May 06, 2015

Algerian Company to build Ag Processing Facility in Mato Grosso

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Algerian company Cevital is in negotiations with local officials from the municipality of Vera in central Mato Grosso concerning the construction of a large agricultural processing facility in the municipality. The international director of the multinational company met last week with the mayor of the municipality and the land owner where the complex will be built to start the process of purchasing the land and obtaining the necessary licenses to begin construction.

The municipality of Vera sits aside of Brazil's famous "Soybean Highway" (BR-163) and is neighbor to Sorriso, which is the largest soybean producing municipality in Brazil. The state of Mato Grosso is Brazil's largest soybean and corn producing state responsible for 30% of Brazil's soybean production and 23% of the corn production in Brazil.

In the first phase of the R$ 1.5 billion complex, there will be a soybean crushing plant, a vegetable oil production facility, and a feed mill. By the time the complex is operational, the asphalting of highway BR-163 will be completed all the way to the Amazon River port city of Santarem. Once the highway is complete, soybeans, soybean meal, and corn produced in central Mato Grosso will be transported north to barging operations and export facilities along the Amazon River instead of southward to ports in southern Brazil.

This shorter and cheaper route to export markets is expected to reduce transportation costs by as much as 30% and shorten the time it takes for grain to reach overseas customers by at least a week.

The company already has a presence in the municipality in the form of a grain elevator where they receive soybeans and corn produced in the region. The company expects that within 24 months the first facilities of the complex will be operational.