Bunge acquires Grupo Minsa's US corn milling business, following ADM takeover approach
31 Jan 2018 --- Bunge has bolstered its food and ingredients business in the US with the acquisition of Minsa Corporation, a wholly-owned US subsidiary of Grupo Minsa S.A.B. de C.V., valued at US$75 million. The move comes just days after Bunge was linked with a takeover approach by ADM that would combine two of the world's biggest grain trading houses.
The acquisition by the North American operating arm of the global agribusiness and food company includes corn flour mills in Red Oak, Iowa and Muleshoe, Texas.
Corn masa, the primary ingredient for tortillas, tortilla chips, and other foods, is a key growth category in packaged food and foodservice channels, with sales projected to steadily increase.
And this latest move by the US grain merchant taps into the growing market and comes after competitor Archer Daniels Midland (ADM) reportedly approached Bunge about a potential takeover earlier this month.
The takeover could combine two of the world's four largest grain trading houses and ADM's approach comes just months after commodities trader Glencore proposed a partnership with Bunge, setting the scene for a bidding war.
However, neither ADM or Bunge have officially commented on a possible takeover.
Growing demand for tortillas, tortilla chips and other foods
Describing the purchase as “an important strategic step” for Bunge’s food and ingredients unit, president of Bunge North America, Todd Bastean, said the move will make the company a US leader in producing corn flour for tortillas.
“This acquisition is an important strategic step to strengthen our Food & Ingredients business in the US, and could provide additional growth opportunities for the company's other regions,” he said.
“These assets, together with our existing plant in Worthington, Indiana, make Bunge a leading US producer of corn masa, a product that is experiencing significant growth not only here, but around the globe.”
The acquisition creates scale in Bunge's masa milling capacity and brings additional products and capabilities including specialty products such as organic and non-GMO masa and on-trend colors such as blue and red corn.
It comes at a time when agricultural traders are looking at ways to diversify into other sectors, like food ingredients, partly due to a global grains glut that has put pressure on prices.
Production boost
In addition to traditional bulk, tote and 50-pound bags used by food manufacturers and food service customers, both the Iowa and Texas locations can produce one kilo/2.2 pound packages commonly sold by retailers under their own store brands.
“With additional locations throughout the US, we will be better able to provide customers with a high-quality, reliable supply of products nationwide,” added Daniel Maldonado, managing director, Bunge Milling.
“We look forward to partnering with customers to help build their brands and using our strong innovation capabilities to further support them in meeting evolving consumer needs with an on-trend portfolio.”
In addition to a full line of masa products, Bunge's portfolio of shortenings and oils makes it the only major supplier of all key ingredients used to manufacture tortillas and related products.
By Gaynor Selby
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