ADM relying on size, diversification to meet needs
NEW YORK CITY — As the global production of grains and oilseeds increases, Decatur, Ill.-based Archer Daniels Midland Co. is making progress on efforts to expand and improve its origination and transportation network, said Steve Mills, executive vice-president and chief financial officer.
To that end, Mr. Mills, speaking at the BMO Capital Markets Agriculture, Protein and Fertilizer Conference held May 19 in New York, said ADM selectively has been adding elevators and improving throughput capabilities in North and South America, growing its origination footprint in Canada and Europe, and expanding its destination business in the Middle East, Asia and Africa.
“We’ve acquired seven ocean-going vessels, and we’ve been modernizing our North American barge fleet,” Mr. Mills said. “In South America, we’re expanding the barge fleet and we’ve added tugboats. We’ve also grown our origination footprint by adding silos in Brazil, Paraguay and Uruguay and in Argentina, where we already are the largest exporters of grains and oilseeds. We’re expanding our port operations to increase our presence in that very important soybean production region.”
ADM also is making headway in its efforts to diversify its product portfolio and optimize flexibility within its corn processing operations. Mr. Mills said the company is expanding the number of products in its industrial chemicals and advanced bio-fuels portfolio, as well as expanding its global carbohydrate processing capabilities.
Two of the company’s recent ethanol expansions — in Columbus, Neb., and Cedar Rapids, Iowa — are expected to provide a boost to ADM’s long-term strategy. The Columbus ethanol dry mill is fully operational while the Cedar Rapids facility will be on-line this summer.
“Each of these plants is built to produce 300 million gallons of ethanol, although our permits allow us to expand capacity up to 400 million gallons,” Mr. Mills said. “These plants are located next to existing wet corn mills to leverage our infrastructure and our extensive logistics network.”
Mr. Mills also used the forum as an opportunity to address the 32 billion-lb corn sweetener market, of which ADM is a major player. He indicated the recent shift of consumers away from high-fructose corn syrup to sugar “may be relatively short-lived.”
“It’s important to understand that nutritionally, high-fructose corn syrup is the same as sugar, honey and many other sweeteners,” he explained. “Remember that the human digestive system converts sucrose, or table sugar, into fructose and glucose molecules and fructose and glucose are naturally occurring sweeteners, present in varying proportions in the fruits and fruit juices that we enjoy.”