Financial details of the sale to the subsidiary of Japan’s Zen-Noh Group were not disclosed.
Bunge said the move would allow it to operate more efficiently and reinvest in higher returning areas of the company while reducing costs and strengthening its balance sheet, stressing that it will be able to access a larger and stronger origination and distribution network through Zen-Noh, leveraging certain supply arrangements, to supply US farmers and global export customers.
Greg Heckman, Bunge CEO, said the company would continue to be an industry leader in the US grain marketplace through global grain trading and distribution.
It has export terminals in Destrehan, Louisiana, which it is planning to expand, along with its and its export grain terminal, EGT, in the Pacific Northwest – in Longview, Washington. EGT is a joint venture between Bunge North America and ITOCHU International Inc., a US subsidiary of Japanese trading company ITOCHU Corp.
“We will also continue our strong presence in the soybean processing business and milling operations.”
In addition to the export terminals in Destrehan and the EGT joint venture, Bunge will retain ownership in Bunge-SCF Grain, Bunge’s joint venture with SCF, and the Bunge elevators in Indiana that supply Bunge’s soybean processing plant in Morristown.
Prior to this deal, Bunge had 158 grain storage facilities globally, as per regulatory filings.
Streamlining the portfolio
Given the trading uncertainty of the past few years, the company has been focusing on improving operational performance, streamlining its portfolio and increasing fiscal discipline. Its global competitiveness program, which got underway in 2017, is intended to provide a US$250m reduction in selling, general and administrative expense (SG&A) costs by the end of 2020.
In 2019, Bunge established a joint venture in sugar and bioenergy with BP, sold idled grain facilities in Eastern Europe, idled milling sites in Brazil and closed seven other grain facilities to improve capacity use in South America.