Louis Dreyfus Co., one of the world’s biggest agricultural traders, said it’s building a soybean processing plant in Ohio to boost production of the vegetable oil that’s been increasingly in demand both for cooking and fuel.
(Bloomberg) — Louis Dreyfus Co., one of the world’s biggest agricultural traders, said it’s building a soybean processing plant in Ohio to boost production of the vegetable oil that’s been increasingly in demand both for cooking and fuel.
Construction of the plant in Upper Sandusky is set to begin next year, with an annual processing capacity of 1.5 million metric tons of soybeans, according to a Friday statement from the company.
While Louis Dreyfus didn’t disclose the size of the investment, a separate statement on Friday from the Regional Growth Partnership pegged it at $500 million for the plant that’s expected to bring more than 100 jobs to Ohio.
Soybean oil is one of the so-called feedstocks that can be used to make the renewable diesel biofuel that’s chemically equivalent to petroleum-based fuel. Agriculture companies in the US have been shifting to domestic processing to meet the new biofuel demand even as that leaves fewer beans for export.
Read More: The World Is Running Short of Cooking Oil to Feed a Biofuel Boom
With the biofuel often touted as the best way to cut emissions from hard-to-electrify heavy road transportation, investment has been surging. Still, some companies have been slowing plans amid increased competition. Earlier this year, Cargill Inc. suspended a project to build a new processor in Missouri.
Louis Dreyfus’ plan also reflects a trend among major commodity houses. Flush with cash earned trading last year’s extreme market volatility, the firms are spending big on assets to help lock in profits for the future. Despite being down 14% at $568 million, Louis Dreyfus’ profits in the first half of this year were still higher than most of the company’s annual earnings historically.
Operations at the new Ohio plant will include vegetable-oil refining and lecithin production, as well as packaging capabilities.
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