The following highlights 10 of the top stories covered by the editors of World-Grain.com during 2017.
Glencore, Bunge talks at standstill
Glencore plc in mid-October reached a standstill agreement that, at least in the short term, prevents it from making a hostile bid for Bunge Ltd., according to an article in the Wall Street Journal. Citing sources familiar with the situation, the WSJ indicated that the news raises the possibility that Glencore is planning to renew its effort to acquire Bunge.
Glencore, a Barr, Switzerland-based miner and commodities trader, made a takeover approach for White Plains, New York, U.S.-based Bunge in mid-May. At that time, Glencore called it an “informal approach,” and said that “discussion may or may not materialize and there is no certainty that any transaction will occur.”
Bunge, meanwhile, said that it was “not engaged in business combination discussions with Glencore Agriculture Limited or Glencore plc.” The company added that it was “committed to continuing to execute its global agri-foods strategy and pursuing opportunities for driving growth and value creation.”
Deadly explosion rocks Didion Milling
Five employees died as a result of a May 31 explosion at Didion Milling Co.’s plant in Cambria, Wisconsin, U.S.
The explosion occurred in the corn mill, not the adjacent ethanol plant that Didion Milling also owns. The company restarted operations in August at the site’s ethanol plant.
In December, Didion said it was contesting $1.8 million in fines that were filed by the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA).
COFCO acquires Nidera
COFCO International on Feb. 28 completed the acquisition of the remaining shares in Nidera Capital B.V., giving COFCO full ownership of two global agribusinesses: COFCO Agri, formerly known as Noble Agri Ltd., and Nidera.
With the closing of the transaction, COFCO named Jingtao (Johnny) Chi as chief executive officer of Nidera. He succeeded Dierk Overheu, who announced his retirement effective upon the closing. Overheu had been with Nidera since May 2016.
||| Next Page: Gavilon launches 2018 Producers' Edge Program |||
Gavilon launches 2018 Producers’ Edge Program
Gavilon Grain, LLC in mid-November launched its 2018 Producers’ Edge Program, Gavilon’s proprietary grain marketing solution for farmers and producers, with a newly expanded team of analysts. Producers’ Edge is an ag risk management program that helps producers reduce the worry in grain marketing by moving the complexity of marketing and price movement to the company’s analysts.
Handling more than 350 million bushels of grain per year, Gavilon leverages its in-depth knowledge and experience in developing this program to help farmers diversify risk. The Producers’ Edge program is backed by Gavilon’s local representatives, experienced market analysts and operations team to provide support and information.
Additionally, Producers’ Edge program customers have access to the web app, myGavilon, which provides transparency in performance and pricing. The app allows users to review Gavilon’s past performance before getting started, and monitor current performance and pricing in the myGavilon app.
E. coli outbreak linked to flour in Canada
An outbreak of Escherichia coli, called E. coli 0121, was linked to Robin Hood all-purpose flour, original, the Public Health Agency of Canada said March 28. The Canadian Food Inspection Agency issued a food recall warning advising Canadians of the recalled product, which has been distributed in British Columbia, Alberta, Saskatchewan and Manitoba.
By March 28, 25 cases of E. coli 0121 with a matching genetic fingerprint were reported in the four Canadian provinces of British Columbia (12), Saskatchewan (4), Alberta (4), and Newfoundland and Labrador (5). Six people were hospitalized. The illness onset dates range from November 2016 to late February 2017.
In May, the recall had been expanded to include Smucker Foods of Canada Corp., a subsidiary of The J.M. Smucker Co.
Smucker said the affected product was packaged in 20-pound paper bags and was distributed across the United States to 19 distributors and 2 small retailers. No other Smucker Foods of Canada products distributed in the United States were affected by the recall, the company said.
CHS closes three facilities
CHS, Inc. on Dec. 1 said it has closedthree U.S. facilities as part of its effort to restore financial flexibility. The closings include soy processing plants in Hutchinson, Kansas, U.S., and Creston, Iowa, U.S., as well as an Innovation and Technology Center in Eagan, Minnesota, U.S.
“CHS will continue to focus on operations which are more closely aligned with other CHS commodity-based core businesses,” the company said. “CHS remains committed to helping its owners strengthen and grow their operations.”
CHS’s statement echoes comments made in July by chief executive officer Jay Debertin, who outlined five key areas of focus for the cooperative. One of the areas of focus is to fine-tune existing businesses and processes.
Checkoff program in consideration
In what could lead to an unprecedented expansion in product promotion activity for grain-based foods, millers and bakers in mid-November initiated a feasibility study to consider the launch of a checkoff program.
If approved such a program could elevate industry spending from $2.7 million a year, the current annual budget of the Grain Foods Foundation, to $18 million or even significantly more (judging by other existing checkoff programs). The feasibility study is being conducted by the GFF and is expected to last for several months.
Funded by industry, checkoff programs are designed to expand market share and increase revenue. The programs are overseen by the U.S. Department of Agriculture, as authorized by Congress, and once approved, require industry-wide contributions for activities aimed at promoting the industry.
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Pipeline Foods enters market with a flourish
Pipeline Foods, LLC in early September launched its global operations designed to develop sustainable supply chains in agriculture with a focus on non-bioengineered/non-GMO and organic grains, oilseeds and ingredients for food and feed. The company also will provide professional expertise to farmers and food companies and wants to partner with like-minded individuals and organizations.
Subsequently, the company made headlines by acquiring grain elevators in Canada and North Dakota, and launching a farm profit program. Pipeline also broke ground on a North Dakota grain terminal in mid-November.
Mexico’s largest miller continues to expand
Photos courtesy of Grupo Timex.
Making good on its stated goal of “providing personalized and agile service to all its clients,” Grupo Trimex has become the largest milling company in Mexico.
“The market share has been achieved thanks to the strategy and vision of the group, as the company has experienced constant growth each year,” said Eric Vandebrouck, manufacturing manager of Grupo Trimex. “This strategy also includes the expansion of its mills.”
Currently, the company operates 13 mills in Mexico. The use of its installed capacity varies between 85% and 95%, depending on the time of year, the needs of the market and of each mill. Production is currently divided into 25% bulk and 75% retail, Vandebrouck said.
Cargill planning major investments in Brazil, Egypt
A consortium that includes Cargill, Archer Daniels Midland Co., Bunge Ltd. and Amaggi is in discussion to bid for a $4.3 billion railway project that would bring together grain-growing regions in central Brazil with northern ports, according to a report from Reuters in December.
Luiz Pretti, president of Cargill in Brazil, discussed the Ferrogrão railway project with Reuters on the sidelines of an American Chambers of Commerce event in Sao Paolo.
Once completed, the railway is projected to be able to accommodate the transport of up to 20 million tonnes of grain per year by 2025 and will cut freight costs by 40%.
Meanwhile, in February, reports surfaced that Cargill plans to invest millions in Egypt to develop projects in agriculture, food and grain storage, and transportation logistics, said Tarek Kabil, Egypt’s Minister of Industry and Trade.
In a Feb. 12 article in Daily News Egypt, details emerged of a meeting between Kabil and Roger Johnson, Cargill’s regional director for Europe and the Middle East, to discuss the company’s projects in Egypt.
Daily News Egypt said indications are that Cargill intends to develop its grain storage projects in Daqahleya port with new investments of $10 million, which will be used to add storage capacity of 42,000 tonnes. Cargill also intends to conduct more investments in Egypt to boost its current investments of $300 million.