[Edaily Reporter Kim Ji-woo ] CJ CheilJedang Corp(097950)is teaming up with global grain company ADM to strengthen its competitiveness in the North American feed-grade amino acid business. The plan is to consolidate the production facilities and sales networks of both companies into a joint venture to enhance competitiveness across the entire process, from raw material procurement to production and supply.

CJ CheilJedang Corp announced on the 2nd that it has signed an agreement with U.S.-based Archer Daniels Midland (ADM) to establish a joint venture (JV) for the feed-grade amino acid business in the Americas. Under the agreement, CJ BioAmerica, a subsidiary of CJ CheilJedang Corp, will hold a 63% stake in the joint venture, while ADM will hold 37%.

CJ CheilJedang Corp. plans to contribute production facilities in Fort Dodge, Iowa, and Piracicaba, Brazil, as well as sales offices in the U.S., Mexico, and Brazil, to the joint venture as in-kind contributions.

To this end, all feed-grade amino acid business operations held by CJ America, a subsidiary of CJ CheilJedang Corp., along with a 99.99% stake in CJ CheilJedang Corp.’s Mexican subsidiary and a 100% stake in the Brazilian subsidiary held by the Indonesian subsidiary, will be contributed to the joint venture through CJ BioAmerica.

ADM will also contribute key assets, including the amino acid production facilities and equipment at its Decatur, Illinois, plant, as an in-kind contribution. Other related business assets held by the two companies will not be included in this joint venture.

CJ CheilJedang Corp produces and sells amino acids—such as lysine and tryptophan—used as additives in livestock feed. Feed-grade amino acids are a key product line of CJ CheilJedang Corp’s bio business, which is based on microbial fermentation technology.

Through this joint venture, the two companies plan to combine CJ CheilJedang Corp.’s amino acid production technology and business expertise with ADM’s grain raw material value chain and local production and logistics infrastructure. In particular, they will focus on securing a stable supply of raw materials for feed-grade amino acids and enhancing production and supply competitiveness in the Americas.

Before the joint venture can be formally established, it must complete regulatory approval procedures, including filing for merger approval with the relevant authorities. Accordingly, the specific establishment schedule and details are subject to change depending on the outcome of these procedures.

A CJ CheilJedang Corp official stated, “Following procedures such as merger approval, the joint venture is expected to serve as a stepping stone for the future evolution of the feed-grade amino acid business by establishing itself as a stable supplier in the Americas market.”