(By Balaseshan) Archer Daniels Midland Co. (NYSE:ADM), an agricultural commodities and products merchandiser, said it has agreed to buy a port terminal in the state of Para in Brazil to expand the country's grains export capacity.
The company said the purchase improves ADM's ability to link the country's harvest to export markets. The facility was designed to handle minerals, and ADM intends to convert it to handle bulk grains and agricultural inputs.
ADM also intends to upgrade the facility to handle Panamax vessels and double its storage capacity. Once complete, the new port will have capacity to handle 3 million metric tons a year.
"By adding this strategically located port to our extensive logistics network in Brazil, we will increase our capacity to export grain from Western and Northern Brazil and further expand our fertilizer operations throughout the country," said Valmor Schaffer, president, ADM South America.
The company said the new port would enhance ADM's global reach, better connecting the Brazilian harvest to markets including Europe, the Middle East, and even Asia through the Panama Canal.
ADM is Brazil's largest soybean meal exporter, the second largest exporter of soybeans and the Brazilian economy's seventh largest exporter overall. The company currently operates in all of Brazil's major agricultural ports and owns a port terminal in Santos, Sao Paulo.
ADM is trading down 4.15% at $26.35 on Tuesday. The stock has been trading between $23.69 and $33.98 for the past 52 weeks.