Chicago | Reuters — Agricultural commodities trader Bunge said on Tuesday it will sell 35 of its interior U.S. grain elevators to Zen-Noh Grain, dramatically reducing its grain origination network in the United States.
Financial details of the sale with the subsidiary of Japan’s Zen-Noh Group were not disclosed, and the deal is subject to customary closing conditions and regulatory approvals, Bunge said.
Although the sale will significantly reduce the number of Bunge grain storage and handling assets in the U.S., Bunge said “certain supply agreements” with Zen-Noh will result in a “larger and stronger origination and distribution network.”
Before the sale, Bunge owned 158 grain storage facilities globally, according to regulatory filings.
Bunge will retain ownership of its bulk grain export terminal in Detrehan, Louisiana, and its jointly owned EGT Grain export terminal in Longview, Washington. It will also retain ownership of elevators in its Bunge-SCF Grain joint venture and elevators in Indiana that supply its Morristown soybean processing plant.
“This transaction will allow Bunge to operate more efficiently and re-invest in higher returning areas of the company while reducing costs and strengthening our balance sheet,” Bunge CEO Greg Heckman said in a news release.
Bunge has been cutting costs and shedding non-core assets in recent years as a sharp downturn in grain prices has squeezed margins for the two-century-old 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.
Bunge’s Canadian business includes several oilseed crushing and refining plants and a joint venture stake in grain handler G3 Canada with Saudi agrifood firm SALIC.
Zen-Noh, a Japanese ag co-operatives’ group, has a relatively limited Canadian market presence, including a joint venture stake in Prairie grain handler GrainsConnect Canada with Australian handler GrainCorp.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago. Includes files from Glacier FarmMedia Network staff.