Expanding processing capacity

by Teresa Acklin
Share This:

Argentina's oilseed processing capacity expected to increase by more than 30% in next few years.

   (Refer to magazine for Argentine soybeans graphic.)

   Argentina's role as a world leader in vegetable oil and meal exports will become more pronounced because of continuing rapid investment in its oilseed crushing physical plant. This increased investment also is likely to decrease the quantity of seeds exported from the region as Argentine crushers, in an effort to run plants closer to full capacity than the current 75%, could end up drawing more seed from neighboring countries, as well as adding value to their own production.

   Currently, Argentine plants have the ability to process about 21.5 million tonnes per year.

   Industry consultants estimate that Argentina soon will have 24.5 million tonnes of crushing capacity when currently active construction projects are finished. Additionally, current investment plans, if realized, could result in about 29 million tons of total crushing capacity within two or three years if all proposed new plants and renovations are completed.

   The advance in crushing capacity, if fully realized, would continue an upward trend begun more than 10 years ago. Oilseed crushing capacity in Argentina has undergone dramatic changes, nearly doubling during this period, thereby reflecting both the need to process the country's rapid expansion in seed output and greater domestic returns to the value-added product.

   Recently, multinational corporations have undertaken plans for new or upgraded facilities, especially in the main soybean producing belt around Santa Fe province. This province currently accounts for some 55% of the county's processing, and could reach nearly 65% within several years if all planned projects come to fruition.

   The country's current physical plant is relatively up-to-date and efficient, with some exceptions. Although some older plants are expected to go off line in the near future, which would moderate the growth in capacity, they represent only a relatively small proportion of the total industry.

   Notwithstanding the fact that Argentine oilseed production is on a general upward trend, crushing capacity is expected to remain above domestic output, resulting in the need for seed imports to fill the plants. To ensure that the plants run as close to design capacity as possible and take advantage of economies of scale, soybeans will need to be imported, and Argentina may look to its MERCOSUR partners for supplies. Transportation projects under way on the Parana River will make imports less costly. Over time, the growth in capacity is expected push up domestic oilseed production and further increase the competitiveness of the Argentine meal and oil export sector in world markets.

Partners