USA – Agricultural commodity trader, Bunge Limited has announced that it has agreed to sell 35 U.S. interior elevators to Zen-Noh Grain Corporation to enable the company to optimize its portfolio and invest in higher returning operations.

Closing of the transaction, whose financial details were not disclosed, is subject to customary closing conditions, including regulatory approval.

“This transaction will allow Bunge to operate more efficiently and reinvest in higher returning areas of the company while reducing costs and strengthening our balance sheet,” said Greg Heckman, Bunge’s Chief Executive Officer.

Greg noted that Bunge will continue to be an industry leader in the U.S. grain marketplace through global grain trading and distribution with its export terminals in Destrehan, Louisiana and EGT, its joint venture in the Pacific Northwest. 

The company is currently investing in expanding its export terminals in Destrehan. “We will also continue our strong presence in the soybean processing business and milling operations,” Greg adds.

Through certain supply agreements, Bunge says that it will be able to access a larger and stronger origination and distribution network through Zen-Noh to better serve American farmers and global export customers.

In addition to the export terminals in Destrehan and the EGT joint venture, Bunge will retain ownership in Bunge-SCF Grain, Bunge’s joint venture with SCF, and the Bunge elevators in Indiana that directly support the company’s soybean processing plant in Morristown.

Bunge, which is set to announce its results for the quarter ended March 31, 2020 on May 6, 2020 reported an annual loss of US$1.28 billion on its previous financial year. However, its agribusiness division generated US$639 million driven by excellent execution and a better than expected market environment.

While presenting the financial results, Greg said that this year, the company will remain nimble and prudent in order to maximize the earnings potential of its global platform, while continuing to optimize its portfolio and operations.

As part of its portfolio optimization strategy, the company has also agreed to sell its margarine and mayonnaise assets in Brazil to Seara Alimentos S.A., in a move that seeks to streamline the its operation in the country.

The transaction included three production plants and the brands used for the two products. As part of the deal, Bunge retained its other branded products including packaged oils, shortenings and specialty oils.

The agribusiness giant has also divested its stake in an ethanol plant in Iowa, US to Southwest Iowa Renewable Energy (SIRE) ending Bunge’s 13-year ownership interest in SIRE.