China’s Chongqing Grain Group (CGG) plans to invest four billion reais ($2.4 billion) in an agricultural complex in Brazil’s northeast, officials in Bahia state said March 21, expanding China’s growing presence in Brazil.
The investment will include a soy crusher, a soy storage terminal and a fertilizer-processing plant, officials said, with construction of the complex expected to begin in May and take about a year.
The deal will be formally signed during a summit in April of the emerging powers known as the BRIC group, which includes Brazil, Russia, India and China and is the result of around two years of negotiations.
As one of the world’s leading commodities exporters, Brazil is trying to increase local transformation of these products to add more value and create more jobs and has been seeking to attract this kind of investment for that purpose.
“We don’t just want to sell (soy). We want to process it. The Chinese are coming to create an industrial pole for soy processing,” said Josalto Alves, spokesman for the agriculture secretariat in Bahia state.
Alves said the investment was especially welcome as the state was lacking in soy-crushing capacity.
China has become a key investor in Brazil’s growing commodities sector as the world’s second-biggest economy seeks new sources of raw materials for its booming industries.
Purchases of large swathes of farming land are no longer an alternative investment option for Chinese or other foreign companies however, since the government imposed restrictions last year on the area of land that foreign firms could buy.