Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

Brazil grains company Amaggi raises capex sevenfold, boosts capacity

Stock Markets Aug 26, 2021 09:46AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Judiney Carvalho de Souza, CEO of Amaggi, is seen in this handout photo taken in Cuiaba, state of Mato Grosso, Brazil in October 2019. Courtesy of Amaggi/Handout via REUTERS THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT.
 
BG
+2.09%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

(Reuters) - Brazilian agricultural conglomerate Amaggi is boosting capital spending sevenfold this year to 2.3 billion reais ($436 million) as it aggressively expands into parts of the supply chain in a bid to fend off foreign rivals like Cofco and Cargill.

CEO Judiney Carvalho told Reuters demand for Brazilian agriculture commodities, fueled mainly by China, supports its plan to grow through acquisitions and greenfield projects.

Amaggi's expansion comes amid a wider boom in Brazil's grain belt driven by high prices.

Amaggi, which plants, processes and trades in grains, is building two new fertilizer plants, one in Mato Grosso, where it is headquartered, and a second in the northern state of Rondonia, Carvalho said in a rare interview.

Closely held Amaggi has previously said it is also building its first biodiesel facility in Mato Grosso.

China's Cofco and U.S. firms like ADM, Bunge (NYSE:BG) and Cargill own competing soy processing plants in the state, and Amaggi's investment is likely to fuel even more competition to originate and crush oilseeds there.

"We are in all phases of the supply chain," Carvalho said, citing relationships with some 6,000 farmers as well as production from its own farms. "Our structure makes our decision-making process faster than that of the ABDC's," he said, referring to global rivals.

Amaggi's investment will raise its grain storage capacity as well as expand its electricity generating business, which will have total installed capacity of 90MW by 2023, enough to supply a city of 260,000 inhabitants.

Carvalho, who has worked at the company for more than three decades, declined to say how much Amaggi paid for Grupo O Telhar Agro, a deal announced in March that will boost the group's farmable area by a fifth to nearly 350,000 hectares (864,868 acres). But he confirmed the move is expected to raise Amaggi's oilseeds and fiber output by over a third from the current 1.1 million tonnes.

Amaggi also has interests in banking and a non-GMO soymeal plant in Norway.

In 2020, Amaggi traded in some 14 million tonnes of grains globally, an amount seen hitting 17.5 million tonnes this year, Carvalho said. According to shipping data, it was Brazil's largest corn and No. 5 soy exporter through July.

Carvalho credited a "solid governance structure" that excludes any members of the billionaire Maggi family that controls the company with helping it to execute its bold expansion and navigate volatility during the pandemic, when some traders faced financing risk.

"The pandemic turned the market upside down," Carvalho said. "If your financial partners are afraid of Brazil or of your businesses, this can be a serious problem."

($1 = 5.2726 reais)

Brazil grains company Amaggi raises capex sevenfold, boosts capacity
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email