Jan 11, 2009
Los Grobo Focuses Expansion Plans In Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Los Grobo, one of the largest soybean producers in the world, whose roots in Argentina go back nearly a century, is invested heavily in expanding their soybean production in Brazil. During the 2009-10 growing season, the company is expecting to produce 2.5 million tons of soybeans on 265,000 hectares spread amongst four different countries in South America. Their expansion plan call for the production of 4.5 million tons of soybeans during the 2012-13 growing season on 450,000 hectares.
While most of their soybean production is centered in the Humid Pampas region of Argentina, their greatest expansion plans are for the cerrado regions of central Brazil. During the 2009-10 growing season, the company estimates that they will produce 800,000 tons of soybeans on 60,000 hectares in the "Mapito" region where the states of Maranhao, Piaui, and Tocantins converge. Within three years, their plan is to produce 1.4 million tons of soybeans on 150,000 hectares. Currently, 50% of their soybean production is in Argentina and 30% is in Brazil, but within five years, they expect those percentages will be reversed.
According to Gustavo Grobocopatel, a spokesman for the company, there are only two or three more million hectares of land in Argentina that can be brought into soybean production, but Brazil has 30 million hectares of land available for new soybean production. Brazil also offers more opportunities for the company to vertically integrate their operations into financing, supplying inputs, and expanding their processing operations.
The company contracts out much of their soybean production to more than 5,000 local producers, 3,000 of which are in Argentina. The company boasts that the annual renewal rate for their contractors exceeds 90%. The spokesman stresses that the company focuses most of their efforts on storage, processing, commercialization and distribution of the products. The company already loans out more than US$ 100 million annually in the form of production loans to their contract producers.
Soybean production currently accounts for 60% of the company's activities with the reaming 40% involving wheat, corn, and sunflowers. In the case of wheat, the company operates four flower mills in Argentina (two are owned by the company and two are leased) with annual production of 200,000 tons of flower, half of which is exported to Brazil.