ADM expands food-, feed-ingredient production in China

With the recent opening of two plants in China on two consecutive days, Archer Daniels Midland Co. has increased its capacity to serve growing regional demand for value-added food-ingredients and animal-nutrition products.
On Friday, ADM CEO Juan Luciano joined government officials and representatives from Matsutani Chemical Industry Co. Ltd., for a ribbon-cutting ceremony in the northeastern coastal city of Tianjin, marking the opening of a plant to produce Fibersol soluble dietary fiber. And on Thursday, Luciano stood alongside officials from the eastern city of Nanjing to mark the opening of a feed-premix plant—ADM’s third in the country.
Fibersol—sold and marketed through an ADM/Matsutani joint venture—enables food and beverage manufacturers to increase the fiber content of their products without impacting flavor, color or viscosity. With the global market for soluble dietary fiber growing at an annual rate of 13 percent, the Tianjin plant’s production capacity of 15,000 metric tons per year will help address food industry customers’ increasing demand.
“As more and more Chinese citizens enter the middle class, we expect that demand for Fibersol and other value-added food ingredients made by ADM will remain robust well into the future,” Luciano said.
Meanwhile, the Nanjing facility will manufacture nutritional premixes that can be added to animal rations to promote good health and optimal growth. Such premixes typically contain various vitamins and minerals, amino acids such as lysine and threonine, and other ingredients. ADM will manufacture an estimated 30,000 metric tons of premix products per year at the Nanjing facility. The company also owns premix production facilities in Tianjin and in Dalian, and a fourth is under construction in Zhangzhou.
“As China continues transitioning from a manufacturing-driven economy to a consumption-based economy, its middle class will continue to expand, and meat consumption will continue to grow,” Luciano said, noting that the U.S. Department of Agriculture has estimated that China’s production of pork, poultry and beef will increase by about 30 percent by 2024. “We therefore are confident that demand for the livestock feeds and feed ingredients we produce will continue to increase over the course of the next decade,” he added.
By expanding ADM’s geographic footprint in two value-added businesses, the Fibersol and feed premix facilities advance the strategic growth component of ADM’s framework for growing returns. That framework also includes efforts to optimize the company’s existing businesses and drive operational efficiencies at its production facilities.
ADM began operations in China in the mid-1990s, when the company acquired an animal feed premix plant in Dalian, in the country’s northeast. In recent years, ADM has grown to become one of the top exporters of agricultural products to Asia, and the company markets an extensive range of food ingredients and animal feeds and feed premixes through its network of sales offices located throughout the Asia-Pacific region.

ADM launches sustainable soy program in Brazil

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  ADM has said it will launch a sustainable soy certification program in Brazil, with a focus on European buyers.

  From WATTAgNet:
  Archer Daniels Midland Co. (ADM) has said it will launch a sustainable soy certification program in Brazil, with a focus on European buyers.
  The program will include 120 of the 6,000 Brazilian producers growing soy for ADM, specifically targets the European Union, particularly the Netherlands.
  Other companies in Brazil also are working to show their soybeans did not contribute to deforestation in the Amazon rainforest or employ slave labor. ADM said its program will expand in the coming years and likely will be launched in Paraguay as well.
  In August 2014, the first loaded vessel departed ADM’s new export terminal in Barcarena, in the northern Brazilian state of Pará. The terminal is a significant addition to ADM’s expanding logistical network in Brazil, and offers an efficient pathway for the export of grain from the increasingly productive western and northern regions of the country.
  This month, ADM reported quarterly profit higher than expected, but lower revenue. The favorable profits -- $493 million, or 77 cents per share, up from $267 million, or 40 cents per share -- were credited to strong oilseed crushing margins and robust global demand for soybean meal.
  ADM also said this month that it is building a new feed premix plant in Zhangzhou, China, and a new feed plant in Glencoe, Minnesota.
  And ADM said it will acquire complete ownership of North Star Shipping and Minmetal, which will enhance the company’s European origination and transportation network through the addition of export facilities at the Romanian Port of Constanta on the Black Sea.

ADM posts higher profit, lower revenue

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  freeimages.com

  Archer Daniels Midland Co. reported quarterly profit higher than expected, but lower revenue.

  From WATTAgNet:
  Archer Daniels Midland Co. reported quarterly profit higher than expected, but lower revenue.
  The favorable profits -- $493 million, or 77 cents per share, up from $267 million, or 40 cents per share -- were credited to strong oilseed crushing margins and robust global demand for soybean meal.
  Revenue was down 15 percent to $17.51 billion from $20.70 billion a year ago as the strong dollar limited U.S. grain exports and profit from corn processing fell on weak ethanol margins and lower biofuel production volumes.
  Earnings, excluding one-time items, increased to 80 cents per share from 64 cents per share a year ago.
  The company’s agricultural services business saw a net profit of $194 million, up from $142 million a year ago. Oilseeds processing profit rose 58 percent to $469 million from $297 million a year ago. Corn processing profit was down 39 percent to $113 million.
  New feed plants in Minnesota, China
  ADM said it is building a new feed premix plant in Zhangzhou, China, and a new feed plant in Glencoe, Minnesota.
  The China plant will manufacture nutritional feed premixes that can be added to animal rations to promote good health and optimal growth. The plant is expected to be complete in the fourth quarter of 2016.
  The Minnesota plant, expected to be complete in the first quarter of 2016, will be able to manufacture 80,000 metric tons of products per year to serve customers in Minnesota, Wisconsin and Iowa.
  Full ownership of Black Sea terminals
  Also this week, ADM said it will acquire complete ownership of North Star Shipping and Minmetal, which will enhance the company’s European origination and transportation network through the addition of export facilities at the Romanian Port of Constanta on the Black Sea.

ADM opens global headquarters in Chicago

Archer Daniels Midland Company has opened its global headquarters and customer center in downtown Chicago.
“As we continue to grow our company, this location allows us to more easily reach global markets, while keeping us in close contact with U.S. farmers, customers and operations,” said Chairman and CEO Patricia Woertz.
About 70 employees are based in the two-floor space, which also includes a culinary facility for ADM to showcase its broad portfolio of food ingredients.
The global headquarters and customer center is located at 77 West Wacker Drive, Suite 4600, Chicago, Illinois, 60601. The main telephone number for the office is +1.312.634.8100.

First loaded vessel leaves ADM’s Brazil export terminal

The first loaded vessel has departed Archer Daniels Midland Company’s new export terminal in Barcarena, in the northern Brazilian state of Pará. The terminal is a significant addition to ADM’s expanding logistical network in Brazil, and offers an efficient pathway for the export of grain from the increasingly productive western and northern regions of the country. ADM received approval to begin operations at the terminal at the end of July.
“We are pleased to see operations underway at our new terminal in Barcarena,” said Valmor Schaffer, president, ADM South America. “This terminal positions ADM to continue to grow hand in hand with Brazil’s expanding agricultural production, particularly in the country’s highly productive northern and western regions.”
ADM acquired the terminal in 2012. It has the capacity to handle approximately 1.5 million metric tons of grain on an annual basis; ADM intends to expand the terminal’s capacity to 6 million tons by 2016.
“The Barcarena terminal builds on our existing network, which uses inland waterways, rail and truck transportation to move crops and products throughout Brazil,” Schaffer added. “We are excited by the opportunities presented by Brazil’s expanding agricultural production, and look forward to continuing to be a part of the country’s success.”
ADM is one of the largest agribusiness companies in Brazil. With more than 4,700 employees, the company processes soy at four facilities, and markets the soy oil brands Concórdia and Corcovado. The company operates the largest biodiesel plant in Brazil, four fertilizer blending facilities, a cocoa processing plant, a sugar cane processing facility that produces ethanol, and more than 40 elevators across the country. In March, ADM announced plans to construct a soy protein production complex next to the company’s existing soybean processing facility in Campo Grande, Mato Grosso do Sul.

ADM, SGI announce omega-3 DHA strategic partnership

Archer Daniels Midland Company and Synthetic Genomics Inc. have entered into a long-term agreement to commercialize omega-3 docosahexaenoic acid (DHA) from algae. As part of the agreement, omega-3 DHA will be produced and marketed throughout the world by ADM’s Foods & Wellness and Animal Nutrition groups.
DHA is a long-chain omega-3 fatty acid that has been studied for its role in brain, heart and eye health. While it is typically found in fish and seafood products, extracting DHA directly from algae grown in fermentation tanks yields a highly purified form of DHA, which can then be used as a dietary supplement for humans and in animal feed.
“This partnership is an important example of ADM’s ongoing efforts to enhance returns by strengthening our portfolio of higher-margin products,” said Greg Dodson, general manager, ADM Foods & Wellness. “There is significant demand for Omega-3 DHA products. We are impressed with the leading-edge technologies that SGI uses to quickly turn commercial opportunities into realities, and we look forward to working with them to use those capabilities to further enhance our current portfolio of nutritional ingredients.”
“We are pleased to be working with ADM, a global leader in human and animal health and nutrition,” said J. Craig Venter, founder and CEO, SGI. “This agreement is a major accomplishment for SGI as it represents commercial validation of our science and technology. We are eager to continue to work with ADM to develop other unique and nutritionally sound food and nutraceutical ingredients.”
“The ADM partnership with SGI will prove beneficial for both companies by capitalizing on the strengths of SGI’s technologies and know-how, while using ADM’s significant scale and production capabilities to commercialize important products demanded by our customers,” said Brent Fenton, president, ADM Animal Nutrition. “The end result will be an improved animal nutrition portfolio, which will deliver value both to our customers and our shareholders.”
“We are excited to have this partnership with ADM that will allow them to provide a real alternative to what had been a very short list of plant-derived DHA ingredients,” said Jon Getzinger, senior vice president at SGI. “Having a real choice in the market will provide manufacturers the opportunity for broader inclusion of this essential nutrient in food, beverage, nutraceutical and animal feed applications.”

ADM reports adjusted first quarter earnings of $0.55 per share

Archer Daniels Midland Company reported adjusted earnings per share of $0.55 for the quarter ended March 31, up from $0.46 in the same period last year. Net earnings for the quarter were $267 million, or $0.40 per share, comparable to the $0.41 per share in the same period one year earlier.Segment operating profit was $691 million, up 10 percent from the year-ago period. Adjusted segment operating profit was $780 million, up 17 percent from the year-ago period.
“Our businesses delivered mixed results in the first quarter,” said ADM Chairman and CEO Patricia Woertz. “Our ag services business again generated weak results due to a low margin environment as well as logistics and weather challenges in the U.S. Continued strong performance in corn was supported by the robust ethanol market. And the sustained, solid results in oilseeds were driven by good margins and volumes in North and South American soybean crushing.
“We continued to make good progress during the quarter in our ongoing portfolio management and other key initiatives to improve the earnings power and returns of the company.”


First quarter 2014 highlights


• Adjusted earnings per share of $0.55 excludes approximately $159 million in pretax last-in, first-out charges, or $0.15 per share.
• Oilseeds processing operating profit increased $50 million, as North American soybean crushing had strong utilization amid good meal demand, and South American soybean crushing and origination benefited from large harvests, good demand, and an improved logistics environment.
• Corn processing operating profit increased $64 million on strong results from ethanol.
• Agricultural services operating profit increased $2 million, as market conditions and higher costs limited merchandising and handling margins.

ADM to acquire remaining stake in Toepfer

Archer Daniels Midland Company announced three significantactions in the company’s ongoing portfolio management: the acquisition of theremaining stake of Alfred C. Toepfer International GmbH, an agreement to sellthe company’s South American fertilizer business, and pursuit of the sale of thecompany’s chocolate business.
“We are committed to ongoing portfolio management to realize value from our businesses and to deploy our capital where it can best improve returns,” said ADM Chairman and CEO Patricia A. Woertz. “The actions we are announcing today are results of this continuing process. Each of these transactions will help ADM continue to improve returns and create shareholder value.
“These actions complement recent demand-driven strategic investments, such as our $250 million high-value protein facility in Brazil,” Woertz added. “We are taking action to realize returns today and positioning ourselves for continuing profitable growth around the globe in the future.”
ADM will acquire the remaining 20 percent minority stake of Alfred C. Toepfer International for €83 million (US$114.7 million), representing about 1.1x net book value. The proposed transaction, which is occurring through the exercise of a put agreement by Union InVivo, will be subject to customary regulatory approvals. Since 2002, ADM has owned 80 percent of Toepfer; InVivo has held the remaining 20 percent since 2010.
“Toepfer has an important presence in critical origination areas as well as growing destination markets,” said Woertz. “For years, ADM has benefitted from our investment in Toepfer. Now, full ownership will allow us to strengthen this business and fully integrate it into ADM’s global origination network.”
InVivo will remain a strategic business partner for ADM in Europe.
ADM also has signed an agreement to sell its fertilizer business in Brazil and Paraguay to The Mosaic Company for $350 million. The transaction consists primarily of five ADM-owned blending facilities in Brazil and Paraguay. The purchase price includes $150 million in working capital. As part of the transaction, ADM will purchase fertilizer from Mosaic after the closing and will continue to supply certain fertilizer customers in Brazil and Paraguay. The proposed sale will be contingent on customary regulatory approvals.
And, ADM will pursue the sale of its chocolate business, while retaining the majority of its cocoa press operations. The company has engaged advisers to facilitate the sale process. ADM has chocolate manufacturing operations in Hazleton, Pa.; Milwaukee, Wis.; Georgetown, Ontario; Liverpool, U.K.; Manage, Belgium; and Mannheim, Germany.

ADM to establish global headquarters in Chicago

Archer Daniels Midland Company (ADM) has selected Chicago, Ill., as the location for its global headquarters and customer center.
"While we considered other global hubs, Chicago emerged as the best location to provide efficient access to global markets while maintaining our close connections with U.S. farmers, customers and operations," said ADM Chairman and CEO Patricia Woertz. "Chicago also provides an environment where we can attract and retain employees with diverse skills, and where their family members can find ample career opportunities.
"In keeping with our intention to establish our global center in a cost-effective manner, we expect to locate a small corporate team of about 50 to 75 employees in the new center," said Woertz. In addition, Woertz said that the company will now evaluate alternative sites for its new information technology and support center, where it expects to locate about 100 new IT jobs. The company said it will continue to consider potential locations for the IT center in several states and expects to make a decision by mid-year 2014.
Woertz said that one of the options the company considered was a comprehensive plan that would have established both a larger global headquarters and the information technology center in one location and included state government support and multi-year commitments to stakeholders. However, that plan could not be realized within ADM's timeframe. "We decided to move forward in the way that best meets our organizational objectives," said Woertz.
ADM expects that it will continue to have a significant presence in Decatur, Ill., which will be designated the company's North American headquarters. The company does not plan any layoffs in connection with the move to a new global center.
"We appreciate the interest and support expressed by many civic and governmental leaders as we have considered a variety of options for our new global center," said Woertz. "We look forward to finalizing the selection of a site in Chicago soon, and to accelerating the selection of a suitable location for our IT center."

GrainCorp CEO resigns after Australia blocks ADM takeover

GrainCorp Ltd. CEO Alison Watkins has resigned after an A$2.2 billion takeover bid by Archer Daniels Midland Co. (ADM) was blocked by Australia.
GrainCorp is seeking candidates to replace Watkins; in the meantime, Chairman Don Taylor will become temporary executive chairman. Watkins will join Coca-Cola Amatil Ltd. in March as the company's group managing director.
Australia Treasurer Joe Hockey blocked the takeover by Decatur, Ill.-based ADM on national interest grounds. Buying GrainCorp, the only major publicly traded grain merchant left in Australia after the country deregulated its wheat-export system, would have given ADM control of 280 storage sites and seven of the 10 ports that ship grain in bulk from the nation's east coast.
The decision to block the takeover is the first time a U.S. company has been blocked from buying Australian assets by the treasurer. ADM had agreed to buy GrainCorp for A$12.20 per share in April. ADM had planned to invest as much as A$250 million in GrainCorp, focused mainly on improvements to its rail infrastructure. Without the takeover, GrainCorp will likely need to move at a slower pace, said Taylor. The company wants to improve infrastructure to boost earnings and tap rising demand in the Middle East, Asia and Africa.

ADM to establish new global headquarters, customer center

Archer Daniels Midland Company has announced that it is exploring establishing a new global headquarters and customer center.
"Our company is growing and becoming more global and more customer-centric," said Patricia Woertz, ADM chairman and CEO. "To continue to succeed, we need a global center in a location that allows us to travel and work efficiently with customers and employees throughout the world. We also need an environment where we can attract and retain employees with diverse skills, and where family members can find ample career opportunities."
ADM expects to locate a small, corporate team at the global center, with approximately 100 jobs relocated to the center. In addition, the company plans to create a new IT tech center at the same location, adding approximately 100 new positions there over the next few years. The company is not planning any layoffs in connection with the move to a new global center.
"As we look to establish the new global center, we remain firmly committed to the 4,400 colleagues who will continue to work in Decatur, and to the economic strength and viability of the Decatur community," said Woertz.
In recognition of the breadth and importance of the work that will continue to be centered in Decatur, the company's office there will be designated the North American headquarters. ADM also maintains regional headquarters in Rolle, Switzerland; São Paulo, Brazil; and Shanghai, China.

ADM to acquire GrainCorp

Archer Daniels Midland Company announced that it has completed due diligence on GrainCorp Limited and intends to make a cash offer to acquire the outstanding common shares of the company for A$12.20 (US$12.42) per share under the terms of the takeover bid implementation deed signed with GrainCorp the week of April 21.
“We believe the offer delivers strong value for both companies’ shareholders,” said ADM chairman and CEO Patricia Woertz. “The acquisition fits well with our growth strategy and will meet our return objectives. We are also confident in the cultural fit of our two companies: we share similar values of integrity, excellence and safety, with strong commitments to people, communities, customers and sustainability."
The offer implies an aggregate transaction value of about A$3.4 billion (US$3.46 billion). The transaction value reflects the weighted average cost of acquiring the initial 19.8 percent stake in GrainCorp at an average of A$11.24 (US$11.45) per share, and the remaining shares of GrainCorp at A$12.20 per share. The transaction meets ADM’s key financial objectives, and will be earnings accretive in the first full year. ADM will fund the acquisition through a combination of operating cash flows and debt.
GrainCorp has indicated that the ADM offer would be unanimously recommended by the GrainCorp board, subject to there being no superior proposal, an independent expert confirming that the offer is fair and reasonable, and the regulatory conditions for the acquisition being satisfied or waived by Dec. 31, 2013.

ADM sells interest in Gruma, related ventures

Archer Daniels Midland Company announced that it has sold its 23 percent interest in Gruma S.A.B. de C.V. and its equity investments in related joint ventures for $450 million plus an additional contingent payment of up to $60 million.
According to ADM, the sale is part of the company's ongoing portfolio management actions to redeploy capital into key strategic areas that will help drive higher returns in the future.
Under the terms of the sale, ADM received $450 million up front and will also receive up to $60 million in future contingent payments over the next 42 months. The contingent payments are triggered based upon various conditions, including the increase in Gruma’s stock market price, over the closing price of Gruma’s stock determined for purposes of the transaction, at the end of the 42 month period; the difference between the price of Gruma’s stock fixed for public offers made by Gruma and the closing price; the acquisition, by any strategic investor of Gruma, of 15 percent or more of Gruma’s capital stock; or the percentage of Gruma’s shares that are considered to be held by the public at any time.
While ADM has exited from its ownership position in Gruma and related investments, ADM said it expects to maintain a healthy and strong commercial relationship with Gruma globally. Bank of America Merrill Lynch was the financial adviser to ADM in the transaction.