Cargill says acquisition will help accelerate its growth in Brazil
The proposed acquisition is a way for the company to speed its growth in Brazil, said Scott Ainslie, vice president and group director for Cargill Animal Nutrition.
“Integral’s capabilities in [minerals] and premixes will help accelerate Cargill’s growth in Brazil,” he told FeedNavigator. “Today, the majority of cattle herds in Brazil are grown in pasture, representing a large profit pool and many opportunities for Cargill.”
The agreement is anticipated to close in the next several months, but remains dependent upon regulatory approvals from the Administrative Council for Economic Defense (CADE), reported Cargill.
Deal details and work in Brazil
Integral Animal Nutrition has a 31 years of experience in the Brazilian market and has a reputation for supplying quality products and services, said Ainslie. The decision to purchase the company aligns with the Cargill’s strategy in Brazil and efforts to expand in the free choice mineral and feedlot segments of the market.
“This acquisition is an important part of Cargill’s animal nutrition growth strategy and its commitment to the Brazil beef industry, as well as, strengthening its distribution and go-to-market capabilities throughout the country,” he said.
The deal sees Cargill acquire 100% of Integral’s assets, the company said. These include a product production plant in Goianira, Goiás, Brazil along with about 100 employees and a range of products that includes Free Choice Minerals and premixes.
“Minerals not provided by feed can be easily and efficiently supplied with a simple mineral supplement,” said Ainslie. “FCM [Free Choice Minerals] can combine macro and micro minerals, vitamins and additives to supply the necessary feed for an optimal animal performance at pasture – Integral has a very strong team focused in these segments, so it is a natural fit to that part of our Brazil strategy.”
In addition to expanding Cargill’s capabilities for feedlots and grazing cattle, the deal is expected to allow the company to offer additional opportunities for customers, he said. And it should improve the company’s options for reaching cattle producers in the Midwestern region.
“Cargill’s animal nutrition business currently has three production facilities located in the south and southeast region of Brazil,” he said. “Integral will provide Cargill with deeper regional market knowledge, a manufacturing plant located in a strategic geographical location for beef cattle, with greater access to grains and logistics, and complementary sales capabilities.”
The company has generated a net revenue of about 80m reais or $25m per year, Cargill said.
Recent Cargill activity
Cargill also announced last week that it had signed a binding agreement to acquire US animal nutrition company, Diamond V.
The Cedar Rapids-headquartered firm produces feed additives aimed at improving immune function and digestive health. Diamond V, it said, has a global reputation for its work in research-proved immune support technologies.
Cargill said, at the time, that the acquisition was intended to improve its position in the global animal feed additive market.
That acquisition is expected to be completed in January 2018, but is still going through the regulatory approval and closing process, the company said.
