Our new Brazilian plant is well on track
We’re almost ready to unleash the power of pectin
By Judd Hoffman & Rajiv Mehta
Let’s just say it’s not been the easiest time to be building a massive, high-tech pectin plant.
When our facility in Bebedouro, Brazil begins production next year, it will be a large-scale plant processing fresh peel raw material. Our investment of US$150 million in the new HM (High Methoxyl) pectin plant will further cement our position as a leading global supplier for this great hydrocolloid. The site, which features state-of-the-art technology and highly efficient processing, complements our three existing pectin factories, which are all located in Europe (France, Germany and Italy). The latter includes upgrading our existing facilities to modern standards and improving our cost structure as needed in some specialty products.
Construction progress is testimony to the great work of our local project teams on the ground in Brazil and excellent collaboration from Europe for implementing technology, product portfolio and applications know-how. After all, we’re going through a period of high uncertainty, as COVID-19 heavily impacts public health and economies in Brazil and around the world at large. But our team has been very well engaged and demonstrated real agility and flexibility these past months. Despite all the uncertainties and challenges we’ve faced, we’re delighted that this project is on schedule and within budget, while the commercial outlook remains positive too.
Pectin: a truly stable ingredient performer
The growing demand for pectin as a label-friendly ingredient during the unprecedented turbulence of 2020 is further evidence of its potential as a nature-derived, label-friendly, vegetarian and vegan solution. Pectin market demand projected to grow at 3 to 4 percent CAGR from 2019 to 2025*, consistent with long-term historical trends, population growth, underlying food consumption habits across regions and the steady switch towards label-friendly ingredients.
This growth is also partly driven by innovation, with Innova Market Insights reporting a +7% CAGR in pectin inclusion in global new product launches (2018 vs. 2013)**. Many of these launches are positioned on a clean label or natural platform.
Our HM products to be produced at Bebedouro, will serve the growing demand from acid dairy drinks manufacturers globally. At the same time, they will meet the broad and steady growth for pectin in well-established applications, including jams, juice beverages and confectionery.
But there are new opportunities in higher value segments too, albeit from a small existing base. Pectin is continuing to find some interesting growth opportunities in the pharma and personal care spaces, where it functions as a nature-derived alternative.
Success in COVID mitigation
Plant construction in Bebedouro started in August 2019. At the time of writing (October 2020), progress is about 60 percent complete, with steel, piping and cable installation at an advanced stage, and most of our equipment already delivered. Construction is therefore anticipated to be 100 percent complete by end-Q2 2021, with the first deliveries of product to customers expected by end-Q4 2021.
This progress is remarkable considering that Brazil has been a well-documented global COVID-19 hotspot throughout 2020. But by implementing a broad range of mitigation measures at our construction site, we have so far managed to avoid any COVID-19 cases on the construction site among the 700 colleagues and contractors working there.
Measures that we have installed include:
Working to a two-shift process (2 x 8 hours), so electrical and mechanical teams are not onsite simultaneously. Shifts have been synchronized as they are needed back to back.
Installing social distancing measures at the site, including at the canteen.
Where social distancing is not possible onsite, supplying PHE suits and masks.
Implementing body temperature monitoring measures and nasal tests.
Hiring a team of safety officers to patrol the site and ensure that work is being done safely and to all required operating procedures.
Applying best practices from ongoing Cargill projects around the world, including a recent South East Asia construction project.
Of course, COVID-19 will continue to present a risk between now and the end of construction. Therefore we are reviewing our systems from time to time to identify loopholes or weaknesses.
It’s clear that recent months have really pushed our creativity. We have been able to progress on schedule without compromising the health & safety of our workers and contractors. We will need to continue to think outside the box as we train and offer startup support to the more than 100 new staff who will come onboard once production begins. As part of this strategy, we have already shifted towards a completely virtual but interactive way of supporting and training new employees for the Bebedouro site.
The perfect spot
But why are we building this plant in the first place?
First things first – it’s all about location, location, location.
Bebedouro is truly at the heart of the Brazilian citrus processing sector, in an area offering high rainfall levels, adequate water supply, and a wealth of product from Rainforest Alliance Certified sustainable fruit farms. We’re located within a very short distance of the world’s third-largest juice plant and within 50km of several other major juice producers. It means that we are assured of fresh raw material supply throughout the year: July-January (orange), February-March (lime) and May-June (lemon).
With access to process these three key citrus fruits for 10 months per year, we’ll be able to offer our customers a wealth of benefits, both in terms of application efficiency and cost-in-use. After all, orange, lime and lemon are all must haves if you want to offer a broad and effective pectin portfolio. For example, while orange pectin stabilizes the protein and prevents separation in acid dairy beverages, lemon and lime pectins help achieve a gel for your jams and confectionery applications.
Cargill: Growing strong in pectin
The pectins that we produce at Bebedouro will serve customers across the globe and across applications with true scale and breadth. Asian markets represent a third of demand growth for pectin as a label-friendly ingredient solution, as per global trade data, Euromonitor and Innova Market Insights research. Having said that, this data indicates increased growth coming from North America and Europe and Middle East markets too. European markets are already very well served from our existing plants in the region, which will continue to operate as normal.
It’s important to stress that the new facility comes as part of a growth strategy and our investment supplements and complements European investments and continued production at existing facilities. In fact, as part our overarching and ambitious strategy to become a real leader in pectin globally, we are currently upgrading our Redon facility to implement more modern processing operations.
We also need to highlight that there are advantages to our existing European facilities. Since they process and refine dry raw material into pectin, they can choose the specific raw material as per customer application requirements anytime during the year. And our European facilities make low-methoxyl pectins too, and are in proximity to customers. Since Cargill provides good technical and application service support, you can rely on great consistency and performance either way. Our plan is to provide consistent quality and functionality in the application, whether the product is supplied from Europe or Brazil.
Into 2021 with optimism
In short, we continue to see industry growth and are still optimistic on the future of pectin. There’s no regrets on the timing of our ambitious pectin project, even though it’s tested our agility and creativity. We’re firmly focused on delivering on the promise to our customers on being up and running at Bebedouro in 2021, while always putting the safety of our team first. We are continuing full steam ahead in the creation of a new jewel in the Cargill crown and are super proud of the work of our project teams. They are ultimately the ones who will make it possible to serve you up with great pectin solutions in 2021 and beyond.
*Global Trade Atlas 2019.
**Europe and North America Launches in YTD 2019. Source: Innova Market Insights, October 2019.