Thin Margins Get Crop Giants Working Together
Consolidation is ‘easier said than done,’ ADM source says
For years the agriculture industry has been expecting a wave of consolidation that just hasn’t come, reports Bloomberg.
To battle razor-thin margins, the world’s top crop traders have come up with a new strategy: working together.
Rivals Archer-Daniels-Midland Co. and Cargill Inc. now have a soybean joint venture in Egypt and recently swapped grain elevators in the U.S. Midwest.
The two firms, along with Bunge Ltd., Louis Dreyfus Co., Glencore Plc and China’s Cofco International Ltd. are also teaming up in a blockchain technology project that will streamline shipping transactions and reduce costs.
“Consolidation is easier said than done, and there aren’t many large companies with which you can do a large consolidation, so what we’ve been working on is a lot of joint ventures and alliances," says Ismael Roig, ADM’s president for Europe, Middle East and Africa, said Wednesday at the Global Grain conference in Geneva.
Read the full report at Bloomberg.