The Brazilian unit of U.S.-based commodities trader Bunge Ltd said on Friday it reached an agreement to acquire a minority stake in Agrícola Alvorada, a mid-sized grains trader located in Brazil’s top soy producing state of Mato Grosso.
Bunge said in a statement that the deal will strengthen its grains sourcing activities in Brazil. It did not give the stake size or value.
Bunge’s investment comes at a time when it is trying to build closer relationships with farmers in Brazil as it seeks to see off rising competition from new entrants such as China’s Cofco.
“This is a very interesting deal for Bunge,” said Raúl Padilla, Chief Executive of Bunge Brasil, in the statement. “We are always looking for opportunities to add value to our relationship with farmers and offer new ways to play in this market,” he said.
Alvorada, meanwhile, said the partnership would offer it new market opportunities.
Alvorada has a strong presence in the eastern part of Mato Grosso, where it sells agricultural equipment and trades soy and corn. Getúlio Viana, one of the owners of Alvorada, is also mayor of the region’s important agricultural center Primavera do Leste.
The company trades around 2 million tonnes of grains per year, with storage capacity for 650,000 tonnes.
Bunge is the largest exporter in the Brazilian agricultural sector. It reported revenues of 40 billion reais ($12.8 billion) in the country last year.