Photo courtesy of LDC/David Hundley.
In its North American operations LDC completed its Mississippi River logistic network for grain and oilseeds. This included the completion of its 80,000-bushel truck-to-barge loading facility in West Memphis, Arkansas, U.S. The terminal is currently operational storing and shipping corn and soybeans along with other ag products grown in the region.
In an attempt to protect from market volatility in its North Latin America region, LDC said it secured platform origination in advance to guarantee supply to customers.
“This was particularly key for the Grains, Oilseeds and Fertilizers and Inputs platforms, working together to ensure the health of our value chain,” LDC said.
In 2016, the company continued with long-term investments in the region despite short-term volatility.
LDC continues the project in Pará State in Brazil to implement a sustainable logistics solution. Currently the company is working to establish the best approach to building a transshipment terminal on the Tapajós River, in the Santarenzinho area. A fleet of barges and pushers is now under construction in preparations for operations.
In addition to the joint bid LDC won in 2015, the company signed a lease contract to operate the solid bulk terminal at the Port of Santos in São Paulo, Brazil, for 25 years. A rail network connects this port to southern and eastern Brazil and within four years, LDC expects the new terminal to export 4 million tons of corn and soybean annually, “securing our long-term origination capability.”
In the South and West Latin America region LDC focused on improving its processing and logistics.
The company concluded a long-term lease agreement on a grains elevator in Portela, Argentina, and opened its newly-expanded port terminal in Bahía Blanca and the program of improving its loading capacity at its Timbues facility.
“We remain very well positioned to capture opportunities in Argentina with our research capabilities, inland elevator network and port terminal capacity,” the company said. “However, we will be investing further to handle the expected 25% to 30% growth in production in 2021.”
Photo courtesy of LDC.
The distribution of Ukrainian corn and Russian wheat into Egypt is one of the ways LDC began integrating its operations in the Europe, Middle East & Africa region (EMEA). At origin, LDC’s warehouse network allows it to originate efficiently from the producer. By operating in local ports in the region and chartering vessels via its freight platform, LDC is able to import under its own name in Egypt. Once at the destination, LDC monitors control price and counterparty risk, which enables LDC to distribute corn and wheat to customers in Egypt.
Also in the EMEA region, LDC commissioned its grain mill in Johannesburg, South Africa, and increased its oilseeds crushing capacity by over 70% in Lichtenburg with the Epko joint venture. In Russia, the company finished construction on its port terminal in Azov region in November 2016 and final operating permissions are expected in 2017. LDC expects the newly built terminal to help it further expand into the domestic oilseeds market in Turkey.
Net income at LDC for the year ended Dec. 31, 2016, was $306 million, up 45% from $211 million in 2015.
Net sales fell to $49.838 billion, down from $55.733 billion compared to the prior year. LDC said net sales fell slightly for the Merchandising segment due to lower average prices, while in the Value Chain segment, marginally reduced activity levels and lower average selling prices on Oilseeds and Grains affected net sales.
Volumes shipped to destination of 81 million tons, remained stable. LDC’s grain and oilseeds platform benefited from the internal services of the company’s freight platform.