U.S. agribusiness company Archer Daniels Midland Co has agreed to sell a 50-percent stake in its Barcarena grain export terminal in northern Brazil to commodities trader Glencore PLC (GLNCY), the company said during an analyst call on Tuesday.
The companies are planning to increase the terminal's annual capacity to 6 million tonnes, from the current 1.5 million tonnes, after the deal, which is expected to close in the first half of 2015 pending regulatory approvals, ADM later detailed in a news release.
The upgrade will allow the terminal to begin loading larger panamax vessels, which can hold around 60,000 tonnes, the company said.
"Agricultural production is expanding rapidly in northern and western Brazil, and the Barcarena terminal is very well positioned to capitalize on that growth," Valmor Schaffer, president of ADM South America, said in a release.
ADM also said Tuesday it expects U.S. ethanol exports in 2015 to hold steady with 2014 volumes of around 800 million gallons despite headwinds from sharply lower oil prices and a strong dollar, which makes dollar-denominated goods more expensive for those holding other currencies.
Among the largest U.S. ethanol producers, ADM does not expect much export competition from Brazil, a large producer of sugar-based ethanol, ADM CEO Juan Luciano said.
Ethanol remains one of the least expensive fuel oxygenates available on the global market and Brazil may even at times import corn-based ethanol from the United States, he added.
(Reporting by Karl Plume in Chicago; Editing by James Dalgleish)