Archer Daniels Midland Company has signed an agreement to acquire a 50% stake in Medsofts Group, an Egypt-based privately held firm.
The transaction is expected to close in early 2016, following regulatory approvals.
This new 50-50 joint-venture (JV) will own and manage merchandising and supply chain operations, which comprise an international merchandising operation that annually handles over 1.5 million metric tonnes of grains, oilseeds and soft commodities intended for the Middle Eastern and North African markets; a grain distribution unit; and an inland logistics network that connects port operations to customers across Egypt.
The JV will own a 50% stake in Nile Stevedoring & Storage Co (NSSC), which operates a grain facility at the Port of Alexandria that comes with an annual discharge capacity of over two million metric tonnes, and has scope for future expansion due to additional land.
The companies are holding advanced due diligence to build an oilseed crush facility on this additional land.
ADM's agricultural services business unit president and EMEA operation president Joe Taets said: "This is an excellent addition that helps meet several key goals for strategic expansion in our Agricultural Services business; it further diversifies and expands our merchandising footprint, it helps us grow our logistics services, and it is another important enhancement of our destination marketing capabilities, which are getting us closer to our customers as we deliver products directly to them.
"We are continuing to invest in our global supply chain as we execute our plan for profitable growth."
This year, ADM opened distribution and merchandising offices in Central America, Asia and Africa, purchased a port and shipping agency in Brazil, announced its plans to expand port facilities in Argentina and Brazil; launched ARTCO Stevedoring; and acquired complete ownership of strategically-located terminals on the Black Sea.
"These investments are expanding our reach and capabilities, and delivering value to our customers and our shareholders alike," Taets added.
