Governor Bob McDonnell announced today that Perdue AgriBusiness Incorporated, which owns and operates a major deep-water export terminal for grains and oilseeds in Chesapeake, has reached a new agreement with China's Dandong Port Group Company and its affiliate, Dandong Pasite Grain and Oilseed Co. Ltd., to supply up to 29 million bushels of soybeans in a series of bulk shipments for the 2013 crop. The agreement was reached in Dandong, a major port city in the Liaoning Province in northeastern China, last month during the governor's trade and marketing mission to Asia. Governor McDonnell served as the official signing witness to the accord between Perdue and Dandong.
Under the expanded export agreement, Dandong will purchase from Perdue up to 14 Panamex vessels of soybeans from the upcoming season's crop, which will be ready for export beginning in October. Each Panamex vessel holds approximately 55,000 metric tons, or more than 2 million bushels, of soybeans. The value of the shipments will depend on market prices at the time each order is placed. For reference, the Wednesday, May 30, 2013, closing price for soybeans from the Norfolk terminal, as reported by Virginia Market News Service, was $15.52 per bushel. Dandong purchased five vessels from the 2011 crop under the terms of the original business agreement reached in September 2011 and another 10 vessels of the 2012 crop from an expanded agreement reached in May 2012.
Speaking about the expanded agreement, Governor McDonnell said, "The decision to integrate agriculture into our overall economic development agenda continues to yield solid results for Virginia. When my team and I introduced Perdue and Dandong to each other in 2011, I knew their relationship had the potential to make China the Commonwealth's top agricultural export customer. That prediction came true last year and, largely due to the Perdue-Dandong relationship, our global agricultural exports reached an all-time high. I'm certain that our visit to Dandong last month solidified China's position for 2013 and beyond. I applaud Perdue's and Dandong's commitment to grow their relationship and I was honored to witness their new export agreement, which will provide more opportunities for growers across Virginia."
During the almost two-week trade mission to China and Japan in April, Governor McDonnell, Secretary of Agriculture & Forestry Todd Haymore, and Virginia Department of Agriculture and Consumer Services' (VDACS) staff had an itinerary partially focused on meeting with leading agricultural importers as part of the Governor's trade initiative to grow agricultural exports from Virginia. In 2012, Virginia's agricultural exports reached a record $2.61 billion. China was the leading market for Virginia's agricultural products, buying approximately $638 million in farm and forest products from the Commonwealth.
"Governor McDonnell and his team have been invaluable in helping foster this mutually beneficial relationship, and we commend them for their efforts to grow Virginia exports," said Dick Willey, President of Perdue AgriBusiness. "We truly appreciate the partnership we have built with Dandong over the last two years with Virginia's help, and are pleased to support Dandong's growing processing capability by supplying soybeans and expertise in the coming year."
"I was honored to host Governor McDonnell, Perdue, and the Virginia delegation in Dandong last month to celebrate the relationship with Virginia we've worked to build over the last two years," said Mr. Wenliang Wang, Chairman of the Dandong Port Group and Dandong Pasite Grain and Oilseed Co. "The new export purchase agreements reached in Dandong last month with our valued partner Perdue further builds our strong relationship and enhances our efforts to expand our soybean processing business. I'm particularly grateful to Governor McDonnell for his visit, his leadership, and his continued efforts to increase agricultural exports from Virginia to China."
The new export commitments will help Dandong meet a rapidly increasing demand for soybeans in China. Dandong is scheduled open a new soybean crushing facility later this year, more than doubling its previous soybean processing capacity. Perdue and Dandong signed memorandums of understanding (MOU) in 2011 and 2012 to explore future business opportunities and to improve the quality of animal feed stock produced by Dandong at its current and future processing facilities.
Perdue AgriBusiness ranks among the top U.S. grain companies and is committed to helping its customers prosper with flexible, forward-thinking solutions for agriculturally based products from a uniquely trusted name. Perdue AgriBusiness merchandises grain and oilseeds, processes oilseeds, custom blends feed ingredients, refines edible oil and trades a wide variety of agricultural commodities domestically and internationally. Perdue AgriBusiness is a direct exporter of US commodities through its deep-water port in Chesapeake With an entrepreneurial spirit, Perdue AgriBusiness ventures touch such diverse opportunities as bio-energy, organic fertilizers and specialty livestock feeds. Perdue AgriBusiness is a division of Perdue Farms, the family-owned, family-operated company working to become the most-trusted name in food and agricultural products.
The Dandong Port Group is a Hong Kong-based holding company that operates major port and infrastructure assets throughout Asia, including the Port of Dandong. The port, which employees more than 3,000 individuals, provides direct shipping links to more than 70 ports in more than 30 countries and offers general and bulk cargo, container, and passenger transport services. Dandong Pasite Grain and Oilseed Co. Ltd. is the largest purchaser and processor of soybeans and grains in northeastern China. It will have an annual capacity that exceeds two million metric tons of soybeans when its new processing facility comes on line later this year. Dandong and Dandong Pasite serve as key commercial links for grain, bulk commodities, and container shipments for China as well as northeast Asia.
In 2010, Governor McDonnell implemented a strategic plan to grow the state's agricultural and forest product exports. Working in close partnership with Virginia's producers, agribusinesses, and exporters, Secretary Haymore and VDACS Marketing and Development staff focus on retaining strong market presence in mature and established markets like Canada, China, and Japan, pursuing new opportunities in emerging markets such as India and Mexico, and developing business in unconventional markets, such as Cuba and Venezuela. This team also works with state government partners, including the Secretariat of Commerce and Trade, the Virginia Port Authority, and the Virginia Economic Development Partnership, to find more export opportunities.
To supplement the strategic effort, the Governor secured new international marketing funds from the General Assembly over the last three years for VDACS to open agricultural trade offices in India, China, Latin America, and the European Union, all regions that contain some of the world's largest and fastest growing economies. Later this year, Virginia will open an agricultural trade office in Canada. VDACS has had a trade office in Hong Kong for more than 20 years.
Since taking office in 2010, Governor McDonnell led overseas trade missions to Canada, Great Britain, Ireland, Switzerland, the Netherlands, Sweden, Germany, Japan, China, South Korea, Israel, and India. These missions and the work of VDACS' new international marketing staff with Virginia's private sector exporters have resulted in more than $500 million in new agricultural exports from Virginia so far.
Agriculture and forestry are Virginia's largest industries, with a combined economic impact of $79 billion annually: $55 billion from agriculture and $24 billion from forestry. The industries also provide approximately 500,000 jobs in the Commonwealth according to the Weldon Cooper Center for Public Service at the University of Virginia.