Cargill collaborates with New Hope on soybean facility in China

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Cargill is set to open in an oilseeds facility as part of a joint venture with China's New Hope.

Cargill confirmed the joint venture to FeedNavigator, Wednesday. The new soy crushing facility reportedly will be able to process about 5,000 tons daily when up to speed.

“Cargill and New Hope have jointly invested in an oilseeds processing facility in Huanghua of Hebei Province,” said Rita Aspen, regional communications director for Cargill. “And, [it] is expected to be fully operational in the first half of 2017.”

The Minnesota-based agri-giant currently has four oilseed crush plants in China, in both the Guangdong and Jiangsu provinces, the company said. It also imports and crushes soybeans to produce both soybean meal and oil in China.     

Reportedly, New Hope and provisional state companies will own 51% of the project, and Cargill will cover the remaining 49%.

New Hope is China's leading feed producer, with other business interests also. Its annual sales are said to hit around 90 billion yuan ($13.83 billion).

Soybean imports and production

In marketing year 2016/17, China’s soybean imports were expected to reach a record 86m metric tons, said the US Department of Agriculture (USDA) -  an increase from the 83.2m metric tons the country imported the pervious marketing year.

However, there is recovering domestic soybean production in China, noted the USDA.

It remains unclear what effect on soybean meal use the decision to reduce imports of dried distiller grains will have, the department said.

The country’s modernization plan will also see a cultivation shift from corn to soybeans for feed, said the USDA. 

In the plan, about 4.67m hectares or 12.4% of the current corn production area would be transferred to the growth of other crops, the department said. Land used for growing soybeans is anticipated to increase by about 2.9m hectares to 9.4m hectares total – a growth of 44%.

Sales of European crush facilities to Bunge 

Cargill also announced the completion of the sale of soybean crushing operations to Bunge last week.

That move, first announced in August, included the sale of a soybean and rapeseed crush and oil refinery along with the related soybean discharging operation and processing plant, said Cargill. That facility is located in the port of Amsterdam, Netherlands.

It also sold a soybean and rapeseed crush facility in Brest, France to Bunge. 

Last year, a Cargill spokesperson told us that the decision to sell the facilities was a strategic choice linked to its “asset footprint.”

“We remain committed to serving refined oil customers via its network of facilities and continues to make significant investments in the region,” the spokesperson said. “We have, in recent years, expanded our crush footprint in Russia and in Egypt, as well as securing joint venture port terminal facilities in Russia, Romania and Ukraine. We also have an extensive network of plants processing soft seeds (sunflower, rapeseed) across Europe and we continue to focus on serving our customers and growing our longer-term business in this sector.” 

Cargill is set to continue operating two other soybean processing facilities in Western Europe, the company said. Those plants are located in the port of Barcelona in Spain, and in Liverpool in the UK.

The company is also retaining the infrastructure in those countries to continue distributing protein meal to current customers, it reported.

Additionally, Cargill is retaining its European network of processing plants and oil refineries working with other oilseeds or tropical oils. 

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