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Archer Daniels Expands in Brazil, Acquires Amazon Flavors

In sync with its plan to expand the offerings of its WILD Flavors and Specialty Ingredients segment as well as its business in Brazil, Archer Daniels Midland Company ADM fully acquired Amazon Flavors – the leading producer of natural extracts, emulsions and compounds in Brazil. With this, the company expanded its equity stake in Amazon Flavors to 100% from 40% held earlier.

The assets acquired under the deal include Amazon Flavors’ production facilities in Manaus and product development and application laboratories in Manaus and São Paulo. With the help of these assets, the company produces natural extracts taken from the guarana plant and açai berries, along with cola, energy and other compounds for the Brazilian beverage market. The company employs about 60 people.

With the addition of Amazon Flavors to its portfolio, Archer Daniels has taken another step to expand its already strong business presence in Brazil, which is a key hub for its global operations. The company’s strong footprint in the country is evident from the recent expansion of its ports in Santos and Barcarena, as well as the construction of a new protein facility in Campo Grande.  

Brazil happens to be among the vital producers of agricultural products across the globe and the largest food and beverage market in South America. Archer Daniels expects it to be a significant contributor in meeting the agricultural needs of the growing world population. That said, the company remains keen on continuing its investments in Brazil.

Coming back to Amazon Flavors, this acquisition not only enhances Archer Daniels’ presence in the Brazilian flavor industry but also opens up ways for the latter to become the primary source for Brazilian food and beverage customers.

Not only this, this acquisition also marks continued growth of Archer Daniels’ WILD Flavors and Specialty Ingredients (WFSI) business, which is focused on enhancing shareholder value through planned expansion and enrichment of product portfolio. Following a trail of solid acquisitions including that of Harvest Innovations, Eatem Foods and the SUPERB brand to its protein and fiber ingredient portfolio, the company’s WFSI segment remains on track with its plan of building global ingredient and flavor facilities that will provide its customers with complete customized and ready-to-use solutions.

Overall, we believe Archer Daniels is strategically taking steps to manage its business portfolio to help realize value and invest the same in the best possible resources to enhance returns. The company currently carries a Zacks Rank #3 (Hold).

Zacks Rank

Investors interested in the food sector may consider stocks like Fresh Del Monte Produce Inc. FDP, Post Holdings Inc. POST and B&G Foods Inc. BGS, each with a Zacks Rank #1 (Strong Buy).

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FRESH DEL MONTE (FDP): Free Stock Analysis Report
 
B&G FOODS CL-A (BGS): Free Stock Analysis Report
 
ARCHER DANIELS (ADM): Free Stock Analysis Report
 
POST HOLDINGS (POST): Free Stock Analysis Report
 
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