In a rare interview , Cargill, the US food group, spoke to Laurent Flallo from Les Echos, and set out the rationale behind its recent acquisition, the biggest in the company's 137-year history, of French starch company Cerestar.
Paul Conway, Cargill's executive vice-president for Europe, told Les Echos it was part of a strategy to move into downstream food production.
Cargill, best-known as a grain trader, has bought a 56 per cent stake in Cerestar, a leading European manufacturer of starch, from Italy's Montedison. The deal values Cerestar at E1.2 billion including debt.
"The attraction of this was the value-added products which we didn't have before and which represent 25 per cent of Cerestar's volumes and 40 per cent of its growth," said Mr Conway.
The US group will be able to develop Cerestar's range of polyols, including sorbitol, mannitol and isomalt, sweeteners used in the food and drug industries, its modified starches for the paper and food industries and its specialities such as dextrose. The acquisition moves the group up from fourth to first place among European manufacturers of starch.
The two businesses are a good fit geographically. Cerestar is weak in the US, where Cargill is market leader, but Cerestar has 12 European factories, against Cargill's two, as well as a 300,000 tonne starch plant in China, where Cargill has only an animal-food factory.
The report states that Cargill is also interested in Cerestar's former sister company Cereol, a specialist in oils processing, and the animal feeds group Provimi.