Archer Daniels Midland Company (ADM) announced today that it has reached an agreement to purchase a 50% stake in Cairo-based Medsofts Group. The new 50-50 joint venture will own and manage merchandising and supply chain operations, including an international merchandising operation that handles more than 1.5 million metric tons of grains, oilseeds and soft commodities annually destined for the Middle East and North Africa. Additionally, the venture includes a local grain distribution operation, serving customers in Egypt and an inland logistics network that links port operations to customers throughout Egypt.
ADM will also own a 50% share of Nile Stevedoring & Storage Co., which operates one of the largest grain port facilities in Egypt. Located at the Port of Alexandria, the facility has an annual discharge capacity of more than 2 million metric tons, and includes additional land for future expansion; the joint venture parties are conducting advanced due diligence on a potential oilseed crush facility on that land.
“This is an excellent addition that helps meet several key goals for strategic expansion in our Agricultural Services business: it further diversifies and expands our merchandising footprint, it helps us grow our logistics services, and it is another important enhancement of our destination marketing capabilities, which are getting us closer to our customers as we deliver products directly to them,” said Joe Taets, president of ADM’s Agricultural Services business unit, and president of the company’s EMEA operations.
To continue diversifying ADM’s footprint and enhance its ability to connect supply and demand around the globe, Taets said this year the company opened new distribution and merchandising offices in Central America, Asia and Africa; acquired a port and shipping agency in Brazil; announced major expansions at port facilities in Argentina and Brazil; launched ARTCO Stevedoring; and acquired full ownership of strategically-located terminals on the Black Sea.
“These investments are expanding our reach and capabilities, and delivering value to our customers and our shareholders alike,” he added.
The transaction is subject to regulatory approval. ADM is targeting closing the deal in early 2016.