Bunge putting money behind ports
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NEW YORK — With Bunge Ltd.’s portion of the global grain trade increasing, the company is investing significantly in the grain business, particularly in ports around the world, said Drew Burke, chief financial officer.
In a May 15 presentation at the BMO Farm to Market Conference in New York, Mr. Burke said ports are often the bottleneck in origination.
“To be very effective in the grain business we feel you need to have ports, so you can control your own destiny and make sure you have access to get it out and being most cost efficient,” he said.
In the United States, Bunge has invested in a major port in Longview, Wash. It is part of EGT Development, L.L.C., a joint venture formed in 2009 with ITOCHU and STX Pan Ocean. Bunge owns just over 50% of the joint venture. The port has annual capacity of 8 million tons.
“For the first time, in the fourth quarter of ’13, it will probably be able to run at capacity for a period of time, assuming we do get large North American crops,” Mr. Burke said of the port in Longview.
Elsewhere, a port facility acquired in the Ukraine in February 2011 “has been very successful since we acquired it,” Mr. Burke said.
“It has a 3-million-ton capacity and gives us the ability to originate in the Black Sea region and export through our own terminals instead of have to relying on public terminals,” he said.
Australia stands out as a country where Bunge “should be a bigger player,” Mr. Burke acknowledged.
“We’ve been a player in it through using public ports for a long time, but now we’ve decided that to be competitive and efficient for the long term we do need our own ports in Australia,” he said. “We’ve announced a project in Bunbury to have our first port operational. And that should be operational in 2014, and we would look to expand on that afterwards.”