Arcor partners with US giant for a business of US $ 300M per year

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The Arcor Group agreed with the American Ingredion incorporated to create a new partnership in the business of ingredient solutions for the food and beverage industry. The Arroyito giant will hold 51% of the share package, while the US based firm will keep the remaining 49%. The alliance comprises an estimated annual turnover of more than US $ 300 million.

The joint venture seeks to strengthen the operations and optimize the processes of both companies, as well as to extend its geographical presence and commercial capacity in the supply of ingredients for the market in Argentina, Chile and Uruguay. The agreement has already been authorized by the board of directors of each company and is subject to the approval of government control bodies. Infupa acts as financial advisor to Arcor and Bruchou, as legal advisor. In the case of Ingredion, Finanzas & Gestión is its financial advisor and Baker & McKenzie, its legal advisor.

The association will operate independently and, once the transaction is closed, Arcor will consolidate the business in its financial statements. Ingredion, for its part, will record its investment in the joint venture using the equity method. The main food producer in the country , which manufactures three million kilograms a day and reaches more than 100 countries around the world with its brand, will transfer its ingredients operations, located in the town of Lules , in the province of Tucumán , and two plants in the industrial complex of its birthplace of Arroyito , in Córdoba, where its main headquarters are located.

Meanwhile, Ingredion will contribute its operations in Argentina, Chile and Uruguay. This includes two factories located in the Buenos Aires towns of Chacabuco and Baradero.

According to a statement issued after the agreement, the plants produce essential value-added ingredients for the food, beverage and pharmaceutical and industrial industries , such as glucose syrups, maltose, fructose, starches and maltodextrins.

The joint venture will be managed by a team made up of executives from both companies , who will be responsible for integrating the joint operations of production, marketing and sale of ingredients for the various industries in the three countries involved.

Based in the Chicago suburbs, Ingredion is a global provider of ingredient solutions, with operations in more than 120 countries and annual net sales of more than $ 6 billion . The company converts grains, fruits, vegetables and other plant materials into value-added inputs for the food, beverage, animal nutrition, brewery and industrial markets. Hire more than 11,000 employees globally.

In 2007, Ingredion presented a crisis prevention plan to the Ministry of Labor of the province of Buenos Aires, from which it proposed to reduce its workforce , with 186 layoffs: 112 at the Chacabuco plant and 74 at the Baradero plant. But the labor portfolio communicated that the documentation and arguments presented by Ingredion were not sufficient to approve the process.

For the firm, South America is a key region: it ranks second in terms of revenue, with a 17% increase in its operating profit in 2020, which reached US $ 112 million.

This year Ingredion expects its revenues to continue to grow , driven by recovery in sales volumes and growth in specialty ingredient consumption.

On the side of Arcor, it is not the first time that the food company led by Luis Pagani has associated with international firms. In 2004, the company, which is the world's leading producer of hard candies and exporter of sweets in the country, joined with the French multinational Danone to merge its activities in the cookie business in Argentina, Brazil and Chile, with the Bagley brand. , acquired by Danone in 1994.

Likewise, in 2007, together with the Mexican Bimbo, the largest bakery in the region at that time, it opened a plant to manufacture sweets and chocolates in the center of the Aztec country, in which they invested US $ 60 million in equal parts.

In addition, in 2019 the food colossus joined Coca-Cola in the formation of Kamay Ventures, one of the main open capital funds.

Finally, at the beginning of May last year, Arcor increased its stake in Mastellone and already owns 48.7% of its shares. The Pagani family company, which in 2019 registered a red of $ 144 million (latest annual data available), had, until then, 47.3% of the shares of the dairy. Thus, it is approaching the maximum limit provided by the agreement signed in 2015 , where it was established that the Cordoba food company will be able to keep 49% of the share package.

Jorge Elías, Ingredion's president for South America said, we are proud to announce our joint venture with Arcor. We share the same values ​​and passion for creating a world-class experience and offering ingredients that create value for our customers. We look forward to combining Ingredion's successful model in the global marketplace with our respective operations. to secure our future in the coming years.

Modesto Magadán, general manager of Agronegocios de Arcor, said, our association with Ingredion is a very significant step in the growth process of the group's ingredients business . In this way, Arcor consolidates itself as a company that invests and continuously grows in the country.