Bunge Brasil, a subsidiary to Bunge, Ltd. announced it is closing a soy processing plant in Rio Grande do Sul, Brazil because of the country’s tax structure. The Brazilian government lifted the PIS/Cofins social security and payroll tax from the cooking oil industry resulting in soy processors being left with large amounts of tax credits that have been made worthless. Before the shift, soy crushers were able to use the tax credits against other tax liabilities. The change has cut into processor’s profit margins and has driven companies to idle their plants. Bunge’s remaining six soy processing plants will remain operational. In addition, in October 2013 after reporting a quarterly net loss, Bunge intimated it would divest itself of its Brazilian sugar milling business. If it does, Bunge would be the first major player to exit the Brazilian sugar industry.
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