ADM to buy Moroccan corn wet mill
Move will boost company's sweetener footprint in market
U.S. agribusiness Archer Daniels Midland on Monday said it would buy a Moroccan corn wet mill from Tate & Lyle in its latest effort to boost its footprint in the sweetener and starch market after expanding in Eastern Europe last year.
The plant in Casablanca, Morocco, is the leading sweetener and starch supplier in a country expected to see substantial growth in demand in coming years, Chris Cuddy, ADM’s president of the corn processing business, said in a statement.
The plant is well-positioned to serve Morocco and Mediterranean export markets, Cuddy said.
Global sweetener producers and traders have been eyeing growth in emerging markets in Asia and Africa as consumption stagnates in other regions like the United States and Western Europe.
ADM said it expected the acquisition to close during the first half of the year, subject to regulatory approval.
The Chicago-based company has been shifting its focus on higher-margin products like corn syrup.
ADM last year purchased some assets from its joint venture with Tate & Lyle. It took full ownership of corn wet mills in Bulgaria and Turkey and a 50 percent stake in one in Hungary late last year.
Last week, ADM said it was considering a sale, partnership or other options for some of its U.S. dry mill plants. The company operates a dry mill in Cedar Rapids that produces 420 million gallons of ethanol annually.
ADM on Feb. 2 reported a drop in quarterly profit on poor ethanol margins and depressed U.S. grain exports and cautioned that tough market conditions could persist in the year ahead.
Chief Executive Juan Luciano offered a gloomy outlook for at least the first half of 2016 due to weak energy prices, massive global grain stocks and a strong dollar that has made U.S. exports less competitive. The company will focus on running more efficiently, with an objective of $275 million of savings this year.