Ingredion creates joint venture with Grupo Arcor to bolster South American operations
15 Feb 2021 --- Argentina-based food player Grupo Arcor and ingredient solutions provider Ingredion Incorporated have joined forces to create a joint venture (JV). It will leverage the two companies’ manufacturing expertise, complementary geographic footprints and commercial capabilities to build and scale ingredient solutions.
The JV also aims to broaden food and beverage ingredient offerings to customers in Argentina, Chile and Uruguay.
Arcor and Ingredion will hold a 51 percent and 49 percent stake, respectively. The JV will have a combined turnover of more than US$300 million, note the companies.
Arcor and Ingredion will hold a 51 percent and 49 percent stake, respectively. The joint venture will have a combined turnover of more than US$300 million.
Transferring operations
Arcor – the first global producer of hard candy and the main confectionery exporter in Argentina, Chile and Peru – will transfer its ingredient operations to the JV.
These include one manufacturing facility in Lules (province of Tucumán) and two manufacturing facilities in the Industrial Complex Arroyito (province of Córdoba).
Ingredion will transfer its Argentina, Chile and Uruguay operations to the JV. These include two Argentinian manufacturing facilities in the districts of Chacabuco and Baradero (province of Buenos Aires).
The manufacturing facilities produce value-added ingredients, such as glucose syrups, maltose, fructose, starch and maltodextrins, essential to the food, beverage and pharmaceutical industries.
Leveraging manufacturing expertise
The JV will be managed by a jointly appointed team of executives who will be responsible for integrating the combined operations to market, sell and manufacture ingredients within Argentina, Chile and Uruguay.
They will also further optimize the manufacturing network and support functions to create incremental shareholder value.
“We are pleased to announce our joint venture with Grupo Arcor,” says Jorge Elías, president of Ingredion’s South America region.
“We share similar values and are passionate about creating a world-class experience and offering ingredient solutions that deliver value for our customers. We look forward to combining Ingredion’s successful go-to-market team with our respective operations to strengthen our future for years to come,” he says.
Strategic alliance
“Our alliance with Ingredion is a major step in the process of growing and consolidating the Group’s ingredients business,” adds Modesto Magadan, Arcor’s Agribusiness General Manager.
“In this way, Grupo Arcor strengthens its position as a company that invests and grows in the country on a continuous basis through three business divisions: Consumer Product Goods (Confectionery, Chocolate, Cookies & Crackers and Food Products), Agribusiness and Packaging,” he continues.
The JV will operate on a stand-alone basis, and upon the closing of the transaction, Arcor will consolidate the business.
Ingredion – which turns grains, fruits, vegetables and other plant-based materials into value-added ingredient solutions – will account for its interest in the JV under the equity method of accounting. Hyperinflation accounting will be applied to equity income for Ingredion’s reporting purposes.
The JV has been approved by each company’s board of directors and is subject to regulatory approvals and customary closing conditions.
Edited by Gaynor Selby
