(Updates with official’s comment in fourth paragraph.)
June 9 (Bloomberg) -- Heilongjian Beidahuang Nongken Group Co., China’s biggest farming company, plans to invest $1.5 billion to develop farms and expand a port in southern Argentina to help guarantee food supplies for the next two decades.
The state-owned Chinese food producer will help finance wine, corn, soybean and vegetable production in 300,000 hectares (741,000 acres) of unused land in the arid Patagonian steppe in Rio Negro province, Maximiliano Bruno, the provincial economy development secretary, said yesterday at a press conference. China won’t buy land in Rio Negro, according to Bruno.
China is boosting investment in natural resources from oil to soybeans as the country seeks energy supplies to power an accelerating economy and food sources to feed a growing population. At the same time, Latin American nations including Argentina and Brazil are looking to limit foreign land acquisitions and boost the value of their commodity exports.
Farmers in Rio Negro “will be kept captive by the Chinese for 20 years” under the terms of the agreement whereby Beidahuang will help build irrigation systems for farms and provide new technologies, Oscar Gomez, Rio Negro’s adviser on the project, said at the press conference in Buenos Aires. Farmers will have to produce and sell to Beidahuang for 20 years whatever products the company wants, Gomez said.
Beidahuang will build a hydraulic power plant and expand San Antonio’s port, where the produce will be shipped to China, provincial secretary Bruno said. China in recent years expanded its regional presence by investing in commodities ranging from Brazilian and Ecuadorean oil to Peruvian copper.
The investments, which may start as soon as this year, will be made over the next five to 10 years, said Gomez. The agreement will last 20 years, he said.
China is the largest buyer of Argentine soybeans, the country’s main agricultural export, as well as soy-oil. China became Argentina’s third-largest foreign investor in 2010 and is expanding its presence in Latin America by investing in mining, oil and agricultural products as its seeks commodities supplies.
Beidahuang’s representative in Argentina, Yue Gang Wong, also participated, in the press conference.
--Editors: Dale Crofts, Robin Saponar
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