Protein Producer Company News

Why is Cargill Billionaire on a Property Buying Spree?

Minnesota Billionaire’s Real Estate Frenzy Raises Concerns in Park Point

Excessive Spending on Local Properties In Park Point, a scenic neighborhood in Duluth, Minnesota, a wave of unease is sweeping through the local community. Kathy Cargill, associated with the Cargill family, one of America’s wealthiest, has been on a real estate buying spree, acquiring ten homes in the area. Sources indicate that these purchases by North Shore LS, LLC, managed by Kathy Cargill, have significantly exceeded the properties’ appraised values, totaling approximately $2 million above market estimates.

Local Residents Express Worry Over Community Changes

Fear of Neighborhood Transformation The acquisitions by North Shore have sparked fears among residents of Park Point. They are concerned about the potential shift in the neighborhood’s character, escalating property taxes, and the tightening housing market. Some of the purchased homes, described dismissively as “pieces of crap” by Kathy Cargill, have already been demolished. This attitude has left a bitter taste among former homeowners and stirred speculation about the billionaire’s plans for the area.

The Cargill Family: From Agribusiness to Real Estate Ventures

Background of the Cargill Dynasty The Cargill family, heirs to Cargill, Inc., the largest privately-owned company in the United States, are known for their discretion in matters of wealth. However, Kathy Cargill’s recent activities and her penchant for luxury, exemplified by her collection of high-end McLaren cars, have cast a spotlight on the family. The Cargills, with an estimated wealth of $47 billion, are now at the center of a local controversy in Park Point, a far cry from their usual low-profile dealings in food and beauty products.

Concerns Mount over Potential Tax Hikes and Community Impact

Potential Economic Implications for Residents The community of Park Point is bracing for possible financial repercussions following these high-value real estate transactions. With fears of increased property taxes looming, residents find themselves in a dilemma. Some, like Danny O’Neil, have benefited financially from selling their properties well above the appraised values. However, the long-term effects on the neighborhood’s tax landscape and social fabric remain uncertain, leaving many in a state of apprehension about the future.

ADM Faces Stock Plunge and CFO Leave Amidst Accounting Probe

Introduction: Shares of Archer-Daniels-Midland Co. (ADM), a prominent player in the global grains trading and processing industry, experienced a startling 24% drop in a single day, marking its most significant one-day decline since the 1929 market crash. This sudden downturn followed ADM’s decision to place its Chief Financial Officer (CFO), Vikram Luthar, on administrative leave. The reason behind this move is an ongoing investigation into accounting practices within ADM’s Nutrition segment.

A Challenging Day for ADM: ADM’s stock plummeted to its lowest point since February 2021, casting shadows reminiscent of the historical market crash. The company’s decision to suspend its CFO has raised questions about the financial health of this industry giant.

SEC Inquiry and Financial Repercussions: The U.S. Securities and Exchange Commission (SEC) has initiated an inquiry into certain inter-segment transactions at ADM, adding another layer of complexity to the situation. ADM has been forced to revise down its profit forecast for the year 2023 and delay the release of its fourth-quarter results, contributing to a cloud of financial uncertainty.

The Nutrition Segment Challenge: The spotlight falls squarely on ADM’s high-margin Nutrition segment, which has been grappling with challenges of its own. Weak demand for meat alternatives and operational disruptions at a significant soy processing facility have contributed to the woes of this segment, raising concerns among investors and industry analysts.

A Legacy of Success and Recent Struggles: ADM has a legacy of impressive earnings driven by favorable crop processing margins and robust demand for food, animal feed, and biofuel. However, its Nutrition segment has been an exception, failing to meet expectations. This segment provides ingredients, including plant-based proteins and natural flavors, to various industries.

The Impact on Investors and Brokerages: Following the SEC’s involvement and the CFO’s leave, at least four brokerages have downgraded ADM’s stock. The company, in response, adjusted its earnings forecast for the fiscal year ending December 2023. Investors in ADM are grappling with significant losses due to the sharp stock price decline.

Looking Ahead: The fate of ADM now hinges on the outcome of the ongoing investigation and the company’s ability to address the issues within its Nutrition segment. Leadership changes, including the appointment of an interim CFO, Ismael Roig, suggest that ADM is taking proactive steps to navigate these challenging waters.

Conclusion: ADM, a major player in the grain trading and processing industry, finds itself at a crossroads. The stock price plunge and accounting probe have far-reaching implications, not only for the company but also for its stakeholders, suppliers, customers, and competitors. As the investigation unfolds, the future of ADM remains uncertain, and its efforts to weather these challenges will undoubtedly shape the course of the industry. Investors and industry watchers are keenly observing developments in this unfolding saga.

Read: BRF’s Innovative Grain Purchasing Approach

JBT’s Increases Acquisition Offer to Marel

John Bean Technologies Corporation (JBT) elevates its bid to acquire Marel, a peer in the food equipment sector. Announced on January 19, the new offer proposes €3.6 ($3.91) per share, surpassing JBT’s previous bid of €3.4 per share.

Anticipated Closure and Valuation of the Deal

Upon successful completion, JBT anticipates finalizing the acquisition in the latter half of 2024. This revised proposal values Marel at €2.7 billion ($2.94 billion), with an overall enterprise value approximating €3.5 billion.

Statements from JBT and Marel Executives

Brian Deck, CEO of JBT, remarked on the constructive dialogues leading to this announcement. He anticipates effective collaboration in due diligence and formalizing the takeover offer. Deck also highlighted the potential operational and revenue synergies enhancing value creation in the combined entity.

Shareholder Arrangements and Company Structure Post-Acquisition

In the proposed arrangement, Marel shareholders would receive €950 million in cash and retain about 38% ownership in the newly formed JBT Marel Corp. The corporate headquarters will remain in Chicago, with additional headquarters in Europe and a global technology center in Gardabaer, Iceland.

Eyrir Invest’s Acceptance and Marel’s Response

Eyrir Invest, holding a 24.7% stake in Marel, has accepted the offer for its shares. Marel, acknowledging the proposal, sees merit in the merger, as stated by Chairman Arnar Thor Masson. While valuing Marel’s independent strategy, the board recognizes the benefits for stakeholders in the combined entity.

Terms and Conditions for Marel Shareholders

Marel shareholders are offered choices between cash, JBT stock, or a combination thereof. Key conditions include Marel’s board recommendation, satisfactory due diligence, standard regulatory approvals, and acceptance by a majority of Marel’s shareholders.

Final Approvals and Stock Listing Plans

Final approvals are pending from JBT’s board and its shareholders, with plans for a secondary stock listing on Nasdaq Iceland, contingent on local regulatory sanction.

Corporate Profiles of JBT and Marel

JBT, with a workforce of approximately 5,100 across 25 countries, reported revenues of $1.6 billion in 2023. Marel, employing over 8,000 in more than 30 countries, posted revenues of $1.93 billion in 2023.

Historical Context of JBT’s Offers

JBT’s journey to acquire Marel included an initial rejected proposal and a subsequent bid of €3.4 per share. Following a granted extension, this latest offer marks JBT’s continued pursuit of Marel.

Lineage Logistics Prepares for a Massive $30bn IPO

Reports indicate that Lineage Logistics is preparing for an Initial Public Offering (IPO) valued at an impressive $30 billion this year. This move would significantly elevate the cold chain solutions provider above its competitors, notably Americold Realty Trust, which currently has a market capitalization of $8 billion. Lineage boasts an extensive network, with over 430 warehouses in 20 countries, demonstrating its substantial presence in the global market.

Cold Storage Market Experiences Rapid Growth

The cold storage sector is experiencing a surge in demand. The Cold Storage Construction – Global Strategic Business Report reveals that the global market, currently valued at approximately $11.6 billion, is projected to escalate to $32.8 billion by 2030. This growth is attributed to the rising global demand for chilled and frozen goods, necessitating a significant expansion in cold chain infrastructure. A study by the Columbia Climate School published last year underscores this trend, highlighting the need for increased cold chain solutions.

Reefers Gain Momentum in Maritime Transport

The maritime sector is also witnessing robust growth in the reefer market. The global fleet of reefer containers stands at around 1.5 million units. Estimates suggest a 3% growth in reefer plugs last year, with a projected 2% increase this year and 5% in 2025. Although reefer trade offers more stable demand and rates for ocean carriers compared to general containerized cargo, it also increases their energy requirements and carbon footprint. SeaCube, a reefer provider, notes that accommodating 10% of a ship’s capacity for reefers results in a 30% increase in energy demand.

Environmental Impact of Cold Chain Solutions

The Columbia Climate School’s study highlights the significant environmental impact of refrigeration systems, including industrial chillers and transport. These systems are responsible for up to 5% of global energy needs and 2.5% of total greenhouse gas emissions. Moreover, supply chain activities contribute to 18% of the greenhouse gas emissions from the global food production system. This scenario places the industry at odds with tightening environmental regulations, such as the Paris Agreement and various national and regional directives.

Lineage Logistics’ Sustainability Efforts and Industry Challenges

Lineage Logistics, acknowledging these environmental challenges, published its first sustainability report in 2022 and committed to achieving net-zero emissions across its operations by 2040. However, with just a 0.5% reduction in same-store emissions year-on-year, the company recognizes the long journey ahead to reach this target. The industry is increasingly focusing on technological solutions for supply chain traceability, balancing emissions reduction with improved efficiency. Nevertheless, doubts remain about the overall impact of these efforts on emissions, with a consensus forming around the need for collaborative solutions.

Collaborative Initiatives and Global Participation

In a significant move, Lineage joined the Move to -15°C coalition, an initiative adjusting the standard temperature for frozen food storage. This coalition, formed based on research led by the University of Birmingham, aims to raise the standard temperature from -18°C to -15°C without impacting food quality. This adjustment could reduce carbon dioxide emissions by 17.7 million tonnes annually. Notable participants include AP Møller-Maersk, Kuehne + Nagel, MSC, DP World, and Ocean Network Express.

Decarbonization Efforts Extend to Developing Nations

Decarbonization efforts are not limited to industrialized countries. Carrier Transicold’s recent collaboration with the Greener Reefers in International Maritime Transport (GIZ) initiative aims to advance cold chain development in countries like Costa Rica and South Africa. This project focuses on training technicians in the use of natural refrigerants for reefer containers, emphasizing sustainable solutions and energy optimization. The Columbia Climate School notes the rapid expansion of cold chains in developing countries and emerging economies, with China’s cold chain market expected to nearly double by 2026. Researchers stress the importance of climate-sensitive technologies and policies to mitigate the environmental impact of these growing cold chain networks.

Danone’s €100 Investment in Mexico

Danone’s Commitment to Mexico: A 100 Million-Euro Investment

Danone, renowned for its Danonino and Bonafont brands, has declared a significant investment in Mexico. The multinational food-products corporation is set to invest 100 million euros in 2024, marking a substantial financial commitment to the country. This announcement was made by Emilio Aguilar, Danone’s Vice President of Public Affairs, during a recent press conference.

Investment Aims: Innovation and Production Enhancement

Aguilar emphasized that the investment aligns with Danone’s previous financial inputs and is intended to support the maintenance of production lines and foster innovation within the country. He articulated the company’s vision, stating, “To grow our legacy we are going to continue innovating, continue growing, and continue investing in our business.” This statement underscores Danone’s long-term strategy in Mexico.

Celebrating 50 Years in Mexico with New Initiatives

The investment announcement coincides with Danone’s 50th anniversary in Mexico. Recently, the company ventured into the plant milk market with their new product, Bye Bye Muu. Additionally, they introduced an eco-friendly initiative with a label-free bottle made of recycled materials for Bonafont, their bottled water brand. However, specific plans for new product launches in Mexico this year remain undisclosed.

Recorded Growth and Post-Pandemic Strategy

In 2023, Danone experienced sustained growth, though exact sales figures were not revealed. The company benefited from the resumption of in-person schooling and office work. Post-pandemic consumer trends have led Danone to pivot back to on-the-go product formats, catering to increased demand as people return to schools and workplaces.

Navigating Challenges in an Election Year

Looking forward, Danone anticipates a challenging yet growth-oriented year, especially considering the upcoming elections. Aguilar conveyed a resilient outlook, remarking, “What we have learned in general in industries is that, with elections or without elections, we work and we evolve.” He stressed the importance of overcoming electoral challenges and remaining focused on production, employment generation, and ensuring product availability for consumers.

Thai Union Group Announces Exit from Red Lobster Investment

Thai union group’s Strategic Divestment

Thai Union Group PCL, a major player in the seafood industry, has announced plans to divest its minority stake in the U.S.-based restaurant chain, Red Lobster. This move follows a comprehensive review conducted in 2023 by Thai Union and Red Lobster, aimed at identifying opportunities for operational and financial enhancements.

Financial Strains Lead to Divestment Decision

Thiraphong Chansiri, the CEO of Thai Union Group, highlighted several factors influencing this decision. “The COVID-19 pandemic, persistent industry challenges, rising interest rates, and increasing costs for materials and labor have adversely affected Red Lobster,” Chansiri explained. The restaurant’s continued financial struggles have led to negative impacts on Thai Union and its stakeholders. “After thorough analysis, we concluded that the ongoing financial demands of Red Lobster are inconsistent with our capital allocation strategies. Consequently, we are moving forward with exiting our minority investment.”

Financial Impact and Impairment

Red Lobster’s performance has been a concern for Thai Union, with a reported loss of THB 0.7 billion (€18 million) in the first nine months of 2023. The company anticipates a one-time, non-cash impairment charge of THB 18.5 billion (€480 million) for its entire investment in Red Lobster, which will be reflected in its fourth-quarter earnings for 2023. Despite this, Thai Union assures that its balance sheet remains robust, with a net debt/equity ratio of 0.84.

Share Repurchase and Financial Management

In light of these developments, the company’s board has approved a share repurchase plan. The plan, aimed at financial management, involves an investment not exceeding THB 3.6 billion (€93 million), or 200 million shares.

Recent Financial Performance

The second quarter of the financial year saw Thai Union reporting a net profit of THB 1.0 billion (€26 million), a 36.7% decrease from the previous year. This decline is attributed to foreign exchange losses and the diluting effect on the net profit of i-Tail. The company’s revenue also experienced a 12.6% year-on-year decrease to THB 34.1 billion (€890 million), influenced by factors such as high baseline figures from the previous year, elevated inventory levels among customers, normalization of logistics, and generally weaker demand.

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Is JBS SA’s New York Stock Exchange Listing Compromised?

Global Political Pushback Against JBS’s IPO Plans

The resistance to JBS’s initial public offering (IPO) efforts is escalating beyond environmental activists, drawing attention from US and UK politicians. These lawmakers have expressed their concerns to the US Securities and Exchange Commission (SEC), urging the regulatory body to deny the Brazilian meatpacking giant’s application. As JBS, the world’s largest meat producer, gears up for public listings on the New York Stock Exchange and the São Paulo-based B3 exchange, the opposition is gaining momentum, now involving global legislators.

US and UK Lawmakers Voice Concerns to SEC

In two distinct letters, a group of 15 US senators and 13 UK Members of Parliament have articulated their apprehensions to SEC chair Gary Gensler. Their concerns revolve around JBS’s intended move to reduce capital costs, enhance shareholder returns, and boost diversification and growth. This isn’t JBS’s first attempt at an IPO, with previous efforts thwarted by a corruption scandal and the COVID-19 pandemic. The company, with a significant global presence and a market cap exceeding $11.25 billion, is now facing considerable pushback from both climate activists and policymakers.

Lawmaker Criticisms and Allegations Against JBS

Senator Cory Booker leads the US effort, highlighting JBS’s past missteps and urging the SEC to disclose the company’s potential risks to investors. These risks include corruption, human rights abuses, monopolistic practices, and environmental concerns. The politicians also address the structure of the proposed offering, which could potentially exempt JBS from US laws and allow the Batista family, JBS owners, to convert their shares to give them disproportionate voting power. Similarly, the UK letter bluntly requests the SEC to reject JBS’s IPO application, citing significant threats to global climate regulation and biodiversity conservation.

JBS’s Controversial Environmental and Human Rights Record

JBS’s climate impact is considerable, with a 51% increase in greenhouse gas emissions between 2016 and 2021. The company, accused of misleading investors about its environmental stewardship, faces an SEC whistleblower complaint for selling Sustainability Linked Bonds under potentially false pretenses. JBS is also a major contributor to Amazon deforestation, with substantial increases in its regional slaughterhouses. Human rights abuses, including child labor allegations and a substantial criminal exposure in various legal issues, further tarnish the company’s reputation.

Coalitions Call for Blocking JBS’s IPO

Environmental groups like Rainforest Action Network and Mighty Earth have petitioned the SEC to block JBS’s public listing, calling it a significant climate risk. The Ban the Batistas coalition, formed in response to JBS’s attempts to publicize its environmental initiatives, criticizes the company’s minimal efforts compared to its environmental damage and market dominance. These groups, along with concerned global entities, are urging investors and regulators to question JBS’s intentions and demand greater transparency.

UK MPs Challenge JBS’s Global Policy Influence

UK MPs have accused JBS of distorting global public policy debates, particularly at events like COP28, where the company promoted meat as ‘sustainable nutrition.’ This stance contradicts scientific consensus and poses a threat to global climate regulation efforts. The politicians argue that allowing JBS access to US capital markets would perpetuate environmental damage and undermine global climate change mitigation efforts.

Broad Political Consensus Against JBS’s IPO

Glenn Hurowitz, CEO of Mighty Earth, points out the unique consensus among US senators across the political spectrum against JBS’s IPO. The company’s expansion into industrial meat operations could lead to more deforestation, market manipulation, human rights abuses, and increased climate pollution. There’s a growing call for the SEC not to permit JBS’s IPO to proceed.

Why Tyson Foods is Cutting Back Production…

Tyson Foods, a major player in the U.S. meatpacking industry, has recently announced a temporary reduction in operations at several of its facilities across the United States. This decision comes as a direct response to the severe winter weather conditions impacting the region. The company is actively striving to meet customer demands by shifting production to other locations that are not affected by the weather disruptions.

This scaling back of operations follows a recent incident where Tyson Foods, along with another leading meatpacker, Cargill, had to halt operations at their beef plants located in Kansas. This suspension was due to a significant snowstorm that hit the area, leading to a noticeable decrease in meat production in the U.S.

The impact of such weather-related disruptions is not only felt by the companies but also resonates throughout the supply chain, potentially affecting prices and availability of meat products in the market. Tyson Foods is known for its proactive approach in dealing with such challenges, emphasizing their commitment to maintaining a steady supply of products despite environmental setbacks.

Furthermore, these events highlight the vulnerability of the meatpacking industry to extreme weather conditions, underlining the need for more resilient and adaptable operational strategies. Tyson Foods’ ability to quickly redirect its operations to other facilities demonstrates a level of preparedness and flexibility, which is crucial in minimizing the impact of such unforeseen events on their production and supply chain.

Will UK block JBS US Financial Listing?

UK Lawmakers Urge SEC to Block JBS SA’s Entry into US Financial Markets

JBS SA, the colossal Brazil-based meat company, is facing a significant hurdle in its plans for a dual stock listing. A group of UK Members of Parliament, self-styled as “Ban the Batistas” – a nod to the controlling family of JBS SA – are taking a stand against the company’s financial maneuvers in the United States.

Controversial History Haunts JBS as MPs Intervene

Pressures Mount Over Alleged Malpractices

The meat giant, known for its global dominance, has been embroiled in controversies, including bribery allegations involving food safety inspectors. This troubled history is now catching up as it plans to expand its financial footprint.

JBS’s Ambitious Dual Listing Plans Under Scrutiny

Expansion Efforts Meet Political Roadblock

JBS’s announcement last summer about listing on both the Sao Paulo and New York Stock Exchanges, through Brazilian Depository Receipts (BDRs) and direct listing, respectively, was a strategic move to amplify its global presence and shareholder value. The company aimed to diversify into more branded and value-added food products, reducing capital costs and boosting shareholder returns. However, the required SEC approval for the New York listing is now under threat.

More JBS News: JBS’s New R$570m Feed Facilities

British Politicians Lobby Against JBS’s IPO in the US

Letter to SEC Chair Highlights Environmental and Ethical Concerns

UK parliamentarians have expressed their opposition to JBS’s Initial Public Offering (IPO) in a letter to SEC Chair Gary Gensler. They cite JBS’s involvement in deforestation, human rights violations, and land seizures from Indigenous communities. The letter, underscoring the company’s adverse impact on global climate and biodiversity, urges the SEC to deny the IPO.

MPs Representing Global Environmental Concerns

A Call to Uphold Climate Commitments

The letter, signed by a group of about thirteen MPs from the 650-member UK House of Commons, argues that allowing JBS’s US market entry would contradict global climate change mitigation efforts. It emphasizes the importance of the US standing firm in its climate commitments and influencing global public policy on meat consumption.

Ban the Batistas: A Movement Monitoring US Climate Leadership

Group Highlights Risks to American Stakeholders from JBS Listing

Ban the Batistas, an alliance of organizations, is advocating to protect American farmers, ranchers, consumers, and investors from the risks posed by JBS’s potential US listing. They highlight the considerable influence of the Batista brothers, Joesley and Wesley, through their financial vehicle, J&F Investments, in controlling JBS SA, which employs over 250,000 people across 190 countries, including a significant workforce in North America through JBS USA.

JBS’s New R$570m Feed Facilities

Over 570 Million Reais Earmarked for Three New Plants, Bolstering Seara’s Production and Creating Hundreds of Jobs

São Paulo, Brazil – JBS SA, a leading global food company, has confirmed a substantial investment exceeding 570 million reais ($117 million) to construct three new feed factories in Santo Inácio, Itaiópolis, and Seberi, strategically located in Brazil’s southern region.

Expanding Capacity to Meet Growing Demand The move is seen as a strategic response to adapt the supply of inputs to meet the increased production capacity of Seara, JBS’s Brazilian poultry division. The company has observed significant growth in recent years, necessitating this expansion.

State-of-the-Art Facilities to Boost Production Upon completion, these factories are expected to enhance Seara’s feed production by over one million tonnes annually. João Campos, president of Seara, highlighted the advanced automation and technology employed in these factories, emphasizing JBS’s commitment to expanding production capabilities and supporting regional socioeconomic development.

Significant Investments in Individual Plants

The Santo Inácio plant, set to receive 145 million reais ($29.62 million), will occupy 11.3 thousand square meters, creating approximately 80 jobs. This facility will play a pivotal role in supporting the processing capacity in Paraná’s three cities.
In Itaiópolis, JBS plans to invest 194 million reais ($39.58 million) for two factories over 13.8 thousand square meters. These plants will support over 200 integrated producers and 300 poultry farms. An additional facility focusing on premixes for animal nutrition is expected to create over 120 jobs.
The Seberi facility, with an investment of 230 million reais ($46.92 million), aims to optimize deliveries and reduce logistic costs, potentially creating up to 110 jobs.

A Strategic Move for Regional Growth This large-scale investment by JBS SA not only aims to augment Seara’s feed production but also signifies a substantial contribution to the local economies, potentially creating over 300 jobs across these regions. This move underscores JBS’s commitment to enhancing its operational efficiency and supporting community development in the areas where it operates.