Global commodity giant Louis Dreyfus Company (LDC) is partnering with China’s Donlink Group to develop aquaculture and plant-based bioenergy production at a new food industry park near the southern port of Nansha.
The Nansha project would involve an investment of CNY7bn (US$1 billion) and was expected to lead to annual production worth some CNY22bn, Global AgInvesting reported on 4 February.
The joint venture would also involve feed protein processing and grain trading activities, LDC said.
Donlink’s operations include grain trading, international shipping and logistics, potash mining, potash fertiliser production and marketing.
LDC is one of the ‘ABCD’ quartet of companies – alongside ADM, Bunge and Cargill – that dominates world agricultural commodity trading including edible oils and oilseeds.
Global AgInvesting said tightening margins and volatile markets had exerted pressure on these firms to restructure and shift their focus to more downstream or higher margin activities.
LDC launched a cost cutting programme late last year following a drop in profit it blamed on international trade tensions and African swine fever virus cutting demand for soyabean and grain feed in China.
In addition, for the first time in its 170-year history, LDC is also prepared to sell an interest to an external investor.
Margarita Louis-Dreyfus, who consolidated control of the company through her Akira family trust and now owns 96% of the holding company, told Reuters at the end of January that she would consider selling a large, non-controlling stake in the company to a high quality investor that could bring, not only capital, but value to LDC.