The Brazilian economy is in the midst of a period of rapid growth, with rising GDP and increasing investment from developed economies. Levels of disposable income have also risen for many Brazilians, leading to increased demand for food and beverage products and investment opportunities for multinationals.
Cargill’s new plant is expected to cost around R$350m (US$210m) and add 30 percent to the company’s corn processing capacity in South America, the company said. The location of the new plant is still under consideration, and a decision about where the plant will be located is expected in the first quarter of this year, with operation due to begin in 2013.
Leader of the company’s South America starches and sweeteners business Gonzalo Petschen said: “The partnership with our customers and rising domestic demand were key aspects that drove our investment. Cargill’s global leadership team sees with great optimism the growth of business in Brazil.”
Cargill added that the new plant may also have a line devoted to other corn-based food and industrial ingredients using its proprietary technologies, some of which it claims previously have not been available on the Brazilian market. However, the company remains tight-lipped about what these other ingredients may be.
"Discussions are at an advanced stage, and we hope to have these innovations available for our customers soon," Petschen said.
Cargill has made a number of investments in Brazil in the past year. It completed 70 percent expansion of the capacity of its starches and sweeteners plant in Uberlandia, Minas Gerais in March 2010, and also agreed to buy Unilever’s Brazilian tomato sauce and paste business in September for about R$600m (US$360m).
The company has a number of other facilities in Brazil, in Mairinque (São Paulo State), São José do Rio Pardo (São Paulo State) and Itumbiara (Goiás State), which are operated by Cargill Foods Brazil. The subsidiary owns a number of important olive oil and sauce brands in that market.