ADM Acquires First Wet Corn Mill on African Continent From Tate & Lyle
In a move to continue to expand its presence in the global sweetener and starch market, Archer Daniels Midland (ADM) announced it has agreed to acquire a Morocco-based wet corn mill from the UK’s Tate & Lyle.
The facility in Casablanca will be ADM’s first corn processing plant on the African continent, where the company expects the regional sweeteners and starches market to grow at a rate of 8% per year within the next few years, according to company spokesperson, Jackie Anderson, reports Reuters.
“The facility is the leading sweetener and starch supplier in a country that should see substantial demand growth in the coming years,” said Chris Cuddy, president of ADM’s Corn Processing business unit in a company statement. “It is well-positioned to serve Moroccan customers as well as Mediterranean export markets. This also represents an opportunity to help introduce a wider range of ADM food and feed ingredients to the Moroccan market.”
This transaction follows other corn milling asset deals between the two companies, when ADM acquired assets from its joint venture with Tate & Lyle including wet corn mills in Bulgaria and Turkey, and 50% ownership in a third mill located in Hungary.
As the sweeteners and starches market in developed countries begins to cool, traders and processors have been looking toward emerging markets, and Reuters reports that ADM has also announced that it is considering the sale or partnership for some of its U.S.-based dry mills which produce animal feed and ethanol because of low energy prices and low margins.
Indeed, margins have been playing a driving role in decisions within the sector, with ADM shifting its focus to higher-margin products like corn syrup and specialty ingredients, distancing itself from raw commodities.
The acquisition is scheduled to close in the first half of 2016, once all required regulatory approval are obtained.