Archer Daniels Midland Company (ADM) will purchase 50% stake in Egypt-based Medsofts Group. Together, the companies will own and manage supply chain and merchandising operations of grains, oilseeds, and soft commodities.
The new joint venture will handle international operations of more than 1.5 million metric tons of grains, oilseeds and soft commodities, which are exported to Middle East and North Africa. The JV will also oversee the inland logistics network which connects port operations to customers across Egypt. The 50-50 venture will also handle the grain distribution operation to serve customers in Egypt.
The agreement also entails that the joint venture would own 50% stake in Nile Stevedoring & Storage Co, which operates grain port facilities in Egypt. With an annual discharge capacity of more than two million metric tons, the facility is set for future expansion with the additional land available. The companies are conducting a due diligence to check the feasibility of an oilseed crush facility on that land in future.
ADM agricultural services business unit president, and EMEA operations president Joe Taets said: "This is an excellent addition that helps meet several key goals for strategic expansion in our Agricultural Services business: it further diversifies and expands our merchandising footprint, it helps us grow our logistics services, and it is another important enhancement of our destination marketing capabilities, which are getting us closer to our customers as we deliver products directly to them.
"We are continuing to invest in our global supply chain as we execute our plan for profitable growth. This year alone, in order to continue diversifying our footprint and enhancing our ability to connect supply and demand around the globe, ADM has opened new distribution and merchandising offices in Central America, Asia and Africa; acquired a port and shipping agency in Brazil; announced major expansions at port facilities in Argentina and Brazil; launched ARTCO Stevedoring; and acquired full ownership of strategically-located terminals on the Black Sea. These investments are expanding our reach and capabilities, and delivering value to our customers and our shareholders alike."
The transaction, which is subject to regulatory approval and satisfaction of customary conditions, is slated for completion in early 2016.
Last week, ADM and Wilmar Group entered into an agreement which facilitates their joint venture Olenex to become fully functional in order to market oils and fats in Europe. Under the agreement, ADM will put two of its sites into the joint venture. A specialty oils and fats facility and a palm refining plant in Hamburg, Germany, will be added to the joint venture.
Wilmar will add its tropical oils processing plants in Brake, Germany and Rotterdam, the Netherlands, top the JV Olenex. The JV will also see the integration of raw materials sourcing, trading, and sales and marketing operations.
Image: ADM expands its supply chain operations of oilseeds. Photo: Courtesy of jone500/FreeDigitalPhotos.net.
