Archer Daniels Midland Company (ADM) and Cargill have reached agreement to launch a joint venture (JV) to provide soybean meal and oil to customers in Egypt, according to a Monday press release.
The joint venture would own and operate the National Vegetable Oil Company soy crushing facility in Borg Al-Arab, along with related commercial and functional activities, including a separate Switzerland-based merchandising operation that would supply soybeans to the crushing plant, according to the statement.
Cargill is currently expanding the plant from 3,000 tonnes to 6,000 tonnes of daily crushing capacity.
The statement added that the plant will be able to produce higher-protein soybean meal while reducing the need for soybean meal imports into Egypt.
Roger Janson, head of Cargill’s grain and oilseed business in Europe, the Middle Eeast, and Africa (EMEA), said that the joint venture brings together Cargill and ADM’s operational and commercial expertise to meet growing local demand for higher-quality feed ingredients.
Janson added that this deal is part of the company’s strategy to grow Cargill’s business across Egypt and the North Africa region and helps it better serve customers in the market with safe, affordable, and nutritious food.
For his part, John Grossmann, ADM’s president of EMEA oilseeds crush, said that ADM is expanding its geographic footprint in regions of expanding growth, noting that 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 utilising an already existing facility and infrastructure, this joint venture would be perfectly positioned to efficiently meet growing Egyptian demand,” added Grossmann.
The statement noted that the joint venture will be managed as a standalone 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 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 statement read.
The deal, which is not yet complete, is subject to regulatory review. The companies hope to formally launch the joint venture in mid-2018, according to the statement.