity from 277,000 to 592,000 tons.<\/p>\n","protected":false},"excerpt":{"rendered":"
Overseas investors vie to enter Chinas fast-expanding grains storage market and are the force behind consolidation in the Former Soviet Union. John Balfe reports.<\/p>\n","protected":false},"author":8,"featured_media":1157,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26],"tags":[],"sponsor":[],"class_list":["post-1156","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-container-cargo-handling"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/1156","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/comments?post=1156"}],"version-history":[{"count":1,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/1156\/revisions"}],"predecessor-version":[{"id":1158,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/1156\/revisions\/1158"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/media\/1157"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/media?parent=1156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/categories?post=1156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/tags?post=1156"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/sponsor?post=1156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}