ST. LOUIS – Bunge North America will idle production at its Marion, Ohio, soybean processing facility until margins improve.
The current weak margin environment has been caused by declining demand for domestic soybean meal in the short term and a smaller-than-anticipated U.S. soybean crop harvested last fall.
“This is the first time since 1989 that domestic consumption of soybean meal is running below the previous year,” said John E. Klein, Bunge CEO.
He said lower demand from the pork and poultry sectors is also triggering the production cutback.
S. America moving in. Klein also pointed a finger at growing South American bean harvests.
“While world meal demand continues to grow, record soybean crops in South America have reduced the demand for U.S. meal exports.”
Net income up. The day after making the Marion plant announcement, Bunge Ltd. – the parent company – reported record first quarter net income.
Bunge Limited reported record first quarter 2003 net income of $40 million, or 40 cents per share, compared to net income of $13 million, or 15 cents per share, in the same quarter of 2002.
For the first quarter of 2003, compared to the same period last year, volumes grew 57 percent to 22.8 million metric tons.
Gross profit increased 46 percent to $268 million and income from operations rose 74 percent to $118 million.
Increases in sales volumes and margins in the South American agribusiness operations more than offset lower agribusiness results in North America.
Sales of fertilizer products increased, driven by planting for a large second crop.
Market ‘reality.’ “We are actively adjusting our capacity to the reality of the North American market,” said Alberto Weisser, Bunge’s chairman and chief executive officer.
In addition to the idling of the oilseed processing facility in Marion, Ohio, the company previously announced idling of the facility at Cairo, Ill.
“If conditions do not improve, we may reduce capacity further.”
About the company. With headquarters in St. Louis, Mo., Bunge North America and its subsidiaries operate grain elevators, grain and oilseed processing plants, edible oil refineries and food processing facilities in the United States, Canada and Mexico.
Bunge Limited, headquartered in White Plains, N.Y., is the largest processor of soybeans in the Americas, the world’s leading oilseed processing company, the largest producer and supplier of fertilizers to farmers in South America and the world’s leading seller of bottled vegetable oils to consumers.
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