Molinos Rio de la Plata, Cargill to merge flour milling operations in Argentina

by Teresa Acklin
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   BUENOS AIRES, ARGENTINA- Cargill S.A. and Molinos Rio de la Plata S.A. have agreed to create a new company merging their flour milling operations in Argentina. The combined business will be the nation's largest flour milling company.

   John E. Geisler, president of Cargill Dry Milling, Minneapolis, Minnesota, U.S., said the alliance was a “great fit” for Cargill and guarantees Molinos a supply of raw material for its consumer food business.

   Under the agreement, Molinos Rio de la Plata will retain its U.S.$1.1-billion consumer food business, which includes the leading household flour brand in Argentina. A supply agreement under which Molinos will purchase flour from the joint venture is part of the arrangement.

   The new company, yet to be named, will include six Molinos flour mills in Argentina, its share in a mill in Paraguay and its industrial flour brand. Cargill's contribution to the new business will be four flour mills it owns and one it leases in Argentina and its industrial flour brands.

   Cargill will own 65% of the new company, and Molinos 35%. The joint venture will have total daily milling capacity of 5,500 tonnes of wheat (about 90,000 cwts of flour). Cargill entered the Argentine flour milling industry in 1995 by acquiring Minetti y Cia S.A., the nation's third-largest flour miller and fifth-largest pasta maker. Sales in 1993 of Minetti, a company established late in the 19th century, totaled $93.7 million. Another mill was acquired by Cargill in 1998 in the town of Resistencia near the Paraguay border.

   Beyond flour milling, Cargill has had a presence in Argentina since 1947. It is the country's leading exporter of agricultural products and is second-largest in terms of overall exports. In 1995, Cargill began a three-year, U.S.$130-million initiative in Argentina that included modernizing its oilseed crushing operations and constructing peanut shelling and malting capacity. A barge loading terminal was completed and a port facility for fertilizer discharging began operating in 1998.

   Molinos Rio de la Plata, founded in 1902 by Bunge & Born, operates in four divisions — flour, oils, dry products and frozen and refrigerated. In addition to flour, the flour division's products include pre-mixes and ready-to-eat baked products, such as pound cakes, madeleines, sponge cakes, lady fingers and fruit-filled dry cakes, bread crumbs, pasta and pizza.

   Molinos Rio de la Plata has 4,700 employees.