BRAZIL – Global agribusiness company, Bunge has entered into an agreement to acquire 30% stake in a Brazilian-grain sourcing business, Agrofel Grains and Inputs.
Agrofel sells agricultural supplies in the southern state of Rio Grande do Sul supported by 15,000 farmers and 38 units, including warehouses and stores, with a combined capacity of 1 million tonnes and 470 employees.
Founded in Palmeira das Missões, Rio Grande do Sul, Agrofuel operation are primarily centered in buying, selling, exchanging and storing grain and as well as supplying seeds, fertilizers, plant nutrition and pesticides.
Wilson Ferrarin, chairman of the board of Agrofel said that the investment will enable the companies expand their foothold in the region.
“We share the same values and principles focused on ethics and sustainable production and believe that this transaction maximizes opportunities for both companies to expand their operations in Rio Grande do Sul,” Ferrarin said.
“Bunge has experience in risk management and complete logistics capacity and relying on this expertise puts us on another level in the country’s grain market.”
Bunge said that the deal is in line with the company’s strategy to strengthen its capacity to source grains in Brazil. Agrofuel operations in the grain industry include sourcing more than one million tonnes of grain annually, including soybeans, corn and wheat.
“Combining Agrofel’s broad relationship and expertise with local producers with our logistical management and existing origination capacity in Brazil is ideal for us to increase our origination capillarity in one of the most relevant soybean growing states,” said Raúl Padilla, president of Bunge Global Operations.
While financial details of the deal were not disclosed, the transaction is the first major deal that Bunge is set to close under its new global operating model.
Bunge’s restructuring was what the company said would enable it to shift away from the regional, matrix-based structure and simplify the organization while speeding up decision making, increasing strategic flexibility, customer focus and accountability.
The company has also announced that it will be moving its global headquarters from White Plains, New York to St. Louis, Missouri in the US. The relocation is expected to be completed by the end of the second quarter 2020.