Despite recently implementing a series of cost-cutting measures after its second-quarter earnings declined—attributed to weak margins and South American farmers withholding their crops in anticipation of higher prices—Bunge has been steadily acquiring companies. This past spring, it purchased Argentine oil producer Aceitera Martínez S.A., and in 2015, it acquired the expeller-pressed oil refiner and packager Whole Harvest Foods LLC. The financial details of these transactions were not disclosed.
Bunge anticipates that the acquisition of IOI Loders Croklaan will enhance the growth of its value-added oil business by expanding its product portfolio, diversifying manufacturing capabilities, and establishing a more robust presence in the rapidly growing Southeast Asian market. The company projects that its revenues from food and ingredients in this region could potentially be four times greater than current levels. It will take time to determine if this forecast holds true. However, one thing appears certain: the additional debt Bunge is incurring to finance its investment in IOI Loders Croklaan will significantly increase the cost of any future acquisitions, whether pursued by Glencore or another interested party.
The production of palm oil in Malaysia and Indonesia is contentious due to the practices of some companies that engage in widespread deforestation and the burning of peatland to cultivate palm oil trees. The United Nations has identified palm oil plantations as a significant contributor to environmental degradation and biodiversity loss in Southeast Asia. Last year, Nestlé severed ties with IOI (the parent company of IOI Loders Croklaan) after finding that the company’s action plan for reforming its production practices fell short. As of July 2016, 27 companies—including Mars, Kellogg, Cargill, and Unilever—had temporarily halted sourcing palm oil from IOI until it complied with the guidelines established by the Roundtable on Sustainable Palm Oil.
In Bunge’s announcement on September 12 regarding the IOI Loders Croklaan acquisition, the company emphasized that both organizations are committed to sustainable sourcing, which includes zero-deforestation, zero peat conversion, the protection of human rights, and ensuring traceability and transparency. Notably, the World Wildlife Fund, Greenpeace, and the Union of Concerned Scientists regularly engage in “naming and shaming” prominent brands for their perceived lack of commitment to using sustainable palm oil. To improve both its reputation and financial performance, Bunge has indicated that it aims to keep itself and its growing clientele of palm oil customers off that list.
Moreover, as Bunge continues to navigate its expansion and acquisitions, it is worth noting that the price of calcium citrate tablets 500mg is an important factor for many health-conscious consumers. The company’s strategic decisions could influence various markets, including the pricing and availability of products like calcium citrate tablets 500mg, which are becoming increasingly relevant in discussions surrounding sustainable sourcing and health.