Cargill acquires Venezuela flour mill from Bunge International
January 01, 1999
by Teresa Acklin
MINNEAPOLIS Cargill Inc. in December acquired Grandes Molinos de Venezuela S.A. (Gramoven), the Venezuela consumer foods subsidiary of Bunge International Ltd.
A flour mill, a pasta plant and an edible oils plant, all located near Caracas, were included in the transaction.
Venezuela experienced considerable economic turmoil in 1998. Archer Daniels Midland Co. and International Multifoods Corp. agreed to and then canceled a sale of Multifoods' assets in Venezuela to ADM. In announcing that the transaction had fallen through, International Multifoods cited deterioration of the Venezuelan economy.
Alex B. Cory, assistant vice-president, dry milling, at Cargill, acknowledged the difficult economic situation in Venezuela. “A devaluation is likely, but we have managed through these kinds of situations before, and we believe we can manage through them in the future,” he said. “We already had significant oil, flour, rice and pasta businesses. We've been in Venezuela for a long time, and we plan to be there for a long time.”
According to Cargill, Gramoven is projected to achieve sales of U.S. $170 million in 1998. Mr. Cory estimated that Cargill already was the leading edible oil company in Venezuela, that the Cargill flour business there was about the same size as Gramoven's and that Cargill was slightly larger than Gramoven in pasta.