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Port of Kalama Gearing up for Grain by Erik Olson The Daily News, December 17, 2009

The Port of Kalama's largest grain terminal is beefing up its operations, which port officials say will help keep them competitive when a $200 million terminal goes on line at the Port of Longview in 2011.

Kalama Export LLC is spending $36 million to construct a grain cleaner building, a new loading belt and eight shipping silos, tripling the number to 12, according to the port.

"It's great to see them making their own improvements," said Lanny Cawley, Port of Kalama director.

The Port of Kalama is one of the largest grain exporters on the West Coast, transporting 6.8 million tons of grain mostly to Asian markets this year from two grain elevators, according to the Pacific Maritime Association.

Kalama Export accounted for about two-thirds of the port's $3.4 million in revenue from grain exports in 2009. Company officials declined to comment on the development this week, saying they will be ready to discuss the project in more detail in January.

Kalama Export is a joint venture owned by Illinois-based Archer Daniels Midland Co. and Nebraska-based ConAgra Inc.

Portland-based United Harvest LLC, which accounts for the remaining third of the port's export revenue, announced plans this summer to expand its rail lines to allow trains to unload grain more quickly. The company also is planning to build a new dock for grain exports at its site off the Todd Road exit of Interstate 5, according to the port.

United Harvest is a joint venture between CHS Inc. of St. Paul, Minn., the nation's largest producer-owned cooperative and Mitsui & Co. Ltd., a Tokyo-based exporter.

The Kalama terminals are moving away from corn transports in favor of wheat and soy beans, which are in high demand in Japan and China, Cawley said.

Over the next decade, China's demand for soy beans is expected to skyrocket by 21.6 million tons, which is about 80 percent of the worldwide growth for exports, according to the U.S. Department of Agriculture.

"Everybody is looking to be more competitive, given what is going on in the grain business," Cawley said.

The rising demand is what attracted St. Louis-based Bunge North America to form a new company to build the new $200 million grain terminal at the Port of Longview, which will have an annual capacity of 8 million tons. Construction started this summer.

The terminal is operated by Portland-based EGT Development LLC, which is a partnership among Bunge, Japan-based Itochu Corp. and Korea-based Pan Ocean STX.

The Port of Kalama expansions will help business at the Longview terminal in the long run because they will attract more grain to the Columbia River system, said Ken O'Hollaren, Port of Longview director.

"Hopefully, that investment is a reflection of their view that grain is a growing business," O'Hollaren said.