February 5, 2015
Glencore buys off 50% of ADM grain terminal in northern Brazil
Glencore plc, an Anglo-Swiss commodity trading company, will acquire 50% of a Brazilian grain export terminal owned by Archer Daniels Midland Company (ADM).
The transaction is expected to conclude during the first half of 2015.
The terminal is located in Barcarena, in the northern Brazilian state of Pará.
The joint venture is expected to drive the terminal's capacity to six million tonnes from a previous 1.5 million tonnes.
"By sharing the investment with a partner, we are able to do all of this in a cost- and capital-efficient way."
Indeed, in the light of rising agricultural production in northern and western Brazil as well as well as a future expansion of the Panama Canal, Valmor Schaffer, the president of ADM South America, hopes that the Barcarena port will help ADM to better serve markets in Brazil, Europe, Asia and other regions.
The Barcarena terminal reflects the popularity of northern Brazilian ports; these tend to be more convenient and cheaper facilities to receive exports from Mato Grosso, Brazil's key soybean-producing state, according to Reuters.
Other major corporations involved in northern Brazil's export operations include Bunge and Cargill.
Meanwhile, the southern ports of Santos and Paranagua, where Brazil mainly exports crops through, are becoming congested, thus diverting some deliveries to northern terminals instead.
And more business could be heading for those ports; shipments could grow to 15 million tonnes by 2020, compared to 3-4 million tonnes last year, said a Brazilian official.
In addition, total corn and soybean exports for Brazil may reach 65 million tonnes this season.