US food giants Archer Daniels Midland (ADM) and Cargill have signed an agreement to create a joint venture (JV) to meet increasing customer demand for soybean meal and oil in Egypt.
The JV, which will be equally owned by the partners, will own and operate the soy crush facility of National Vegetable Oil Company (NVOC) in Borg Al-Arab.
Cargill owns a majority stake in NVOC, which produces crude soybean oil and soybean meal.
ADM and Cargill will also take over related commercial and functional activities of the soy crush facility, including a Switzerland-based merchandising operation that will supply it with soybeans.
Cargill EMEA grain and oilseed business head Roger Janson said: “The joint venture brings together Cargill and ADM’s operational and commercial expertise to meet growing local demand for higher-quality feed ingredients.
“This deal is part of our strategy to grow Cargill’s business across Egypt and the North Africa region and helps us better serve customers in the market with safe, affordable and nutritious food.”
Cargill announced a $100m investment in September 2015, to double the daily crush capacity of the NVOC soy plant from 3,000 metric tons to 6,000 metric tons.
The expansion will help the plant produce soybean meal with higher protein content and at the same time is expected to bring down Egypt’s dependency on soybean meal imports to meet its domestic demand.
ADM EMEA Oilseeds crush president John Grossman said: “Egypt is an important market where demand for high-quality soybean meal and oil is outpacing the rest of the world.
“By bringing together expertise and resources from two great companies, and by utilizing an existing facility and infrastructure, this joint venture would be perfectly positioned to efficiently meet growing Egyptian demand.”
Cargill’s grain business and port terminal in Dekheila, and ADM-Medsofts joint venture at the Port of Alexandria will not be part of the latest JV assets.
The JV will be operated as an independent entity by a management team, which will report to a board of directors appointed by ADM and Cargill.
Subject to receipt of regulatory approval, the companies expect to launch the JV in mid-2018.
Image: ADM North American Headquarters in Decatur, Illinois. Photo: courtesy of Archer Daniels Midland Company.
