A St. Louis-based agribusiness conglomerate is embarking on a $1 billion investment in the New Orleans area, including a plan to triple capacity at its Avondale palm oil refining facility, which will make it the largest processing plant of its kind in the U.S., company executives said.
The company, Bunge, which had revenue of about $60 billion last year, bought the Fuji Vegetable Oil refinery in spring 2023 for $178 million, according to company documents. Fuji Oil built the facility in 2019 for about $70 million but told shareholders last month that it sold it to focus more on southeast Asia.
Bunge plans to expand the volume of processed oil at Avondale threefold to 6,000 standard rail cars a year, according to Brian Hudson, who runs the palm and specialty oils division.
“The Avondale facility will be the largest palm and specialty oils processing plant in North America once it’s completed,” Hudson said, adding that jobs there will have increased from 40 when the plant was acquired to 55 by the time work is done next year. The expansion project is expected to create 70 construction jobs.
The $225 million expansion will not alter the physical footprint of the factory at Avondale, where it is situated within the International-Matex Tank Terminals giant storage complex, which was also recently upgraded and expanded.
The facility will mostly produce oils that are used in a variety of processed food products, as well as a small amount sold as biofuel.
Upriver expansion
Apart from the investment in the Avondale oils facility, Bunge also plans to spend almost $800 million to expand at its Destrehan facility, where it has had a grains storage and exporting operation for about 60 years.
Two years ago, Bunge and Chevron established Bunge Chevron Ag Renewables to meet growing biofuel demand, especially in the middle of the country which can be reached by barge on the Mississippi River.
After a lengthy evaluation and permitting process, construction is set to begin on three main expansion projects at Destrehan: to increase oilseed processing capacity, to increase barge unloading capacity, and to build a vegetable oil facility to produce biofuel.
The company said that part of the project will create 30 full-time jobs and 150 construction jobs during the building phase.
“This will build on what they’ve had there for years and add the latest and greatest technology,” said Corey Faucheux, director of economic development for St. Charles Parish.
The parish estimates that the expansion will add $115 million to sales and use taxes from the construction phase, $50 million in sales/use taxes from the operation of the plant, and $20 million in property taxes, which is subject to an industrial tax exemption program deal.
Low key plan
The Avondale expansion plans will be formally announced at a ribbon cutting on Thursday.
“The Bunge acquisition of Fuji flew pretty much under the radar,” said Jerry Bologna, CEO of the Jefferson Parish Economic Development Commission. “But the expansion of the food and beverage manufacturing cluster has certainly been an area of focus for us.”
Bunge will inherit the state incentive package negotiated for Fuji Oil, which included Louisiana’s Quality Jobs and the Industrial Tax Exemption programs. Fuji also got a $250,000 grant from the state agency for infrastructure improvements.
Bologna said that there is still hope that TOP Vegetable Oils, part of the U.S. operations of a Colombian palm oil trading company, will build a facility at the nearby Avondale Global Gateway complex. The project has been under discussion for the past four years.
“At the last check-in, they had asked for a rebid of the construction estimate and are inching ever closer to recommencing construction there,” he said.
TOP oil company officials weren’t immediately available for comment.
The story has been updated with corrected information from the source about the number of jobs at Avondale.
This article was originally published by a www.nola.com . Read the Original article here. .