Chinese group to invest 4 billion reals in the state of Bahia, Brazil

22 March 2011

Salvador, Brazil, 22 March – Chinese group Chongqing Grain is due to launch an agri-industrial project expected to cost 4 billion reals (US$2.4 billion) in the state of Bahia, Brazil, the state’s secretary for Agriculture said in Salvador.

Speaking to financial newspaper Valor Económico, secretary Eduardo Salles said he had met last Friday in Salvador with the chairman of the group, Hu Junlie, who told him of the plan, which includes construction of an industrial complex for processing soy in Barreiras, a fertiliser processing unit and a grain storage and logistics system.

Work for the first phase of the project, which involves construction of the soy crusher, is expected to begin in May, once the protocol of intentions is signed during the meeting of BRIC (Brazil, India, Russia and China) countries, due to take place in April, in China.

“It will be an important moment for Bahia, and Governor Jaques Wagner will sign the protocol in Beijing, which will allow the Chinese group to get access to the State’s tax incentive programme as well as to import the necessary equipment,” Salles told Valor Económico.

The factory will be built on a 100-hectare plot donated by the city hall and will have capacity to process half of the State’s soy production.

When it is operating at full capacity it will be able to crush 1.5 million tons of soy, as compared to a harvest of 3.1 million tons in Bahia, according o estimates from Companhia Nacional de Abastecimento (Conab) and will also have capacity to refine 300,000 tons of oil and store 400,000 tons of soy.

The State’s agriculture secretary also said that the Chinese group’s decision to set up an industrial complex in the region started to change the idea that China was only interested in acquiring land for production.

“On all the visits we made to China, they always talked about the importance that the country’s government placed on a regular supply. And our response was that they should also set up the industry and had their own production to ensure the factory’s autonomy,” said Salles. (macauhub)