Cargill Inc has agreed to acquire soybean processor and refiner Owensboro Grain Company in a deal that would expand its oilseed crush capacity to meet rising demand for food, feed and biofuel, the agricultural commodities trader said on Monday.
The purchase includes a soybean processing plant and oil refinery on the lower Ohio River in Owensboro, Kentucky. The facility can load and unload trucks, railcars and river barges bound for U.S. Gulf Coast fuel refineries and export terminals.
Privately held Owensboro Grain has the capacity to process 39.5 million bushels of soybeans annually into vegetable oil and soybean meal for livestock and poultry feed.
The acquisition comes amid surging demand for vegetable oils to produce renewable diesel, a lower-carbon fuel that is chemically identical to petroleum-based diesel, and increasing soybean meal exports.
“This will allow our meal to be more efficiently exported,” Helen Cornell, president and CEO of Owensboro Grain, said in an interview.
“Additionally, we recently invested in the ability to load out soybean oil onto barges on the river to supply the Gulf and those refiners making renewable diesel,” she said.
Renewable diesel production capacity is slated to grow to more than 5 billion gallons a year by 2024, from less than 1 billion in 2020, according to projections from the U.S. Energy Information Administration. Soybean oil is expected to be the industry’s largest feedstock.
The transaction is due to close in early 2023 after regulatory approvals. The companies did not disclose the terms of the deal.
Source: Reuters.com