US Farm Giant ADM Buys Soyabean Plant In India.

US agro giant ADM is believed to have acquired a 1,000-tonne per day (tpd) soyabean crushing plant near Nagpur from Madhur Agro Proteins for an undisclosed sum, according to two persons familiar with the development. It would mark the foray of the world's largest ethanol and biodiesel producer into India as an individual company.

Asked to confirm the development, an ADM spokeperson said, "We don't have any information about acquisitions to provide to you at this time, but will keep you updated when we have news to share." A phone call and a text message to Ratan Lunawat, owner of the unlisted Madhur Agro, asking whether the soyabean crushing plant has been sold to ADM, remained unanswered.

"ADM has purchased the 1000-tpd soyabean crushing plant belonging to Madhur Agro," said one of the persons with knowledge of the deal. The other person said the acquisition could be a step towards ADM owning its own edible oil brand in India, where the company currently runs its business through a joint venture with the Tinna Group , Tinna Oils & Chemicals, which was formed in 1998, according to ADM's web site. The prinicipal business of the JV consists of processing oilseeds into edible oils, animal feeds and feed ingredients, and biodiesel fuel.

Analysts feel that emerging markets like India and China are attractive propositions for multinational agri giants because of growing food consumption on the back of rising incomes. "International food companies are evincing interest in Indian brands or manufacturing facilities," said Naresh Kothari, president, Edelweiss Capital . "Privately-held global food producer Cargill has recently inked an agreement with Marico to acquire its sunflower oil brand Sweekar. There are other multinationals as well, who are in different stages of discussions with several Indian brands for acquisitions."

Atul Chaturvedi, CEO of Adani Wilmar, peg the country's edible oil consumption at 15.5-15.8 million tonne a year, out of which around 9 million tonne is imported. Of this 9 mt, soya oil accounts for 20% to 25% while the rest is managed by palm oil import.
ADM's reported acquisition in India is viewed as the US-based company's desire to ramp up its presence in a country, which is a major edible oils consumer. "Unlike Cargill, which has been present in India for some time now and has its own brands like Gemini, NatureFresh and Rath here, ADM has been a late starter and the purchase of the plant is reflective of its growing interest in India and Asia," he said.

ADM operates more than 240 processing plants and more than 330 sourcing facilities in more than 60 countries on six continents. Net sales for the fiscal year ended June 30, 2010, were $62 billion.

Source : economictimes.indiatimes.com