ADM, Cargill to form JV to run soy crushing facility in Borg El Arab
INVESTMENT WATCH- Half of the “ABCD” commodity giants are in bed together in Egypt as Archer Daniels Midland (ADM) partners with Cargill to run the latter’s soy crushing facility in Borg El Arab, the companies said in a joint press release on Monday. The pair will set up a joint venture that would own and operate the inventively named National Vegetable Oil Company soy crush facility along with related commercial and functional activities, including a separate Switzerland-based merchandising operation that would supply soybeans to the crush plant.
“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 for EMEA oilseeds crush. The agreement, which is not yet complete, is subject to regulatory review, said the statement.
Sound smart: Cargill had announced back in 2015 that it was investing USD 100 mn to double crushing capacity at the facility to 6,000 tonnes and construct an additional 42,000-tonne storage facility. The company said last September that it was investing USD 150 mn “over the coming period” without naming the project. The companies hope to formally launch the joint venture in mid-2018.
Advisors: Matouk Bassiouny served as local legal counsel to Cargill on the agreement, while Freshfields Bruckhaus Deringer was international counsel to the company.