US – Agribusiness and food company Bunge Ltd. Has announced that its B2B edible oils business Bunge Loders Croklaan JV has entered into an agreement to sell its refinery in Rotterdam to Neste Corp. for US$300 million in cash, excluding working capital.
Bunge plans to use a portion of the sale proceeds to reinvest in its asset footprint to reach greater operational flexibility and efficiency.
Greg Heckman, Bunge’s Chief Executive Officer, said, “This transaction supports our long-term strategy in value-added oils and oilseeds-based ingredients by enabling us to further enhance our footprint in an innovative and sustainable way.”
The US based agribusiness company however plans to lease back the facility from Neste in a phased transition through 2024 in order to continue to supply its customers with its products.
Bunge Loders Croklaan products are used in a wide range of applications, from bakery and confectionery to culinary and infant nutrition.
The company which operates as the global B2B edible oils business of Bunge Limited is a leading global producer and supplier of sustainable plant-based specialty oils and fats for the food manufacturing industry.
Its parent company, Bunge Ltd. sources, processes and supplies oilseed and grain products and ingredients, and has nearly 25,000 employees worldwide.
The company reported third-quarter net income attributable to Bunge of US$262 million compared with a loss of over US$1.49 billion in last year’s quarter, when the company took about US$1.7 billion in charges.
For the recent quarter, Bunge reported net sales of US$10.16 billion, down from $10.32 billion in the third quarter of 2019.
In Bunge’s quarterly report last week, Heckman said the company’s strong third quarter showed “outstanding execution” across its global platform, “leveraging improving market trends.”
“Looking into next year, we expect many of the favorable trends to continue with demand for our products remaining strong,” Heckman said in the quarterly report
“We also expect additional global demand for vegetable oil from the growth of biofuels. With our strength in oilseed processing, in addition to our global origination and distribution capabilities, we believe we are well positioned to meet market demands and capitalize on this growth.”
Last year, Bunge agreed to sell its margarine and mayonnaise assets in Brazil to Seara Alimentos, a subsidiary of Brazilian meat processor JBS, for 700 million reals ($170.64 million).
While announcing the Brazil deal, Heckman said: “This transaction further streamlines our operations in Brazil around our core capabilities, while providing good value for a solid business”.
The company also agreed to sell its stake in an ethanol plant in Iowa, US to Southwest Iowa Renewable Energy (SIRE) ending Bunge’s 13-year ownership interest in SIRE.
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