SAO PAULO, Jan 17 (Reuters) - Bunge Brasil, a subsidiary of U.S. based Bunge Ltd, said it is closing a soy processing plant in southern Rio Grande do Sul state this week, saying Brazil's tax structure favors the export of raw soybeans.
Brazil's soy crushing plants processed less in 2013 than in the previous year after President Dilma Rousseff's government lifted the so-called PIS/Cofins social-security and payroll tax from the cooking-oil industry, leaving crushers holding large amounts of worthless tax credits.
Soyoil producers had previously been able to use those credits against other tax liabilities, but many of those taxes were also lifted. The changes have hurt the crushing industry's profit margins and resulted in idle processing plants.
"Some factors have impacted soybean crushing activities in this country, favoring the sale of grains at the expense of processing products such as oil and meal," Bunge said in a statement late on Thursday.
Bunge still has six soy processing plants in Brazil, in five different states. The company said closing the plant will not effect other operations in Passo Fundo, Rio Grande do Sul, where it has a grain silo, and some commercial activity.
After reporting a quarterly net loss, Bunge's new chief executive in October signaled plans to shed the company's loss-making Brazilian sugar milling business.
If it presses ahead with those plans, Bunge would be the first major merchant to consider exiting the once-hot sector that has swallowed billions of dollars of investment.
- Bunge Ltd