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While waiting for SanCor, Adecoagro invests in rice

October 27, 2018 - By Joseph Taylor

While waiting for next Wednesday SanCor assembly approve the offer made by two of the dairy plants, Adecoagro agricultural advances in their other businesses. The company, through Molinos Ala, has just disbursed US $ 5 million ($ 190 million) to start competing with its own brand in the business of toast and rice snacks.

With 40,000 hectares of irrigated fields on the coast, Adecoagro is the largest producer in the country. The company founded and led by Mariano Bosch and born in the middle of the crisis of 2002, develops from seed to sowing, has three mills, where it processes 20% of the rice that is eaten in the country and now installed a factory in Pilar to elaborate mass consumer products. The company bought two lines: one for snacks and another for other types of products, such as healthy cookies, which will be launched later. They will compete with Molinos Río de la Plata and Tía Maruca, among others.

With the disbursement of Pilar, Molinos Ala has invested some US $ 20 million in the business: it installed a parboil rice factory (which is not passed), bought a flour plant, another for drying paddy rice, packaging machines and agricultural machinery. It is one third of its activities in Argentina which, in turn, represent 40% of the turnover that, this year, will be around US $ 1,000 million. The rest comes from Brazil (where they are very strong in sugar, ethanol and energy) and something from Uruguay. They also produce grains in all countries, where they employ 8,000 people.

The goal of the company is always to achieve, through the incorporation of technology, the most competitive process that allows them to export as well as supplying the domestic market. That’s why, says Bosch, they have more adjusted prices than the competition. And, also for that reason at some point they went down of businesses that they had acquired for not achieving that goal, such as the purchase of La Lácteo, which they then sold.

Now, Adecoagro is behind two SanCor plants – the one in Chivilcoy, where long-life milk is produced, and the one in Morteros (Córdoba), which makes bar and powdered milk – after the negotiations to acquire 90% of the dairy cooperative. Next Wednesday they would take another step towards signing the agreement. Except for milk powder, the rest of the products that will add are new.

How are you looking at the progress of the economy, in the midst of devaluation and the increase in withholding? Clarin asked Bosch.

-We do not care about the exact today, but the long-term competitiveness. We do not get entangled in the moment. Since we started, in 2002, there were difficulties. We had the first meetings before creating the company before they changed five presidents. We can not be tied to the moment. We have to keep finding him around.

-How did the crisis hit the Adecoagro stock (which operates on Wall Street?

– The action is very weak. It is worth less than what everything we are doing is worth. The advantage we had was that we issued a bond of US $ 500 million to 6% in 2017. All movements are complicated in general, but by working with the domestic market and export, we can compensate.

– How do you see Brazil before the next elections?

– Brazil is an unknown.

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