ADM, Cargill to launch Egyptian soybean joint venture

Agribusiness giants Archer Daniels Midland and Cargill are to launch an Egyptian-based joint venture that would include Cargill’s crushing facility in the country and a Swiss-based trading house to supply the facility with beans.

In a statement published Monday, the companies said it was an attempt to supply soymeal and soyoil and to undercut imports to the region.

“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 EMEA.

The venture would own and operate National Vegetable Oil Company’s 3,000-mt per day crusher in Borg Al-Arab that is currently 98%-owned by Cargill.

It would not include the company’s grain business and port terminal in Dekhelia or ADM’s Medsofts joint venture at Alexandria, the statement said.

The two businesses would continue to operate as separate entities in Egypt and in North Africa, the statement added.

“Egypt is an important market where demand for high-quality soybean meal and oil is outpacing the rest of the world,” said John Grossmann, ADM’s president of EMEA Oilseeds crush.

Besides the new joint venture’s plant, Egypt has another crusher at the same location – a 5,000-mt per day facility owned by Alex Seed Company.

Once expansion plans are realised, together the two crushers are expected to produce almost 75% of the nation’s 3.2 million mt per year demand, according to the USDA.

The deal is subject to regulatory review, although the companies said they hoped the joint venture would be launched by the middle of the year.