Manchester, England, April 11 - Cargill has expanded its food ingredient and sweetener businesses across Europe from Spain to Russia and is now looking to fill a hole in the middle, top officials said in an interview.
"There is quite a bit in the middle where we don't yet have a big footprint. We have a little bit in Romania, very small. We are actively looking at that whole middle, including Romania," Bram Klaeijsen, head of Cargill's European food ingredients business told Reuters in an interview.
Cargill officially opened a wheat sweetener plant in Manchester, England on Thursday, one of the U.S. agribusiness's most westerly locations in Europe. To the east it has built large businesses in Russia and Turkey.
"We have a couple of strong hopes and so we are now actively looking to increase those strong hopes," he said in an interview at the plant opening on Thursday.
Frank van Lierde, head of Cargill's European sweetener operations, said in a joint interview with the two business heads, that the target area included countries which have recently joined the European Union.
"The whole region is expanding their agricultural production very rapidly. What they are still lacking for the time being is purchasing power but that is increasing, especially for those countries that have joined the EU," he said.
"What we experienced in the mid-90s in Poland we see happening now in other countries," said van Lierde who led the expansion of the company's business in Poland.
Klaeijsen said Cargill found it easier to operate in businesses it completely controlled due to potential difficulties in joint ventures with technology transfers.
RISING PRICES
"Our objective is to be 100 percent owned," he said.
The Manchester plant, whose syrups are used in a range of foods from ice cream to beer, will process about 750,000 tonnes of wheat a year to make sweetener as well as byproducts which can be used in the animal feed sector.
Cargill had previously operated two sweetener plants in Britain which used imported French maize at the key input.
The company spent about 75 million pounds ($148.1 million) to convert the Manchester plant to domestically produced wheat from imported maize which the change completed in February. It has also closed a plant in Tilbury, southern England.
Van Lierde noted wheat prices had risen sharply since the company decided to switch but added domestic competitors were also wheat-based and so faced a similar rise in costs.
He expected that prices would also fall back from current high levels with a larger harvest anticipated this summer.
"What we do see in Europe is these high price levels are incentivising farmers to grow more wheat. I think if you look at the expectations (for the next crop) so far weather circumstances have been very good throughout Europe," he said.
"People do expect a good crop for the UK, which should positively affect the pricing environment for cereals."
Grain analysts have forecast that Britain's wheat crop could rise by 20 to 25 percent this year with plantings up by more than 10 percent and yields seen rising from last year's below average levels.
Van Lierde said the rise in costs could also generate renewed debate about genetically modified (GM) crops in Europe, where use of GM plants for food is deeply unpopular.
Cargill has said it does not use GM ingredients in its products for European customers.
"I think consumers at large are obviously concerned about food prices. If there is a moment to discuss GM material, this is definitely the moment," he said.
There has been significant hostility towards genetically modified crops in Europe linked to environmental and food safety concerns although they are widely used in many other areas including the United States, China and Latin America.