The agreement, effective from September 1st, is set to
benefit both parties, with Bunge providing commercial and
administrative support to the processing operations - lending
Minnesota Soybean processors the benefit of its experience within
the meal and oil industries.
"While we have strong relationships with our local farmers, we
will look to Bunge to expand our markets since the company has
extensive experience marketing meal and oil both domestically and
for export," said Bruce Hill, president of Minnesota Soybean
Processors. "We will also be able to tap into Bunge's
operational expertise as needed." However,
by making use of the soybean processing facility in Minnesota,
Bunge is strategically broadening its company profile in a
relatively untapped area.
"This service agreement with Minnesota Soybean Processors gives
Bunge access to additional meal and oil supplies in an area of the
country where we don't currently have a presence," said Greg
Bechtel, general manager of Bunge Oilseed Processing.
Teaming up with soybean processors is not a new business move by
the company, following the recent announcement of a joint venture
to construct a new soybean processing plant in China.
Last month Bunge announced a partnership with Sinograin, the
Chinese state-owned grain company to build and operate the new
facility in Dongguan, Guangdong Province. The venture is still
subject to government approval.
Similar to the move into new areas of the US, the new Chinese
facility is the company's first in southern China and fourth in the
nation - increasing its aim for global awareness.
The facility will have a daily processing capacity of 4000mt of
soybeans, and will be connected directly to discharge facilities at
Dongguan port via Sinograin's existing warehouses and conveyor
It will produce soybean meal for the livestock production industry
in Guangdong and soybean oil for nearby urban markets, said
Construction of the plant, which will be located between Guangzhou
and Hong Kong, is expected to finish in late 2008. Bunge will hold
a 65 percent interest in the plant.
In April this year, Bunge announced another joint venture in the
Chinese soy market with the Thai-based Charoen Pokphand Group. The
processing giant said that the agreement will grant it a majority
interest in the running of a third soybean processing plant within
the country, aided by Charoen's Chinese subsidiary, Chia Tai.
The recent business developments follows the company's recently
reported solid growth in its second quarter and half year
performance, indicating that the firm could be getting back on
track after a difficult period.
The company announced a 65 percent increase in overall net sales
for the quarter ended June 300 2007 to $9.9bn up from $6bn a year
earlier. Net income shot up 460 percent to $168m compared to
$30 last year.
According to Bunge's chairman and chief executive officer Alberto
Weisser, the strong second quarter performance was driven by a
"good performance" in the firm's agribusiness, and
"outstanding" results in its fertilizer operations.
"While futures prices for soybeans and grains have been
volatile, industry fundamentals are solid," he said.