ADM and Louis Dreyfus reach agreement on joint venture involving U.S. elevators
November 01, 1993
by Teresa Acklin
DECATUR, ILLINOIS, U.S. Archer Daniels Midland Co. and Louis Dreyfus Corp. have reached an agreement to establish a joint venture under which ADM will assume operational control of most U.S. grain elevators owned by Louis Dreyfus Corp.
In effect, Louis Dreyfus has elected to withdraw from domestic grain merchandising in the United States while maintaining an active, if not an increased, role in world trading in grain, including exporting from the United States. Its grain headquarters will continue in Wilton, Connecticut, under the direction of Bruce Ritter, executive vice-president of Louis Dreyfus Corp. The Portland, Oregon, office also will continue, but its offices in Kansas City, Missouri, and other interior points will be closed.
Included in the joint venture transaction were 46 facilities in the United States, representing all of Dreyfus' elevators except for an export facility in Portland, its export elevator at Pascagoula, Mississippi, and a barge-loading facility on the Snake River in Washington. Facilities in Mexico and Canada also were not included, with Louis Dreyfus continuing to operate its large export grain elevator at Port Cartier, Quebec.
Grain storage capacity of Louis Dreyfus Corp. totals 2.1 million tonnes, according to the company, including 12 terminal elevators, two port facilities, nine river facilities, three subterminals and 23 country elevators.
Louis Dreyfus Corp. is a unit of the parent company that has its headquarters in Paris. The parent is a major multinational operator in various aspects of commodity and energy trading. In recent years, considerable emphasis has been given to expanding in the energy business, which has been an area of rapid growth for the company in recent years. By withdrawing from the U.S. domestic grain market, where it has been involved for many decades, Louis Dreyfus was expected to become more competitive in the international grain trade, where it is one of the largest global participants.