May 19, 2017 / 7:00 PM / in 7 months

UPDATE 1-ADM Brazil unit completes $85 mln Santos port investment

(Adds details from news conference on rail infrastructure improvement, quotes from executive, background)

By Ana Mano

SANTOS, Brazil, May 19 (Reuters) - The Brazilian unit of Archer Daniels Midland Co on Friday said it had completed a 33 percent expansion in its Santos port terminal’s export capacity, to 8 million tonnes of grains per year.

The company invested 280 million reais ($85.19 million) in the project, which comes two years after Brazil extended ADM’s license to move grains including soybean and corn at the terminal for 20 years, through 2037.

The investment underscores ADM’s commitment to retaining a leading position in Brazil, whose agricultural heartland is seen as critical to supplying expanding world food markets.

Recent changes in Brazilian port legislation, which extended the duration of operating licenses in a bid to attract private investment, is positive for ADM’s logistics plans, Eduardo Rodrigues, the company’s ports director, said at a news conference.

ADM is currently analyzing a project to improve rail infrastructure around the port area in partnership with other operators, but any decision will depend on how the government applies the new rules, Rodrigues said, referring to a decree published on May 11.

Brazil extended the duration of operators’ first port licenses to 35 years from 25, renewable for another 35 for contracts signed after 1993, such as ADM‘s.

In theory, Rodrigues said, this could give ADM an additional 30 years, until 2067, to operate its Santos grain terminal, depending on how the authorities apply the new regulation.

“For us, it would make sense to increase investments if our license lasts longer,” Rodrigues said. The investment needed to modernize the rail infrastructure around the port terminal would be “sizeable,” he said, declining to elaborate.

With Brazil poised to harvest a bumper soy and corn crop this season, Rodrigues said that ADM expanded capacity of its Barcarena terminal, in the northern Pará state, which is operated as a 50-50 joint venture with Glencore.

Barcarena’s capacity is being raised fourfold, to 6 million tonnes. Works will be completed by June, but Rodrigues declined to comment on the size of the investments.

ADM kicked off activity at Santos in 1997, coinciding with its arrival in Brazil, which the company says is key for its global strategy. It began the Santos port operations after purchasing several crushing plants, grain elevators and silos. ($1 = 3.2868 reais) (Reporting by Ana Mano; Editing by Christian Plumb and Leslie Adler)

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