February 22, 2012
Archer Daniels Midland Company (ADM) and Wilmar International Limited on Monday (Feb 21) signed a memorandum of understanding on a strategic partnership in global fertiliser purchasing and distribution, global ocean freight operations, and tropical oils refining in Europe.
Collaborations between ADM and Wilmar began in the mid-1990s, when they jointly built a network of soy processing operations in China. Today, ADM owns a 16% equity stake in Wilmar. The companies have significant supplier relationships with each other.
According to the memorandum, the companies will collaborate on purchasing and distribution in the global fertiliser business. In ocean freight, they will partner to improve the utilisation and management of their shipping fleets, with each company initially contributing two ships to the effort. For tropical oil refining in Europe, they will work together to optimise refining capacity utilisation.
The memorandum of understanding is subject to the execution of definitive agreements with respect to the strategic partnership. ADM and Wilmar will look to finalise the definitive agreements over the next few months.
ADM Chairman and CEO Patricia Woertz said, "We have an excellent relationship with Wilmar's leadership, and we see Wilmar as a key partner, especially in our strategy to serve growing Asian demand for agricultural products. Our teams are currently working together on many projects, and we look forward to finding more opportunities to work with our friends and partners at Wilmar."
Kuok Khoon Hong, Wilmar's chairman and CEO, said, "Our long association with ADM and the ability of both companies to tap on each other's synergies, helped build our successful Asian operations. It is now the intention to extend that co-operation globally, initially in the areas outlined in our memorandum of understanding."
