Cargill expands potato starch production in 'clean label' push

CHICAGO (Reuters) - Commodities trader Cargill Inc [CARG.UL] and a Danish partner will invest $22.5 million in a new potato starch production unit in Denmark, they said on Monday, as the U.S.-based agribusiness seeks to capture consumer demand for simpler ingredients.

Cargill and Danish potato starch partner AKV Langholt AmbA, will operate the project through AKV Langholt's facility in Denmark, Cargill said in a statement.

Cargill did not say how much of the investment it would account for. The company could not immediately be reached for comment.

Cargill has been expanding in new "native starches" produced from plants such as corn and wheat, as an alternative to more processed starch derivatives used to bulk up food products such as pasta sauce.

The boost in "label-friendly" ingredients comes amid a broader push for diversification as Cargill and other merchants battle tight margins amid excess grain supplies. It said in September that gains in its starch business helped boost food processing earnings last quarter.

(Additional reporting by Chris Prentice in New York City.; Editing by Susan Thomas)

By P.J. Huffstutter