November 19, 2012 / 8:41 PM / in 5 years

Noble plans soy-crushing plant in Paraguay - industry group

* Paraguay is world’s fourth-biggest soy supplier

* Several crushing plants in the pipeline

* Industry group sees risk from renewed Argentine demand

By Daniela Desantis

BUENOS AIRES, Nov 19 (Reuters) - International grains exporter Noble Group Ltd plans to build a soy-crushing plant in Paraguay, the world’s No. 4 exporter of the oilseed, an industry group in the South American country said.

Paraguay, which currently exports most of its soy as raw beans, could crush up to 4 million tonnes in 2013, after Archer Daniels Midland, Bunge and Louis Dreyfus open factories.

ADM’s plant is due to start operating this week at the river port of Villeta, close to the landlocked nation’s capital, Asuncion, the CAPPRO industry chamber said.

Noble has bought a 60-hectare site in Villeta and will soon start operating a terminal that required an investment of $16 million. A larger investment in a crushing plant is also planned, CAPPRO president Oscar Sosa told Reuters late on Friday.

“That’s why they’ve joined the camera, because they’ve got a future investment project linked to industrialization. They haven’t spoken about the year but they’ve got a project. They bought a large plot and they’re installing the port,” Sosa said.

“I imagine they’re going to keep an eye on what’s going on, how the country’s production pans out with the new plans and how the market behaves,” he added.

The new plants should boost the country’s daily crushing capacity to 13.8 tonnes from 5.7 tonnes, Sosa said.

“We should be able to process 4.5 million tonnes of soy per year, between 55 percent and 60 percent of production compared with 22 percent today,” he said.

Paraguay is expected to harvest a record soybean crop this season, with the government projecting 8.4 million tonnes and private producers estimating 8.0 million, both way up from last year’s drought-hit 4.3 million tonnes.

Investor optimism in Paraguay compares with the wariness of grains exporters over a decision by neighboring Argentina to allow imports of Paraguayan beans.

A poor harvest in Argentina, the world’s No. 3 soy supplier, has left plants there operating below normal capacity, persuading authorities to allow imports from Paraguay after a hiatus of several years.

CAPPRO is urging local officials to impose measures that encourage crushing on Paraguayan soil to help limit outflows of beans to Argentina that could leave new plants low on supplies.

“We’re concerned, we’re talking to authorities, trying to make people realize we can’t have a tax distortion making us less competitive just as we invest in processing,” Sosa said.

“There is already demand from Argentina to resolve the problem of their idle plants and if we don’t do anything we’re going to have to sit and watch them absorbing out produce.”

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