Bunge To Sell 35 U.S. Grain Elevators To Zen-Noh Grain Corporation
Bunge Ltd. announced April 21 that it has agreed to sell 35 U.S. interior elevators to Zen-Noh Grain Corporation. The completion of the sale is subject to customary closing conditions, including regulatory approval.
Zen-Noh Grain Corporation is a subsidiary of the National Federation of Agricultural Cooperative Associations of Japan (Zen-Noh). Zen-Noh said its affiliate, CGB Enterprises Inc., Covington, La., will operate the acquired facilities through its wholly owned subsidiary, Consolidated Grain & Barge Company. CGB currently operates more than 100 grain origination facilities in the United States.
“This transaction will allow Bunge to operate more efficiently and reinvest in higher returning areas of the company while reducing costs and strengthening our balance sheet,” said Greg Heckman, Bunge CEO. “Bunge will continue to be an industry leader in the U.S. grain marketplace through global grain trading and distribution with our export terminals in Destrehan, La., which we are expanding, and EGT, our joint venture in the Pacific Northwest. We will also continue our strong presence in the soybean processing business and milling operations.”
Through certain supply agreements, Bunge said it will be able to access a “larger and stronger origination and distribution network” through Zen-Noh to better serve American farmers and global export customers.
As grain prices have fallen sharply over the past several years, Bunge has been cutting costs and shedding non-core assets as the downturn has narrowed profit margins for the global agribusiness giant. The company ended its 13-year ownership interest in an Iowa ethanol plant in January and sold its Brazilian margarine business in December.
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 Bunge elevators in Indiana that directly support Bunge’s soybean processing plant in Morristown, Ind.