Honda Expects Bumper Year -- for Its Beans

Honda Motor Co. expects to set an export record this year -- in the soybeans it returns to Japan in containers that arrived in the U.S. filled with spare parts.

In the shadow of its Marysville auto plant, the company processes 550 bushels of soybeans each hour that end up as tofu and soy sauce. The automaker expects to sell a record 1 million bushels this year and is hunting new markets in Australia. The company says potential customers in Europe and Thailand have expressed interest.

Honda began shipping soybeans in 1986 as a way to reuse cargo containers that were returning to Japan empty. The crop was plentiful in Ohio, there was a market for it in Japan and the shipments were a way for the automaker to invest in a state in which it has operated since 1983.

Between 250 and 280 farmers grow the soybeans for Honda on 22,000 acres in Ohio and Michigan.

The region produces soybeans that are especially high in protein, a quality desired by Honda’s Japanese customers because soybeans are a substitute for meat.

The growers are paid as much as $1.10 more a bushel than the $6.15 they would get on the open market.

Some of the soybeans are grown on Honda property, including in the infield of an auto test track. Honda leases the land there to area farmers, who grow the soybeans.

At the 18-employee processing plant, pods, stems and weed seed are removed and the soybeans are cleaned, separated by size and shape and polished.

A $1-million dust-collection system keeps soybean dust from migrating to Honda’s nearby paint plant, where Accords are painted in colors such as Desert Mist, Satin Silver and Nighthawk Black.

“It’s like a vacuum sweeper with a 75-horsepower motor on it,” said Joe Hanusik, manager of the processing plant. “It would clean your house in about 15 seconds.”

Once processed, the soybeans are shot into 66-pound bags. A robotic arm plucks each bag from the conveyor belt, wheels around and gently stacks it on wooden pallets.

Honda exports the soybeans -- along with auto parts, aluminum and steel -- under Honda Trading America, a subsidiary founded in 1972. The unit had $2 billion in gross revenue last year, up from $1.3 billion five years ago.

The automaker got its start in the soybean business in the mid-1980s after a chance meeting at an airport between Honda executive Hitochi Morimoto and a Japanese soybean supplier who was looking to expand the export of U.S. soybeans to Japan. Morimoto set up the business and later became president of Honda’s soybean-exporting operation.

At first, Hanusik’s family-run business, Madison Seed Co., processed soybeans for Honda in modest amounts. He now processes soybeans exclusively for the automaker, doing about twice the business of the seed company, which since has been sold.

Honda built its processing plant in 1999. It shipped 750,000 to 800,000 bushels of soybeans in 2004 and had $10 million in soybean sales in the 12-month period ended in March. That compares with $20 billion in auto-related sales for Honda in just the last three months of 2004.

Other automakers have also stepped outside their core business when opportunities presented themselves. General Motors Corp. disposes of used sand from its foundries by selling it to make concrete. The company also sells sludge generated from the paint process at its assembly plants for use in making plastics for park benches and playground equipment.

Soybeans account for about 23% of all the grain grown in Ohio. Honda’s exports accounted for only a fraction of the 207 million bushels of soybeans grown last year in the state. But Melanie Wilt, spokeswoman for the Ohio Department of Agriculture, calls the company’s effort significant.

“Anytime that we can easily facilitate the export of grain commodities directly from Ohio, that’s a great thing for Ohio’s economy,” she said.