World Grain News: Gruma agrees to buy International Multifoods' milling and commercial food group in Venezuela
September 01, 1999
by Teresa Acklin
MONTERREY, MEXICO — Gruma S.A. de C.V., the world's largest maize flour miller, has agreed to purchase Molinos Nacionales C.A. (Monaca), the discontinued Venezuelan consumer and commercial foods operations of International Multifoods Corp., Minneapolis, Minnesota, U.S., for an estimated U.S.$76.5 million.
Gruma said the acquisition "will bring great strategic benefits," bolstering its position in maize flour milling in Venezuela. The acquisition marks its first involvement in Venezuelan wheat flour milling.
Monaca, which opened its first flour mill in 1958 in the seaport city of Puerto Cabello, today operates 16 mills and other processing plants and 11 warehouses in Venezuela. The company in 1998 was the leading producer of wheat flour for domestic use, supplying about 43% of the volume for this market, and was the second-largest producer of maize flour in Venezuela, with a market share of about 22%, Gruma said.
Gruma currently has annual maize flour production volume of approximately 70,000 tonnes in Venezuela. Monaca's total annual production was placed at 800,000 tonnes, of which 44% was in wheat flour (352,000 tonnes), 39% in pre-cooked maize flour (312,000 tonnes) and 17% (136,000 tonnes) in other products, including rice and oats.
Monaca's product line includes consumer wheat flour under the Robin Hood brand name, consumer maize flour under the Juana brand and oat cereal under the Lassie brand. The company, headquartered in Caracas, also supplies flour and commercial baking mixes under the Robin Hood brand to food service operators and in-store, retail and wholesale bakers in Venezuela.
Under the definitive purchase agreement, Gruma will issue a note in the amount of approximately U.S.$18.5 million and assume about U.S.$58 million in debt for the stock of Molinos Nacionales C.A.
Multifoods in June sold the agriculture and animal feed portion of the Venezuelan business, Alimentos Super-S, C.A., to La Caridad Group, a Venezuelan poultry producer, for U.S.$27.5 million.