EGYPT – The American global food processing and commodities trading corporation, ADM has entered into a definitive partnership with Cargill to launch a new soybean joint venture initiative in Egypt, subject to regulatory review.
The joint venture aims at meeting increasing customer demand for soybean meal and oil in the region.
As part of the joint venture terms, Cargill and ADM will in collaboration own and operate the National Vegetable Oil Company (NVOC), a soybean processing plant in which Cargill has a 98% majority shareholding.
The conglomerate will also participate in related commercial and functional activities, including a separate Switzerland-based merchandising operation that would supply soybeans to the crush plant.
The plant which Cargill was expanding from 3,000 to 6,000 metric tonnes of daily crush capacity, will be able to produce higher-protein soybean meal.
This will reduce the need for soybean meal imports into Egypt, as post forecast soybean consumption in 2017/18 show a record 3.14 million metric tonnes, a 40.1% increase, a direct result of new expansion by the major private crushers Cargill and Alex Seed Company as reported by USDA.
“The joint venture brings together Cargill and ADM’s operational and commercial expertise to meet growing local demand for higher-quality feed ingredients,” said Roger Janson, head of Cargill’s grain and oilseed business in EMEA.
“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.”
John Grossmann, ADM’s president, EMEA Oilseeds crush said that the venture will expand ADM’s growth and enhance its capabilities in Egypt, a vital market for high-quality soybean meal and oil.
He added that by bringing together expertise and resources from two great companies, and by utilizing an existing facility and infrastructure, the joint venture would be perfectly positioned to efficiently meet growing Egyptian demand.
The two companies will have equal ownership of the standalone business, managed by a team reporting to a board of directors appointed by the two parent companies.
The joint venture will not include Cargill’s grain business and port terminal in Dekheila, or the ADM-Medsofts joint venture at the Port of Alexandria and each company will continue its separate business activities in the country and region.
It was not long ago when Cargill announced plans to invest millions in Egypt to develop projects in agriculture, food and grain storage, and transportation logistics, as reported by Daily News Egypt.
According to the report, the company had intentions to boost its current investments of US$300 million, with plans to develop its grain storage projects in Daqahleya port plus new investments of US$10 million to add a storage capacity of 42,000 tonnes.