MEXICO – American agribusiness and food company Bunge has agreed to sell seven Mexican wheat flour mills to Mexico’s largest flour miller Grupo Trimex.
World Grain reported that the sale for an undisclosed amount continues a recent trend by Bunge to optimize its portfolio to focus on core businesses.
Portfolio optimization has been regarded as a top priority of Bunge chief executive officer Greg Heckman who has been at the helm of the American commodity trading giant since 2019.
The plants involved in the transaction are located in Campeche, Mexico City, Acapulco, Guadalupe, Queretaro, Navojoa and Veracruz.
“Bunge is most effective when we operate our value chains end-to-end, collaborating closely with our farmers and customers,” Heckman said.
“The wheat milling business in Mexico is not fully integrated in the way that is critical to successfully serving our customers in line with our long-term sustainable and strategic goals.”
He further noted that Bunge was confident that selling the business to a well-respected wheat miller “will provide a great opportunity for our employees as well as our customers.”
Bunge, which has focused on bolstering its oilseeds platform and expanding into complementary businesses during Heckman’s tenure, said it will continue to serve its oil and meal customers in Mexico and will continue to operate its corn mill in Querétaro.
In the past two years, Bunge has sold 35 US grain elevators to Zen-Noh Grain Corp., ended its stake in Southwest Iowa Renewable Energy, LLC, and sold its rice mill in California to Farmers’ Rice Cooperative.
Although it has divested its Mexico flour milling operations, Bunge still operates seven wheat flour mills in Brazil.
Once approved, the transaction will expand Grupo Trimex leadership position in wheat flour milling. It now will have 20 flour mills in Mexico that grind three types of wheat — hard, soft and durum.
Earlier this year, the International Grain Council forecast Mexico’s total wheat production to be at 2.8 million tonnes in 2020-21, unchanged from its figure of a month earlier and up from 3.3 million the year before.
To supplement its local production, IGC anticipates Mexico to import 5.4 million tonnes of wheat in the 2020-21 MY, an unchanged forecast, against 5.2 million the year before.
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