ADM Milling to buy six flour mills from ABF

by Emily Buckley
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LONDON — Associated British Foods PLC (ABF) has reached agreement, subject to approval from the U.K. Office of Fair Trading, to sell part of its Allied Mills business to ADM Milling Limited, a wholly owned subsidiary of Archer Daniels Midland Company (ADM).

Under this agreement, Allinson Queens Mill, Castleford; Chancelot Mill, Edinburgh; Healings Flour Mill, Tewkesbury; Kings Mill, Knottingley; Seaforth Flour Mill, Liverpool; The Sovereign Flour Mill, Corby; and the offices at Brentwood will transfer to ADM.

The Sunblest flour mill in Tilbury, Essex, with its state-of-the-art semolina plant, the Coronet Mill in Manchester, one of Europe’s largest flour mills, producing 750 tonnes of flour per 24 hours, and the James Neill flour mill, Belfast, will be retained within ABF and will focus on providing flour for group companies. Also retained will be the Special Products facility at Corby that boasts high-tech mixing and blending technology coupled with food technology facilities.

The parts of the business to be sold to ADM generated sales outside the ABF group from January to mid-September 2002 of U.S.$150 million and had net tangible assets of U.S.$65 million on September 14, 2002.

Mark Fairweather, who will report directly to George Weston, will lead the remaining Allied Mills business. Weston will become chief executive of the combined Allied Bakeries and Allied Mills businesses.

The Special Products facility at Corby will report into Mike O’Neill’s specialty food ingredients business, ABITEC, under Cereform.

Commenting on the announcement, ABF’s Chief Executive Peter Jackson, said, "The disposal of the British third party flour milling business leaves ABF with a very effective, integrated flour milling operation, streamlining flour supplies to Allied Bakeries in a very competitive market."

ADM is one of the world’s largest processors of wheat, maize, oilseeds and cocoa. ADM currently operates flour mills in the United States, Canada, the Caribbean and the United Kingdom. "We’re very pleased with the opportunity to strengthen our base in the U.K. with the addition of these six mills," said Paul B. Mulhollem, ADM president and chief operating officer. (See related story on page 34.)