Acquisition Expands Cargill’s Protein Business into Colombia

June 3, 2017

Cargill announced it has acquired Pollos El Bucanero SA – one of the leading chicken producers and meat processors in Colombia, for an undisclosed amount.

 

This deal represents Cargill’s first foray into Colombia’s protein production sector, and gains the company control of the top preferred supplier of products to retailers and food service customers across the country.

 

Pollos de Bucanero, which works with more than 170 Colombian farms, will operate as part of Cargill Protein Latin America, which include businesses in Costa Rica, Guatemala, Honduras, and NIcaragua. The business will be headed by general manager, Jorge Ivan Duque, who has spent the past 12 years working in the poultry sector in Colombia and across Central America. The deal will also add another 5,000 employees to Cargill’s workforce – bringing the number of its employees in Latin America to 35,000 across 200 sites in 14 countries.

 

“Cargill is starting a new stage in Colombia, under the Bucanero brand, which is recognized and preferred by millions of customers across the country,” said Duque. “Just like Cargill, this is a family business. We are confident that this will be a smooth integration and will lead to numerous benefits for our employees, customers and communities.”

 

Ongoing Transformation

 

This acquisition and geographic expansion of Cargill’s protein business is reflective of the company’s ongoing strategic transformation and repositioning of its protein business more upstream and into emerging markets.

 

In July 2915 Cargill announced the building of a $30 million shrimp feed facility in Ecuador through a joint venture with Naturisa. One month later, the company signed an agreement with Altor Fund III and Bain Capital Europe III to acquire global salmon feed leader, EWOS for €1.35 billion.

 

In May of last year the company announced it was expanding its presence in the Philippines through a joint venture between Cargill Philippines Inc. and Jollibee Foods Corp, the largest foodservice company in Asia to build and operate a poultry processing facility in Santo Tomas, Batangas.

 

The following month the company went on to further strengthen its protein portfolio with the acquisition of Texas-based Five Star Custom Foods Ltd. – a company that specializes in the production of cooked protein food products, as well as soups and sauces, for supply to the foodservice and food processing industries for an undisclosed sum.

 

“Adding Five Star Custom Foods to Cargill’s protein business will provide us with new capabilities we currently do not have, while allowing us to be more nimble in our ability to meet the ever-changing needs of our customers and consumers in today’s fast-paced marketplace,” said Brian Sikes, corporate vice president of Cargill’s protein businesses at the time.

 

Last summer Cargill also agreed to divest its condiments business to Ventura Foods for an undisclosed amount, and agreed to sell its 18-site ag retail unit to Calgary-based Agrium.

 

These moves were followed by Cargill then agreeing to sell all of its U.S. feed lots across two transactions – the first two Texas-based feedlots located in Bovina and Dalhart, Texas were sold to Fiona Industries for an undisclosed sum in July 2016, and its two remaining feedlots located in Leoti, Kansas and Yuma, Colorado were then sold to Green Plains Inc. in May of this year for $36.7 million.

 

“Selling our two remaining feed yards aligns with our protein growth focus by allowing us to redeploy working capital away from cattle feeding operations to other investments,” said John Keating, president of Cargill’s Wichita-based protein business operations and supply chain.

 

Despite this long string of divestments, Cargill also has deployed approximately $560 million for acquisitions and capital investments along its North American protein supply chain over the past two years, reflecting the shift in the company’s focus and direction.

 

“We are committed to being the leading protein provider that nourishes people, animals and the planet in a safe, responsible and sustainable way while exceeding the expectations of our customers,” said John Keating, president of Cargill’s Wichita-based protein business and supply chain earlier this month. “We have great positive growth momentum and are confident it will continue to accelerate as we continue to help our customers’ and suppliers’ businesses, communities and colleagues thrive.”

 

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration please contact Ms. Kiernan at lkiernan@globalaginvesting.com.

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