19/08/2009 (China Knowledge) - China National Cereals, Oils&Foodstuffs Corp, the country's largest edible oil and food producer, is planning to set up a soybean-processing plant with an annual capacity of 1.2 million tons in Beibu Gulf Economic Zone in Qinzhou, Guangxi Zhuang Autonomous Region.

The RMB 1.85 billion project, which will cover an area of 153,000 square meters, is expected to start construction in September. Upon its completion, the project will have a wharf throughput capacity of 2 million tons annually and a railway transportation capacity of 800,000 tons.

This is COFCO's second investment in soybean-processing. In April, COFCO started building a RMB 4-billion oil-pressing project in Tianjin, which will have an oil production capacity of 6 million tons per year.

China's major edible oil producers, which include Sinograin Oils & Fats Industrial Co and Jilin Grain Group, also plan to build new factories in Guangdong Province to increase their production capacity.

Overcapacity in the soybean-processing industry has created chronic price problems, said Liu Denggao, deputy secretary-general of the China Soybean Industry Association.

The National Development and Reform Commission last year issued guidelines to curb overcapacity in the soybean oil processing industry in August, but producers have ignored them, said Liu.

The NDRC hopes China's annual edible oil production capacity can be kept under 75 million tons next year and 65 million tons in 2012.