Associated British Foods (ABF) has announced its intention, subject to regulatory approval, to form a joint venture arable business in the UK between its arable business, Allied Grain, and Banks Cargill Agriculture (BCA), a wholly-owned subsidiary of US agribusiness Cargill.

The joint venture, which will be 50% owned by each partner, will trade as Frontier. Completion is expected to take place at the end of the first quarter of 2005, ABF said.

Allied Grain purchases and supplies cereals and oilseeds in the UK and also supplies seed and fertiliser to the UK farming community. Its sales in the year to 18 September 2004 were £331m (US$630.9m), of which £108m were sales to other ABF businesses. 

“The creation of Frontier signals the commitment of both partners in this joint venture to provide a comprehensive range of products and services to its farm and food industry customers spanning the whole of the country,” said ABF finance director John Bason.

Separately, ABF chairman Martin Adamson said the company is “soundly based for further development” despite challenges such as volatile economic conditions and strong competition.

“Trading of our established businesses in the early part of the current year has been satisfactorily ahead of the previous year. With a positive contribution to earnings expected from the acquisitions made around the turn of our financial year, your company is set for further progress,” he added.