May 1, 2006

Gold Kist Inc and ADM to form joint venture to supply corn for poultry feed

Gold Kist Inc announced Apr 27 that it intends to start a joint venture with Archer Daniels Midland Company (ADM) under which ADM's mid-west elevators would supply maize to Gold Kist's feed mills in the south.

The joint venture, in which each would hold a 50 percent interest, is expected to begin in August this year.

Gold Kist would be able to satisfy raw material needs for two of its facilities, and ADM will gain a year-round destination market.

ADM's three grain elevators are situated in areas in Illinois and Indiana where 241 million bushels of maize are produced a year. Maize from these elevators would supply maize to Gold Kist's Georgia and Florida poultry feed mills.

The joint venture provides Gold Kist with a guaranteed source and timely delivery of one-fifth of its maize requirements and also provide the company additional savings through negotiations for dedicated rail service, said Gold Kist CEO John Bekkers.

Lewis Batchelder, ADM senior vice-president of Grain and Transportation noted that through this joint venture, ADM would gain not only a reliable market for its grain, but also enhanced knowledge of the poultry feed market.