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Grain trader Gleadell and processor Dunns to be bought by ADM

Lauren Harris 23 January 2019
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Independent grain trader Gleadell Agriculture is set to come under the exclusive ownership of US-based trading and shipping corporation Archer Daniels Midland Company (ADM).

ADM and French agricultural co-operative Invivo each currently own 50% of Gleadell, and ADM announced on Thursday (17 January) that it had signed an agreement to purchase Invivo’s stake.

The deal is subject to regulatory review and is expected to complete during the first quarter of 2019.

See also: Fengrain contracts grain marketing to Frontier

Reacting to the news, NFU chief combinable crops adviser Jack Watts said it was another example of the “harsh reality” of the marketplace in today’s grain trading world and could make farmers feel more vulnerable.

It will mean ADM, headquartered in Chicago, Illinois, has 100% control of the grain trader, which includes its wholly owned pulse and seed subsidiary Dunns (Long Sutton).

ADM plans to merge Gleadell and Dunns with ADM Arkady, ADM’s UK marketing business, and ADM Direct UK, ADM’s specialist combinable crop ex-farm buyer, to create ADM Agriculture.

One of the world’s largest agricultural processors, ADM has about 31,000 employees serving customers in more than 170 countries.

Currently, ADM operates one of the UK’s few rapeseed crushing plants at Erith, Kent, and buys from UK farmers through ADM Direct.

Established in 1880, Gleadell Agriculture buys about 2.5m tonnes of combinable crops from UK farmers, as well as supplying them with feed and fertiliser.

It is a leading supplier of combinable crops to UK millers, feed compounders and other consumers, and a major exporter of grains, oilseeds and pulses to EU markets and further afield.

In its most recent set of accounts, made up to 30 June 2017, Gleadell made a pre-tax profit of £2.3m from a turnover of £368.5m.

This was a 47% fall compared with the previous year when it made £4.3m on a turnover of £405.2m.

Gary McGuigan, ADM’s president of global trade, said: “With significant storage and processing capability and a longstanding reputation for being a safe and trusted trading partner, Gleadell and Dunns will be great additions to our business in the UK.

“We are excited to expand our capabilities, not only to continue our strategic growth, but also to support our farmers and our customers as they work to address fast-growing consumer demand.”

An ADM spokesman said customers will benefit from enhanced product offerings and processing capabilities nationwide.

Business is expected to continue as usual, and any changes should be minimal.

UK farmers ‘vulnerable’

The NFU’s Mr Watts said the news was unsurprising.

“We have known for a long time that the grain sector and supply chain is running off thin margins, if at all,” he said.

“The supply chain has had to demonstrate a level of consolidation and this is another level of that.

“From the farmers’ point of view, there are legitimate concerns that there are fewer options for farmers to sell to and negotiate with, and this amplifies the David and Goliath situation, which they may think makes them more vulnerable.”

Mr Watts said the merchant model struggled to be sustainable and it would be naïve to think it could continue.

Though he referred to ADM’s news as a double-edged sword, Mr Watts added that it was encouraging to see companies willing to invest in the UK’s supply chain, and identified a potential for investment in more efficient processing and value to be added to domestic pulses.

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