Gavilon Group CEO Leading Hunt for U.S. Grain Assets
Marubeni’s Gavilon Group is seeking out U.S. grain assets that will build-out the company’s capacity across the U.S. west and south, according to Bloomberg.
A three-year long rout in the grain sector has challenged margins for soybean, corn, and wheat farmers, and has caused management shifts and restructuring at multiple traders including Cargill, The Andersons, The Scoular Co. and Gavilon. But, the slump and widespread restructuring also present an opportunity for those with long-term goals.
Gavilon’s newly appointed CEO, Lewis Batchelder is capitalizing on this low cycle in the grain sector, and is spearheading a plan for strategic growth for the group, targeting assets that will support the expansion of its crop originating, storing, and transporting capacities including elevators across Montana and the Dakotas that will support a growth in sales to California, and greater West Coast export volumes. The group is also considering the acquisition of terminals located on the Mississippi River to facilitate an uptick in exports through the Gulf of Mexico, said Batchelder. However, although commodity prices have plummeted in recent years, the price of grain assets have not seemed to follow suit. What has happened though, is a drop in interest in U.S. assets from overseas buyers.
The company has not set a deal size, and there are no plans in place for Gavilon to expand into processing or milling independently, but the company “is open to joint ventures with companies that own such facilities to supply raw materials or market some of their products,” Batchelder told Bloomberg.