Increasing Brazilian grain production: Bunge to acquire 30 percent of Agrofel
16 Sep 2019 --- Bunge is set to increase its grain origination capacity in Brazil through an agreement to buy 30 percent of Agrofel Grãos e Insumos, an agricultural inputs reseller in Rio Grande do Sul. This investment is aligned with Bunge’s strategy to focus on its core businesses but is still to be approved by the Brazilian Antitrust Authority. The other companies of Ferrarin Group – which Agrofel is part of – are not part of the deal. Further financial details were not disclosed.
“Combining Agrofel’s broad relationship and expertise with local farmers and our logistics and existing origination capabilities in Brazil will be ideal for us to increase our origination capillarity with farmers in of one of the most important soybean-growing states,” says Raúl Padilla, President of Bunge’s Global Operations.
Agrofel highlights that the merger is the result of a partnership based on trust. “We share the same values and principles in terms of ethics and sustainable production, and we believe that this transaction will maximize opportunities for both companies to expand their business in Rio Grande do Sul. Bunge is experienced in risk management and has full logistic capacity, and counting on that expertise takes us to the next level in Brazil’s grains market,” says Wilson Ferrarin, Agrofel’s Board Chairman.
Agrofel annually sources over one million metric tons of grains, including soybeans, corn and wheat. The reseller has its origination strategy aimed at 15,000 farmers and is supported by 38 units. These include warehouses and shops, with a combined static capacity of almost 450,000 metric tons, in addition to 470 professionals.
Bunge recently announced that its second-quarter profits were boosted by its investment in plant-based burger maker Beyond Meat, with its results including US$135 million net unrealized gain on Bunge Ventures’ stake in the pioneering meat substitutes producer. The company is also relocating its global headquarters from White Plains, New York, to the St. Louis, Missouri, metropolitan area in a move to leverage shared capabilities and enhance collaboration.
By Katherine Durrell
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