TOKYO, Reuters [WN] via NewsEdge Corporation : Honda Trading Corp, a wholly owned unit of Japanese automaker Honda Motor Co Ltd , said on Wednesday it will build a plant in the U.S. state of Ohio for sorting and bagging soybeans free of genetically modified organisms.

The company plans to spend 600 million yen for a plant that will start operation around October with an annual handling capacity of 20,000 tonnes of soybeans, a spokesman said.

Soybeans to be sorted and bagged at the plant will come from U.S. farmers with contracts with Honda Trading for production of non-GM soybeans. for sale to makers of "tofu" soybean curd.

This year, Honda Trading has contracts with 118 U.S. farmers, who are expected to supply 15,000 tonnes of non-GM soybeans to the company, the spokesman said.

Honda Trading has consigned sorting and bagging of U.S. soybeans to a local company but said it decided to build its own plant as the existing facility is operating at full capacity.

The spokesman said Japanese government's decision to require labels on genetically altered food is expected to stimulate demand for non-GM crops from Japanese food processors.

"We supply soybeans to tofu makers currently. We are targetting customers such as makers of soybean paste and fermented soybean products," he said.

Japan has approved 22 varieties of six GM crops for import and sale, including soybeans, corn, rapeseed, potatoes, cotton and tomatoes.

But the government earlier this month decided to impose labelling requirements on these crops and food products made from them.

Japan imported 2.45 million tonnes of soybeans in the first half of 1999, of which imports from the U.S. accounted for 2.11 tonnes or 86.2 percent.

Honda Trading started imports of U.S. soybeans to Japan in 1988.

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