May 18, 2016

Archer Daniels Midland (ADM) has extended its reach both in Brazil and in the ingredients segment with the full acquisition of the country’s top producer of natural extracts, emulsions, and compounds, Amazon Flavors.

Amazon Flavors creates natural extracts from the guarana plant and açai berries, along with cola, energy and other compounds that are used for production by the beverage industry.

The deal, which increases ADM’s stake in Amazon Flavors from 40% to 100%, includes production facilities in Manaus, and laboratories dedicated to production development and applications in Manaus and São Paulo.

“Brazil is the largest food and beverage market in South America, and we look forward to working with the Amazon Flavors team to ensure that we are the go-to source for Brazilian food and beverage customers,” said Vince Macciocchi, president of ADM’s WILD Flavors and Specialty Ingredients business unit in a company statement.

This deal is another indication that ADM is strategically maneuvering to shift its focus toward building its WILD Flavors and Specialty Ingredients (WFSI) business platform, and marks the company’s continued pursuit of growth in Brazil, one of the world’s largest agricultural producers in the world.

In the two years since it acquired WILD Flavors & Specialty Ingredients for US$2.92 billion, ADM created a new Wild Flavors & Specialty Ingredients business unit, which includes the ADM specialty proteins line, emulsifiers, edible beans, natural health and nutrition, soluble fibers, polyols, hydrocolloids, along with the Wild Flavors business.

The company’s Brazilian arm also received final government approval from Brazil’s waterways regulatory body, Antaq allowing the company to ship grain through its new terminal outside Belem, in the northern state of Para. This marked the first contract approved after the passing of Brazil’s new port law of 2013, which was implemented to attempt to attract more private investment. The terminal will have an initial annual capacity of 1.5 million tons which is expected to increase to 6 million tons this year.

In addition, ADM announced a $250 million investment to build a soy protein production complex in Campo Grande, Brazil to help the company meet growing consumer demand for protein. The facility will be located alongside ADM’s existing soy processing plant in Campo Grand and will produce a range of functional protein concentrates and isolates.

“This is yet another sign of our commitment to grow our already substantial business in Brazil,” said Scott Fredericksen, president, ADM South America in a company statement. “From the expansion of our ports in Santos and Barcarena, to the construction of our new protein facility in Campo Grande, to this enhanced presence in the Brazilian flavor industry, ADM continues to invest in Brazil.”