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Cargill investing $112m in China to expand corn processing capacity

Cargill investing $112m in China to expand corn processing capacity

Company says move helps support local corn processing industry and boosts local economy.

Cargill announced this week that it will invest $112 million to expand the capacity of its corn processing facility in Songyuan in China's Jilin province as part of its joint initiative with the government of Songyuan to build the Sino-US Cargill Biotech Industrial Park, featuring the Cargill Food Safety & Technology Center. Cargill will continue to invest in the park in the coming years, and the latest move is expected to help boost the local economy and strengthen the local corn processing industry.

“Cargill has made significant investments in Songyuan, which is welcomed by us,” said Wang Zilian, mayor of the Songyuan municipal government. “I believe the new investment and projects will help boost the prosperity of local farmers and also benefit the growth of the local corn processing industry.”

The park, which occupies 3.71 million sq. m, is designed to facilitate both corn processing and trading, with a processing capability of up to 2 million tons per year by 2020. Future warehouses will be built for commodities such as corn and starches.

As one of the most important facilities in the park, the Cargill Food Safety & Technology Center will focus on testing, research and training in the area of food safety as well as process improvement and product development for the corn processing and food ingredients industries.

“China is crucial market with amazing vitality. We will continue to work as partners with China to build sustainable agriculture and invest in rural areas,” Cargill chairman and chief executive officer Dave MacLennan said at the foundation-laying ceremony for the Cargill Food Safety & Technology Center.

AIPU Food Industry Co. Ltd. is one of the companies that has established its presence in the park. As a key partner of Cargill in China, AIPU is constructing a 150,000-ton project to produce caramel pigment, leveraging products and services from Cargill and the park.

“AIPU is happy to put some of our key projects here in the park. The park provides us with resources, infrastructure and value-added services that we need. Currently, our project is proceeding smoothly,” AIPU CEO Michael Wei said. “In the future, we will look to further our collaboration with Cargill in deep corn processing and providing more high-quality products for our customers and consumers.”

Jerry Liu, president of Cargill China, said, “The park welcomes companies along the corn processing and trading value chain. They will enjoy convenient services and easy access to resources at the park, including a supply chain to connect their products with domestic and overseas market. We are grateful for the ongoing support of Jilin and Songyuan governments as we continue to invest in this region, working with the government, partners and farmers to meet customer demands.”

Ongoing commitments to China

The Jilin province initiative further demonstrates Cargill’s growing commitment to long-term investments in China. Recently, the company announced a $40 million investment in Yichun in Jiangxi province to build an animal nutrition plant with an annual production capacity of 120,000 tons of premix and 60,000 tons per year of specialty animal feed.

In February 2019, Cargill also opened its first beauty care office in Shanghai, China, supporting the Asia Pacific region. The facility includes an application laboratory to deliver nature-derived, label-friendly and highly functional ingredients to Asian personal care markets.

Cargill said these early-2019 investments build on hundreds of millions the company invested in 2018 to expand the capacity of its starches and sweeteners, animal protein and agricultural supply chain businesses in China.

Since it started investments in mainland China in the 1980s, Cargill has invested around $7.5 billion.

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