By Elliot Holgate, Market Reporter (Latin America)
Brazil continues to attract significant foreign investment, particularly for amino acid manufacturing. The country’s abundant resources and large domestic market make it an appealing destination for international companies like the Fufeng Group and CJ Bio. However, challenges such as complex bureaucracy and strong unions remain, market sources said at Brazil’s largest animal protein event, SIAVS, last week.
Direct foreign investment in Brazil remains strong, with the country expected to be among the top eight global recipients.
"Inflow of capital underscores the sustained international confidence in Brazil’s market,” said Eduardo Giannetti, a Brazilian economist who opened the SIAVS event.
Fufeng Group was considering investing approximately $400 million in a biological fermentation plant dedicated to producing amino acids from corn in Brazil. Market sources believe that if the project is completed, Fufeng could produce lysine, threonine, tryptophan, and/or valine.
Celso Mello, Managing Director at Cargill Animal Nutrition Latin America South highlighted Brazil’s attractiveness for amino acid production, citing the availability of grains and sugar for fermentation, and strong demand within Brazil for feed additives.
Mello noted that local production could enhance Brazil’s agricultural competitiveness on the global stage.
Ariovaldo Zani, CEO of Brazil’s animal feed association Sindiracoes expressed confidence that Chinese companies would establish operations in Brazil, drawing parallels to the electric vehicle sector. However, he cautioned that investments must be carefully considered given the complexities of Brazilian bureaucracy and unions. Other market participants suggested that Chinese manufacturers might face more challenges in Brazil than in the US due to Brazil's complex bureaucracy and strong unions.
Sources reported that three other Chinese amino acid manufacturers had previously planned to open a factory in Brazil, one of which also visited the state of Mato Grosso due to its large corn production. One trader used the example of BBCA in 2013, which had signed an intention letter to invest $320 million in a corn processing facility; however, the project never came to fruition.
Efforts have been underway for many years at government level, in collaboration with the private sector, to encourage foreign companies to invest in feed additive manufacturing capabilities in Brazil.
One such initiative began in 2012 when Sindiracoes and the government explored the feasibility of establishing a Chemical Industrial Park in Brazil. The initiative aimed to produce essential amino acids and vitamins domestically. However, resistance from major chemical multinationals, who had already heavily invested in production facilities abroad, reportedly stalled progress.
Since 2012 the geopolitical situation has changed as demonstrated by CJ Bio’s US $570 million investment in an amino acid plant in Brazil. According to CJ Bio, Brazil is now its main source of tryptophan for the Americas region.
According to Expana's Feed Additives Supply & Demand Pro service, the Piracicaba plant has a capacity of approximately 120,000 tonnes of lysine, 30,000 tonnes of threonine and 17,000 tonnes of tryotophan.
