Agrifood company Bunge has announced that it has agreed to purchase a controlling interest in an integrated soybean crushing and refining plant in the port city of Rizhao, Shandong Province, China, from Sanwei Group Ltd.

The plant, Bunge's first in the country, will link Bunge directly to customers in the expanding soybean meal and oil markets in the Shandong region. Sanwei will retain a minority interest in the newly created joint venture company.

Driven by rapid commercialization of its meat and feed industries, China's consumption of soybean meal has risen by an average annual rate of 11% since 1998. The USDA estimates that the nation will consume around 22 million tonnes this year, which represents roughly 16% of global consumption. Shandong province is one of the largest and fastest-growing meat producing regions in China and it also has one of the highest levels of per capita vegetable oil consumption of any province in the nation.

"The Rizhao plant is a solid first step for Bunge in China," said Christopher White, regional general manager - Asia. "It is an efficient facility that is well-located in a valuable and expanding market. By linking the plant to Bunge's global oilseed origination, risk management and logistics systems, we will provide feed and meat customers in the Shandong region with a reliable supply of high quality feed ingredients that will enable them to expand their businesses."

The plant, which was constructed in 2003, has daily crushing and refining capacities of 2,300 and 400 tonnes respectively. It is located adjacent to soybean discharge facilities in the port of Rizhao. Bunge will supply the plant from its soybean origination network in North and South America.

"Bunge's strategic intent is to expand its integrated business into China as we build our execution competencies and as good opportunities arise," said White. "In the meantime, we look forward to developing our business in Shandong and to continuing the good cooperation we have established with Sanwei, the Rizhao Port, Rizhao City, and Shandong Province."

The purchase is expected to close in September of this year.