ADM to buy Moroccan corn mill to boost sweetener footprint

Source: By Reuters • Posted: Wednesday, February 10, 2016

Archer Daniels Midland Co (ADM.N), the U.S. agribusiness group, said it would buy a corn wet mill in Morocco from Tate & Lyle (TATE.L) in the latest effort to boost its footprint in the sweetener and starch market after expanding in Eastern Europe last year.

Terms of the deal announced on Monday were not disclosed. The plant in Casablanca, Morocco, would be ADM’s first for corn processing in Africa. ADM did not disclose the size of the plant but expects the regional market for starches and sweeteners to grow by 8 percent in the coming years, spokesperson Jackie Anderson said.

Chicago-based ADM has been shifting its focus on higher-margin products like corn syrup. ADM last year purchased some assets from its joint venture with Tate & Lyle. It took full ownership of corn wet mills in Bulgaria and Turkey and a 50 percent stake in one in Hungary late last year, bringing its global corn processing capacity then to about 3 million bushels per day.

The corn wet mill in Morocco is the leading sweetener and starch supplier in a country expected to see substantial growth in demand in coming years, Chris Cuddy, ADM’s president of the corn processing business, said in a statement on Monday.

The plant is positioned to serve both Morocco and Mediterranean export markets, Cuddy said.

ADM expected the acquisition to close during the first half of the year, subject to regulatory approval.

Global sweetener producers and traders have been eyeing growth in emerging markets in Asia and Africa as consumption stagnates in other regions like the United States and Western Europe.

Last week, ADM said it was considering a sale, partnership or other options for some U.S. dry mill plants, which primarily produce ethanol and animal feed, due to poor margins and low energy prices.

(Reporting by Chris Prentice in New York and Karl Plume in Chicago; Editing by Lisa Von Ahn and Jeffrey Benkoe)