Vanguarda Seeks First Profit In Shift To Soybeans
by Lucia Kassai and Stephan Nielsen (Bloomberg) Vanguarda Agro SA (VAGR3), the Brazilian farm company that lost 97 percent of its value since going public in 2006, expects to make a profit for the first time this year by producing soybeans and corn after biodiesel projects folded.
Chairman Salo Seibel said Chinese demand for the crops that Vanguarda has been growing since last year will help it turn around five years of losses. The Asian country, which buys about two thirds of the world’s soybean exports to feed poultry and swine, has helped boost prices 43 percent in two years.
“Year after year, China has been increasing purchases from Brazil,” Seibel said in an interview at his Sao Paulo office on May 29. “We’ll feed the world.”
… Sao Paulo-based Vanguarda is planting soybeans, corn and cotton in an area twice the size of Los Angeles after selling three biodiesel plants last year, Seibel said.
… The plan failed because the raw material supplied by small growers was not competitive against soybeans produced in the country’s center-western export-oriented plantations, Chief Executive Officer Bento Moreira said.
As Lula’s program flopped, companies that invested instead in more lucrative biodiesel production from soybeans, such as Sao Paulo-based Granol Industria Comercio e Exportacao SA, thrived. Granol is now the country’s biggest biodiesel supplier, while Vanguarda is out of the market. READ MORE