Archer Daniels Midland (ADM) and Cargill have reached agreement to launch a joint venture to provide soybean meal and oil for customers in Egypt.
The joint venture would own and operate the National Vegetable Oil Co. soy crush facility in Borg Al-Arab, Egypt, along with related commercial and functional activities, including a separate Switzerland-based merchandising operation that would supply soybeans to the crush plant. Cargill is currently expanding the plant from 3,000 to 6,000 metric tons of daily crush capacity. The plant will be able to produce higher-protein soybean meal while reducing Egypt's soybean meal import needs.
"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 Europe, Middle East & Africa (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 president, EMEA oilseeds crush, explained that ADM is adding to its geographic footprint in regions of expanding growth, and “we're particularly pleased to continue to enhance our capabilities in Egypt."
He added, "Egypt is an important market where demand for high-quality soybean meal and oil is outpacing the rest of the world. By bringing together expertise and resources from two great companies and by utilizing an existing facility and infrastructure, this joint venture would be perfectly positioned to efficiently meet growing Egyptian demand.”
The joint venture will be managed as a stand-alone entity consisting of equal ownership by ADM and Cargill, with a management team reporting to a board of directors appointed by the two parent companies. The joint venture's assets will not include Cargill's grain business and port terminal in Dekheila, Egypt, or the ADM-Medsofts joint venture at the Port of Alexandria. Each company will continue its separate business activities in the country and region.
The deal, which is not yet complete, is subject to regulatory review. The companies hope to formally launch the joint venture in mid-2018.