Financial details of the sale with the subsidiary of Japan’s Zen-Noh Group were not disclosed, and the deal is subject to customary closing conditions and regulatory approvals, Bunge said.

Although the sale will significantly reduce the number of Bunge grain storage and handling assets in the U.S., Bunge said “certain supply agreements” with Zen-Noh will result in a “larger and stronger origination and distribution network.”

Before the sale, Bunge owned 158 grain storage facilities globally, according to regulatory filings.

Bunge will retain ownership of its bulk grain export terminal in Detrehan, Louisiana, and its jointly owned EGT Grain export terminal in Longview, Washington. It will also retain ownership of elevators in its Bunge-SCF Grain joint venture and elevators in Indiana that supply its Morristown soybean processing plant.

“This transaction will allow Bunge to operate more efficiently and re-invest in higher returning areas of the company while reducing costs and strengthening our balance sheet,” Bunge CEO Greg Heckman said in a news release.

Bunge has been cutting costs and shedding non-core assets in recent years as a sharp downturn in grain prices has squeezed margins for the two-century-old global agribusiness giant.

The company ended its 13-year ownership interest in an Iowa ethanol plant in January and sold its Brazilian margarine business in December.

Bunge’s Canadian business includes several oilseed crushing and refining plants and a joint venture stake in grain handler G3 Canada with Saudi agrifood firm SALIC.

Zen-Noh, a Japanese ag co-operatives’ group, has a relatively limited Canadian market presence, including a joint venture stake in Prairie grain handler GrainsConnect Canada with Australian handler GrainCorp.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago. Includes files from Glacier FarmMedia Network staff.

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GrainsConnect Canada announced plans Thursday to build a fourth Prairie high-throughput grain terminal on Canadian National (CN) Railway track at Huxley, Alta., about 75 km southeast of Red Deer.

The company — which expects to open its first terminal this fall at Maymont, Sask., about 45 km southeast of North Battleford — said the Huxley operation will include 35,000 tonnes of storage capacity and a rail car loop to load 134 cars in “under 14” hours.

Construction, pending “necessary approvals,” is expected to start “mid-year” for completion in 2019, the company said.

“We will have two sites in Saskatchewan and two in Alberta, offering choice and access to one of the most efficient supply chains to the West Coast,” GrainsConnect president Warren Stow said in a release.

“There has been strong grower interest in this area for more choice and we are excited to deliver a state of the site facility to the region.”

The nearest licensed primary grain elevator is Viterra’s 42,150-tonne capacity terminal on CN track at Trochu, about 12 km south of Huxley.

Other nearby elevators outside Red Deer include Louis Dreyfus’ site at Joffre and Richardson Pioneer’s at Olds, both also about 75 km away from Huxley.

GrainsConnect said its Huxley site will be the first in the region with a 134-car loop, “increasing efficiency and reliability to growers in the area.”

GrainsConnect’s other terminal sites are near Wilkie, Sask., about 55 km southwest of North Battleford, to open in mid-2018, and near Vegreville, Alta., to open in late 2018. — AGCanada.com Network

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InVivo, a grouping of 220 agricultural co-operatives and one of the largest exporters of French cereals, has focused on overseas growth under a reorganization launched two years ago by CEO Thierry Blandinieres.

In grain trading, Quebec’s La Coop Federee and Australia’s CBH Group have joined a co-operative alliance previously created by InVivo with Aca in Argentina and Zen-noh in Japan, Blandinieres said during a press presentation.

The network is focused on knowledge sharing to allow the cooperatives to have similar market expertise to multinational traders, but the partners are now also discussing the possibility of jointly negotiating freight terms, he said.

The co-operative alliance, as well as a separate partnership with Archer Daniels Midland covering the Black Sea region, was also helping InVivo to source grain overseas, which was crucial this season after a poor French harvest, he added.

In France, InVivo distributes about 40 per cent of crop inputs such as pesticides and fertilizers sold in the European Union’s biggest grain producer, but wants to reinforce its position as the world’s leading crop chemical makers consolidate through multi-billion merger deals.

The French group aims to expand joint procurement of crop chemicals through Novafield, a European alliance of cooperatives, and develop its own offer via Life Scientific, a joint venture in Ireland based on molecules that are no longer patented.

InVivo already buys about 10 per cent of its crop inputs through Novafield and this has supported a 30 million-euro (C$43.77 million) gain for its farm supplies division over the past five years, Blandinieres said.

The group said its total sales reached 6.4 billion euros in its 2015-16 year to June 30, up from 5.7 billion the previous year.

— Reporting for Reuters by Gus Trompiz in Paris.

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Tokyo-based Zen-Noh Grain Corp. (ZGC) and Sydney-based GrainCorp on Monday announced plans to build new grain origination sites in Alberta and Saskatchewan, through a 50/50 Canadian-incorporated joint venture to be based in Calgary.

GrainCorp said the companies are now “actively looking” at sites in both provinces for what will be “a fully integrated supply chain for the origination, marketing, storage, handling, distribution and exporting of Canadian grain and oilseed.”

The joint venture, dubbed GrainsConnect Canada, is budgeted for $120 million in its start-up phase, including construction and commissioning at its yet-to-be-chosen sites.

GrainCorp said it will put up $30 million from its own cash and debt facilities for that phase; Australian media report that ZGC will put up another $30 million. The joint venture will source the remaining $60 million from financial institutions, GrainCorp said.

Pending due diligence on potential sites and the customary regulatory and planning approvals, construction is to be staged “progressively” from the latter half of fiscal 2016 through to the end of fiscal 2018, GrainCorp said.

GrainsConnect considers Alberta and Saskatchewan “attractive” for their “reliability and high quality of grain production,” but the joint venture would consider increasing its footprint as the business grows, a GrainCorp spokesman said.

“This is an exciting opportunity to partner with one of the world’s most respected agricultural organizations and deepen our relationships with our international customers by growing our grain origination capability,” GrainCorp CEO Mark Palmquist said in Monday’s release.

The joint venture, he said, “will leverage GrainCorp’s existing Canadian footprint, including our Calgary marketing office and (Canada Malting) operations, plus Zen-Noh Group’s significant experience and customer relationships in exporting agricultural commodities from North America to Japan and other Asian destinations.”

GrainCorp said its existing marketing office in Calgary “will support the joint venture to manage the origination process with Canadian grain growers.” The joint venture is also expected to make use of the “close grower relationships” developed by Canada Malting.

The new business “also benefits grain and oilseed growers in the Canadian Prairies, by providing an independent and alternative pathway to market,” Palmquist said.

Calgary-based Canada Malting is GrainCorp’s current bricks-and-mortar stake in Prairie grain handling and processing. GrainCorp acquired the 113-year-old business in 2009, when it took over United Malt Holdings.

With capacity to produce 450,000 tonnes of malt per year — which makes it the biggest malting company in the country — Canada Malting has malt plants at Calgary, Montreal and Thunder Bay, plus 10 Prairie barley elevators.

ZGC is also already a known player in Canadian grain marketing. Since 2012 it’s operated a joint venture, CZL Ltd., with U.S. agrifood co-op CHS Inc., sourcing Canadian, U.S. and Australian wheat and barley for the Japanese market. A GrainCorp spokesman said the CZL joint venture will not limit the catchment area for GrainsConnect.

ZGC CEO John Williams, in GrainCorp’s release Monday, described the new joint venture as “a good opportunity to grow our business in Canada with a trusted partner” and “to strengthen further our ability to supply our customers in Japan and Asia.”

“Anything that increases competition for our grain is always welcome news,” Jim Wickett, a Rosetown, Sask.-area grower and chair of the Western Canadian Wheat Growers, said Monday in a separate release.

The Wheat Growers, one of the grower groups that lobbied for the end of the Canadian Wheat Board’s single marketing desk for Prairie wheat and barley in 2012, said the GrainsConnect announcement marks “another positive result” from that deregulation.

“The construction of new elevators on the Prairies will allow farmers to move more grain off the farm at harvest time, and should strengthen grain bids,” the group said, and will put grain “that much closer to being in an export-ready position, whether that grain ultimately moves through Canadian or U.S. ports.”

However, the group added, “increasing rail capacity will be important to ensuring farmers see the full benefits of this new investment.”

Discussions are already underway on “rail and port access” for the joint venture, GrainCorp said Monday. — AGCanada.com Network

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