CJ CheilJedang, a global food and biotech company that owns a leading animal nutrition business (known as CJ Bio), and ADM have agreed to form a new joint venture (JV) to secure a reliable, long-term source of feed-grade amino acids critical to the livestock industry, strengthening U.S. production, global supply chain resilience and U.S. food security.
“By combining CJ’s industry-leading fermentation technology to produce amino acids for animal nutrition and technical marketing with ADM’s U.S. manufacturing footprint and strong feedstock supply, the joint venture is positioned to seek enhanced cost competitiveness and support stable domestic production for North America,” said Lance Haeryong Choi, senior vice president of CJ CheilJedang. “Together, CJ and ADM will help to strengthen global food security and supply chain resilience as well as supporting American communities and manufacturing jobs.”
The new joint venture will develop, manufacture and market fermentation-derived amino acids by bringing together:
- CJ’s fermentation production facilities in Fort Dodge, Iowa, and Piracicaba, Brazil
- ADM’s Decatur, Illinois, feed-grade amino acid plant
- CJ’s Mexico, Brazil and U.S. sales offices
- Via license, CJ’s intellectual property related to feed-grade amino acids for use by the joint venture within North and South America
“Customers know that challenging global market conditions are putting continued U.S. domestic production of feed-grade amino acids, particularly lysine, at risk,” said Kris Lutt, ADM’s vice president of innovation and growth. “This joint venture will strengthen U.S. production, creating a more reliable U.S. source of supply by bringing together the right assets, products and capabilities to support continued production in a highly competitive environment. Recent decisions by the U.S. Department of Commerce and U.S. International Trade Commission to eliminate unfair trade practices affecting U.S. imports of lysine by China give us even greater confidence that this is the right step. ADM will continue to use its global fermentation capacity and expertise to meet customer needs and as a platform for growth as we explore new ways to serve food, feed and industrial markets through precision fermentation.”
CJ and ADM will give the JV exclusive rights to manufacture and sell feed-grade amino acids in the Americas. CJ will be the majority owner of the joint venture. CJ will retain ownership of its intellectual property and its global fermentation businesses outside the scope of the joint venture. ADM’s other Decatur operations and its other global fermentation assets are not included in the transaction.
The launch date for the proposed joint venture is subject to customary closing activities as well as regulatory approvals.
