ADM acquisition increases grain presence
networks of grain elevators and rail shipping terminals in
Illinois, securing its commodity flow for food in the region.
The acquisition of family-owned Fasco Mills, which is headquartered in Mendota, Illinois, is expected to be complete on September 1 2007.
According to ADM, the grain from Fasco's thirteen grain elevators will flow into ADM's domestic and global processing and marketing network, increasing the firm's footprint tributary to the prime farm production areas of northern Illinois.
"These elevators allow ADM to offer increased marketing alternatives to farmers in northern Illinois while securing the commodity flow for ADM's biofuel, food and feed needs," said Matthew Jansen, president of ADM's Grain Group.
ADM, a global leader in the processing of corn, wheat, soybeans and cocoa, last week reported a 53 percent increase in operating profits for the year ended June 30 2007 to $3.16bn The company said this was due to its realignment and sale of assets in order to streamline its operations and focus on its core areas of expertise.
As part of this, the company sold its Arkady business to Dutch bakery ingredients firm CSM for $55m. "Our realignment and sale of assets are on target," said ADM's chairman Patricia Woertz in a statement last week.
"Our strategic capital projects are all on schedule, and we see adequate global crops to meet all needs."
In November, ADM announced a global growth strategy, focusing on the global increase in demand for biofuels.
This is reflected in the increase in operating profit for the oilseeds processing segment from $598m to $1.1bn for the year.
The company said this included a gain of $440m from the acquisition of Wilmar International, the largest agricultural processing business in Asia, earlier in the year.
Total operating profit for total corn processing increased from $877m to $1.1bn for the year, and increased from $275m to $515m for the agricultural services segment.
The increase in profit for the agricultural services segment included a gain in $153m from the sale of Agricore United, as well as improved global merchandising and transportation operating results, ADM said.
The increase in corn processing operating profit for the year was due to higher average selling prices of sweetener and ethanol products.
However, the segment's operating profit declined $45m to $241m for the final quarter due to higher net corn costs and lower ethanol sales volumes during these three months.
