Archer Daniels Midland (ADM) announced the intended purchase Monday, for an undisclosed amount. The Israeli company focuses on the import and distribution of agricultural feed products.
There was interest in developing a footprint in the region because it may offers new opportunities, said ADM.
The privately owned, Israeli company trades in corn by-products and other grain products, said ADM. It also operates a 45,000 metric ton storage facility on the Port of Ashdod and offers a “significant and diversified” customer population within Israel.
“This transaction will give ADM a strategic entry into the Israeli market via a well-known and respected partner,” Jackie Anderson, ADM spokesperson, told us.
The deal, however, remains subject to review in Israel, the company said. However, it is anticipated that that the process should be completed in the next few months.
“The deal requires regulatory approval in Israel,” said Anderson. “We respect the regulatory process and are focused on working to ensure the deal meets all appropriate approvals.”
New growth opportunities
The Chicago-based company has worked with Industries Centers previously, said ADM. At that point, the Israeli-company helped import products and it continues to offer an entry point into the established Israeli market.
The new arrangement is expected to offer customers an array of products including soybean meal, grains and feed ingredients, said Joe Taets, president of ADM’s agricultural services business unit. “With this investment, we are continuing to expand and enhance our core value chain, including our ability to deliver direct to the customer,” he added.
“Our goal is for ADM and IC [Industries Centers] to combine their capabilities and help to grow this business – whether through increasing market share in feed products, or moving new products such as grains and soybean meal through the IC system,” said Anderson. “This is a competitive market, and combining the vast resources of ADM with the local expertise of IC will provide new opportunities for growth and competitive advantages.”
The acquisition offers ADM a chance to reach new customers and bring in an array of products, said Taets. “It also represents a further expansion of our destination marketing capabilities, which remain a strategic priority as we work to enhance shareholder returns by extending our value chain to the end customer,” he added.
Also in the Middle Eastern region, ADM runs a representative office offering feed stuffs and grains to the market in Egypt, the company said. It also has a 50-50 venture there, ADM Medsofts, which provides commodity merchandising, transportation and delivery services.
ADM owns a wet mill production plant in southern Turkey. That facility generates several products including ones for animal nutrition.