Agricultural processor Bunge Ltd has started production at its $100 million soybean crushing plant in southern Vietnam, the largest of its kind in Vietnam.
The plant located in the southern province of Ba Ria-Vung Tau is designed to crush 1 million tonnes of soybean a year or more than 3,000 tonnes daily to turn out 600 tonnes of crude-degummed soybean oil and 2,500 tonnes of soymeal.
The plant's products will be sold in Vietnam and exported to Asian countries, Bunge said. Purchases made in the Vietnamese dong will help reduce the risk of exchange rate fluctuation, which happened in the latest case in February this year when Vietnam devalued its domestic currency by 8.5% against the dollar.
"The plant will reduce the financial pressure with exchange rate for Vietnamese buyers, cut the ratio of cargo loss during transportation while the quality of the freshly produced soymeal is higher at delivery," a soymeal trader in Ho Chi Minh City said.
The trader said supply from Bunge Vietnam would also help save time for importers, instead of waiting for a longer shipment time from India or South American nations such as Argentina.
Vietnam spent $1.18 billion to import feed and ingredients for feed production, such as soybean, soymeal, corn and wheat meal, in the first six months of this year, 1% up from the same period in 2010, the Agriculture Ministry said.
India, Argentina, the United States, Thailand and China top the list of feed and feed ingredient exporters to Vietnam so far this year.
India exports around 300,000 tonnes of corn and 700,000-800,000 tonnes of soymeal each year to Vietnam, traders said.
Vietnam is forecast to import between 8.5 million and 9 million tonnes of feed and raw material for feed production this year, up at least 10.4% from 7.7 million tonnes imported in 2010, an industry official said in March.
The import, mainly of soybean, soymeal, corn and wheat, was to ensure the feed industry reaches an annual target output of 12 million tonnes of feed for livestock and poultry and another 2.5 million tonnes of feed for fish, he said.