Construction, sugar business progresses at Bunge
May 20, 2010
by Eric Schroeder
NEW YORK — Enhancing its position in the oilseed value chain, building a presence in grains, and increasing its sugar and bioenergy platforms are center stage at Bunge Ltd., said Jackie Fouse, chief financial officer.
Speaking at the BMO Capital Markets Agriculture, Protein and Fertilizer Conference held May 19 in New York, Ms. Fouse provided an update on the construction of an export grain terminal in Washington state. The terminal, the first for Bunge in the region, is expected to be a “nice addition” to the company’s North American asset base, she said.
“It’s there to serve flows from the Pacific Northwest in the U.S. to Asia,” Ms. Fouse said. “So, capitalizing on that expected demand for product in Asia and the development, continued development of those trade flows from North America to Asia. So this is an asset that we’re very excited about.”
Ms. Fouse said Bunge also continues to enhance its international reach through the construction of a soy crush facility at the port of Phu My, Vietnam.
“It will be a state-of-the-art facility,” she said. “Again, as Vietnam has developed as a country and the market demand there for both meal and oil, it now makes sense for us to have that crushing facility there in that country.”
Another area of Bunge’s business attracting attention is sugar and bioenergy operations. With the closing of the Moema acquisition in mid-February, Bunge now has eight mills in Brazil, and the company is counting on Brazil to be the anchor country for the segment.
“Brazil is uniquely positioned as the low-cost global producer for raw sugar and supplies about 50% of the global sugar trade,” Ms. Fouse said. “So we like Brazil as the anchor country within our sugar platform. In addition to raw sugar, when we look at the data for sugar-based ethanol, what you see here is just the domestic demand in Brazil for ethanol. It has been growing at a very rapid pace … expected to grow at an 8% average annual rate from 2009 to 2015.”
Ms. Fouse said part of the reason for the rapid growth of ethanol demand in Brazil is the growth in the flex fuel car fleet in the country.
“Something on the order of 90% of sales of vehicles now are flex fuel vehicles and … as the gasoline powered vehicle numbers are coming down, the flex fuel numbers are going up in Brazil,” she said. “And that is driving very strong domestic demand for ethanol.”