Penford and Cargill intend to form a joint venture combining their industrial starch businesses in North America.

The companies are planning to create an enhanced specialty-starch ingredient manufacturing and distribution business, with estimated annual sales of about US$200mn. The companies have not disclosed financial terms and any final agreement is subject to various approvals.

The joint venture will use both companies' Iowa-based, industrial starch facilities, and a Cargill facility in Memphis. A Cargill site in Dayton, Ohio, will meanwhile discontinue industrial starch operations.

Penford makes specialty natural-based ingredient systems for various applications, while Cargill distributes agricultural, food, financial and industrial products and services.