Cargill expands grain business in Eastern Europe

By Lorraine Heller

- Last updated on GMT

Related tags: Cargill, Hungary, Romania, Bulgaria

Cargill is to move towards full ownership of a leading grain and
oilseeds firm in Hungary, as the US agricultural giant continues
its strategy of expanding its presence in Central and Eastern
Europe.

Agrograin, an agricultural commodity trading and storage company, has been a joint venture with Cargill since 1995. But Cargill last week said it has begun the process of acquiring full ownership of the Hungarian group, as part of its efforts to its develop its origination capacity and increase its competitiveness in the grain and oilseeds arena in Central and Eastern Europe. "Hungary plays an important role as a significant grain and oilseed exporter and the country's surplus is expected to grow in the years ahead,"​ said Rod Sanderson, Cargill's existing representative in the Agrograin business. As well as trading activity, which covers the whole of the Hungarian market, Agrograin has two export facilities on the River Danube. The group has its headquarters in Budapest, as well as 23 locations around the country. According to Cargill, the intended acquisition will further facilitate a competitive supply of raw materials to its existing grain, oilseed and starch plants elsewhere in Europe. "Our history of operating in this sector across Europe, North Africa and the Middle East will facilitate market access for locally produced commodities such as wheat, corn and sunflower seeds,"​ said Sanderson. Cargill, has already made significant inroads into the Eastern European edible oils market over the last few years. In 2005, for example, the company bought up a sunflower seed factory in Ukraine capable of processing 1.2bn tons per day. It also got clearance to buy Romania's largest sunflower oil maker, Olpo Podari, and opened its first oilseed refinery in Russia. Cargill has been present in Hungary since 1995, when the company acquired a minority stake in Agrograin. In 2001 the firm acquired the Agribrands animal feed business in Hungary, which owns modern feed plants in Karcag and Kaposvar. The company's main focus segments in the area are in the commercial dairy, pork and poultry sectors.

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