The Archer Daniels Midland Company (NYSE: ADM) is a conglomerate headquartered in Decatur, Illinois.[2][3][4] ADM operates more than 270 plants worldwide, where cereal grains and oilseeds are processed into products used in food, beverage, nutraceutical, industrial and animal feed markets worldwide.
ADM also provides agricultural storage and transportation services. The American River Transportation Company along with ADM Trucking, Inc are subsidiaries of ADM. ADM's revenues for fiscal year 2010 were US $61.7 billion.
Archer Daniels Midland Company, incorporated in 1923, is principally engaged in procuring, transporting, storing, processing, and merchandising agricultural commodities and products. The Company is a processor of oilseeds, corn, wheat, cocoa, and other agricultural commodities and is a manufacturer of vegetable oil and protein meal, corn sweeteners, flour, biodiesel, ethanol, and other food and feed ingredients. The Company also has a grain elevator and transportation network to procure, store, clean, and transport agricultural commodities, such as oilseeds, corn, wheat, milo, oats, and barley, as well as processed agricultural commodities. The Company’s operations are classified into three business segments: Oilseeds Processing, Corn Processing, and Agricultural Services. In January 2011, the Company acquired Alimenta (USA), Inc., from Alimenta S.A.
Oilseeds Processing
The Oilseeds Processing segment includes activities related to the origination, merchandising, crushing, and further processing of oilseeds, such as soybeans, cottonseed, sunflower seeds, canola, rapeseed, peanuts, flaxseed, and palm into vegetable oils and protein meals. The Oilseeds Processing segment principally produces and markets processed oilseed products as ingredients for the food, feed, energy, and other industrial products industries. Crude vegetable oil is sold as is or is further processed by refining, blending, bleaching, and deodorizing into salad oils. Salad oils are sold as is or are further processed by hydrogenating and/or interesterifying into margarine, shortening, and other food products. Partially refined oil is used to produce biodiesel or is sold to other manufacturers for use in chemicals, paints, and other industrial products. Oilseed protein meals are principally sold to third parties to be used as ingredients in commercial livestock and poultry feeds. The Oilseeds Processing segment also produces natural health and nutrition products and other specialty food and feed ingredients. In North America, cottonseed flour is produced and sold primarily to the pharmaceutical industry and cotton cellulose pulp is manufactured and sold to the chemical, paper, and filter markets. In South America, the Oilseeds Processing segment utilizes a network of grain elevators, port facilities and transportation assets to buy, store, clean, and transport agricultural commodities and operates fertilizer blending facilities.
The Company produces a range of edible soy protein products including soy flour, soy grits, soy protein concentrates and soy isolates that are used in processed meats, baked foods, nutritional products, snacks, and dairy and meat analogs. From co-products of oilseeds, the Company produces natural source vitamin E, tocopherol antioxidants and phytosterols, which are marketed to the dietary supplement and food industry. The Company produces soy isoflavones, a dietary supplement, from a co-product of edible soy processing. Golden Peanut Company LLC, a joint venture between the Company and Alimenta (U.S.A.), Inc., is a supplier of peanuts and peanut derived ingredients to both the domestic and export markets. The Company has a 50% ownership interest in this joint venture. The Company has a 50% interest in Edible Oils Limited, a joint venture between the Company and Princes Foods to procure, package, and sell edible oils in the United Kingdom. The Company recently announced the formation of a new edible oils joint venture with Princes Foods in Poland.
Stratas Foods LLC, a joint venture between the Company and ACH Jupiter, LLC, a subsidiary of Associated British Foods, procures, packages, and sells edible oils in North America. The Company has a 50% ownership interest in this joint venture. The Company has a 16.4% ownership interest in Wilmar International Limited (Wilmar), a Singapore publicly listed company. Wilmar is a processor and merchandiser of palm and lauric oils, and a major oil palm plantation owner. The Company is a supplier of agricultural commodity raw materials to Edible Oils Limited, Stratas Foods LLC, and Wilmar.
Corn Processing
The Company’s Corn Processing segment is engaged in corn wet milling and dry milling activities, primarily in the United States, related to its production of ingredients used in the food and beverage industry including syrup, starch, glucose, dextrose, and sweeteners. Dextrose is also used by the Company as a feedstock for its bioproducts operations. Corn gluten feed and meal, as well as distillers grains, is produced for use as animal feed ingredients. Corn germ, a by-product of the wet milling process, is further processed as an oilseed into vegetable oil and protein meal. The Company’s Corn Processing segment is engaged in corn wet milling and dry milling activities, primarily in the United States, related to its production of ingredients used in the food and beverage industry including syrup, starch, glucose, dextrose, and sweeteners. Dextrose is also used by the Company as a feedstock for its bioproducts operations. Corn gluten feed and meal, as well as distillers grains, is produced for use as animal feed ingredients. Corn germ, a by-product of the wet milling process, is further processed as an oilseed into vegetable oil and protein meal.
Almidones Mexicanos S.A., in which the Company has a 50% interest, operates a wet corn milling plant in Mexico. Eaststarch C.V. (Netherlands), in which the Company has a 50% interest, owns interests in companies that operate wet corn milling plants in Bulgaria, Hungary, Slovakia, and Turkey. The Company has a 50% interest in Telles, LLC (Telles), a joint venture between the Company and Metabolix to market and sell PHA, which is being produced in a facility owned by the Company. Red Star Yeast Company, LLC produces and sells fresh and dry yeast in the United States and Canada. The Company has a 40% ownership interest in this joint venture.
Agricultural Services
The Agricultural Services segment utilizes the Company’s extensive grain elevator and transportation network to buy, store, clean, and transport agricultural commodities, such as oilseeds, corn, wheat, milo, oats, rice, and barley, and resells these commodities primarily as food and feed ingredients and as raw materials for the agricultural processing industry. The Company processes and distributes edible beans in the United States for use as a food ingredient. The Company produces and distributes formula feeds and animal health and nutrition products to the livestock, dairy, poultry, and pet food industries. Alfred C. Toepfer International (Toepfer), in which the Company has an 80% interest, is a global merchandiser of agricultural commodities and processed products. Toepfer has 36 sales offices worldwide and operates inland, river, and export facilities in Argentina, Romania, Ukraine, and the United States. The Company has a 45% interest in Kalama Export Company, a grain export elevator in Washington.
Other
The Company is engaged in milling wheat, corn, and milo into flour in the United States, Canada, the Caribbean, and the United Kingdom. The Company produces bakery products and mixes, wheat starch, and gluten, which are sold to the baking industry. The Company also mills milo to produce industrial flour used in the manufacturing of wallboard for the building industry. Gruma S.A.B. de C.V. (Gruma), in which the Company has a 23.2% interest, is a producer and marketer of corn flour and tortillas with operations in Mexico, the United States, Central America, South America, and Europe. Additionally, the Company has a 20% share, through a joint venture with Gruma, in six United States corn flour mills and one in Italy. The Company also has a 40% share, through a joint venture with Gruma, in nine Mexican wheat flour mills. Hickory Point Bank and Trust Company, fsb, a wholly owned subsidiary of the Company, furnishes public banking and trust services, as well as cash management, transfer agency, and securities safekeeping services, for the Company.
ADM made its first-ever foray into consumer food products with the characteristically low-profile launch of its Harvest Burger brand soy-based meat substitute in the early 1990s. The product's reduced fat, calories, and cholesterol attracted American consumers, many of whom sought out the product even before it had advertising support. In 1993 the Pillsbury Company assumed responsibility for supermarket retailing of Harvest Burgers. For the hungry of the world, the soy product was an inexpensive source of protein with a longer shelf life than traditional sources such as meat and milk. As CEO Andreas pointed out in a 1993 interview with Direct Marketing magazine, 'You can feed 20 times as many people off of an acre of land by raising soy alone, than growing soy and feeding it to an animal and then eating that animal.' Andreas called the development of the meatlike soy product 'the most important food development of this century.'
During the second half of the 1990s, ADM experienced significant growth, with revenues increasing from $12.56 billion to $16.11 billion from fiscal 1995 to fiscal 1998 before falling to $14.28 billion in 1999. Net earnings declined throughout this period, however, falling from the record level of $795.9 million in 1995 to $266 million in 1999. ADM blamed the declining results of the late 1990s largely on two coinciding phenomena: the Asian economic crisis, which later spread to Russia and Latin America, and record crop harvests. The economic downturn significantly dampened demand for protein and vegetable oils in the affected areas, while at the same time prices for farm commodities fell to their lowest levels in more than a decade.
The squeeze on profit margins led to increasing competition and consolidation in the food industry. Archer-Daniels-Midland was heavily involved in this consolidation and spent about $4.6 billion in the second half of the 1990s building new plants, expanding existing ones, and making numerous acquisitions. In mid-1997 ADM paid $470 million for the cocoa business of W.R. Grace & Co., thereby entering the chocolate and cocoa industry. The company quickly added six additional cocoa-processing plants purchased from E D & F Main Group PLC for $223 million. ADM organized these operations as its ADM Cocoa Division, which by the end of the 1990s was grinding 450,000 metric tons of cocoa beans per year, about 20 percent of the world crop. Also in 1997 the company acquired Quincy, Illinois-based soybean processor Moorman Manufacturing Co. for $296 million; purchased a 42 percent stake in United Grain Growers of Canada, a firm involved in grain merchandising and other agricultural activities; acquired a 30 percent stake in Minnesota Corn Processors, operator of wet corn milling plants in Minnesota and Nebraska; and spent $258 million for a 22 percent interest in Mexico-based Gruma S.A. de C.V., the world's largest producer and marketer of corn flour and tortillas. During this period ADM also formed a number of joint ventures, including International Malting Company, 40 percent owned by ADM and 60 percent by the LeSaffre Company, which operated barley malting plants in the United States, Australia, Canada, and France; ADM-Riceland Partnership, a 50-50 venture with Riceland Foods Inc., which processed rice and rice products; and a joint venture with Gruma, 40 percent owned by ADM, that operated seven wheat flour mills in Mexico. The most significant divestments during the later 1990s were those of Supreme Sugar and British Arkady.
Many of these deals occurred after G. Allen Andreas, nephew of Dwayne Andreas, was named CEO in April 1997. Allen Andreas's path to the top was cleared following the downfall of Michael D. Andreas, Dwayne's son and heir-apparent, in a highly publicized price-fixing scheme. The scheme first came to light in 1995 when Mark E. Whitacre, a whistleblower for the FBI, was fired by ADM from his position as head of its BioProducts division for allegedly embezzling millions of dollars from the company. Whitacre had been secretly acting as an informant to the FBI, providing the bureau with documentation, including audio- and videotapes, of alleged price-fixing schemes involving three products derived from corn: lysine, high-fructose corn syrup, and citric acid. At the center of the collusion were two top ADM executives: Vice-Chairman Michael Andreas and Terrance S. Wilson, head of the company's Corn Processing division. In late 1996, following guilty pleas by its partners in price fixing (including Ajinomoto Co. and Kyowa Hakko Kogyo, both of Japan), Archer-Daniels-Midland pleaded guilty to two counts of fixing prices for lysine, a hot-selling livestock feed additive, and for citric acid, and agreed to pay $100 million in fines, by far the largest criminal antitrust settlement in history. By late 1998 the company had paid nearly another $100 million to settle lawsuits brought by customers and investors. Whitacre in 1998 was sentenced to nine years in prison for swindling $9.5 million from ADM; the following year he was sentenced to an additional 20 months for his role in price-fixing at ADM (he had originally been given immunity in the price-fixing case but it was stripped after prosecutors learned of the embezzlement). Wilson retired from ADM in 1996 and Michael Andreas went on an indefinite leave of absence. They both were convicted by a federal jury of price fixing in 1998, and began serving two-year sentences in October 1999. In addition, they were each fined $350,000.
Archer-Daniels-Midland's legal difficulties were far from over. The company faced a number of class-action civil antitrust lawsuits, the largest of which involved purchasers of high-fructose corn syrup--including beverage giants PepsiCo, Inc., and the Coca-Cola Company--which could cost ADM and other defendants hundreds of millions of dollars. ADM was also the subject of government investigations in Europe and Mexico. At the end of the 20th century, Archer-Daniels-Midland faced the challenge of overcoming the huge amounts of negative publicity that had resulted from the various price-fixing probes and suits. It appeared that it would take years before the aura of scandal would be removed from the ADM name.
Principal Subsidiaries:ADM Agri-Industries Ltd. (Canada); ADM Europe BV (Netherlands); ADM Europoort BV (Netherlands); ADM/Growmark River Systems, Inc.; ADM Beteiligungs GmbH (Germany); ADM International Ltd. (U.K.); ADM Investor Services, Inc.; ADM Ireland Holdings Ltd.; ADM Milling Co.; ADM Oelmuhlen GmbH & Co. KG (Germany); ADM Ringaskiddy (Ireland); ADM Transportation Co.; ADMIC Investments NV (Netherlands Antilles); Agrinational Insurance Company; Agrinational Ltd. (Cayman Islands); Alfred C. Toepfer International (Germany; 50%); American River Transportation Co.; Ardanco, Inc. (Guam); Collingwood Grain, Inc.; Compagnie Industrielle Et Financiere (CIP) (Luxembourg; 42%); Consolidated Nutrition, L.C. (50%); Erith Oil Works Ltd. (U.K.); Fleischmann Malting Company, Inc.; Gruma S.A. de C.V. (Mexico; 22%); Hickory Point Bank & Trust Co.; Midland Stars, Inc.; Oelmuhle Hamburg AG (Germany; 95%); Premiere Agri Technologies Inc.; Tabor Grain Co.
Principal Divisions:ADM North American Oilseed Processing Division; ADM South American Oilseed Processing Division; ADM Cocoa Division; ADM BioProducts Division; ADM Animal Health and Nutrition Division; ADM Food Additives Division; ADM Nutraceutical Division; ADM Protein Specialties Division; ADM Transportation Division; ADM Research Division.
Principal Competitors:Ag Processing Inc; Agribrands International, Inc.; Ajinomoto Co., Inc.; The Andersons, Inc.; Bartlett and Company; Cargill, Incorporated; Cenex Harvest States Cooperatives; ConAgra, Inc.; ContiGroup Companies, Inc.; Corn Products International, Inc.; Eridania Beghin-Say; Farmland Industries, Inc.; GROWMARK Inc.; Pioneer Hi-Bred International, Inc.; Riceland Foods, Inc.; The Scoular Company; Southern States Cooperative, Incorporated; Tate & Lyle PLC; Universal Corporation.
OVERALL
Beta: 0.24
Market Cap (Mil.): $23,592.93
Shares Outstanding (Mil.): 637.30
Annual Dividend: 0.64
Yield (%): 1.73
FINANCIALS
ADM Industry Sector
P/E (TTM): 12.23 24.78 20.76
EPS (TTM): 73.53 -- --
ROI: 7.98 3.15 8.13
ROE: 12.68 4.54 14.58
Key Dates:
1878: John W. Daniels begins crushing flaxseed to make linseed oil in Ohio.
1902: Daniels moves to Minneapolis to organize the Daniels Linseed Company.
1903: George A. Archer joins the firm, which is renamed the Archer-Daniels Linseed Company within a few years.
1923: Company purchases the Midland Linseed Products Company, then incorporates as the Archer-Daniels-Midland Company.
1930: Commander-Larabee Company, a major flour miller, is acquired.
1966: Dwayne O. Andreas purchases a block of stock, gaining seats on the company board and the executive committee.
1970: Andreas is named CEO.
1971: Company purchases Corn Sweeteners, Inc., producer of high-fructose syrups, glutens, oil, and caramel color.
1972: Andreas is elected chairman.
1981: The Columbian Peanut Company is acquired.
1986: Company forms grain marketing joint venture with Growmark.
1996: Company pleads guilty to two counts of fixing prices of lysine and citric acid and pays $100 million in criminal fines.
1997: Company acquires W.R. Grace's cocoa business, marking its entry into that sector; G. Allen Andreas is named CEO.
1998: Three former company executives, including Michael D. Andreas, are convicted by a federal jury of price fixing.
1999: Dwayne Andreas retires as chairman; CEO Allen Andreas is named to the additional post of chairman; Michael Andreas begins serving two-year prison sentence.
Statistics:
Public Company
Incorporated: 1923
Employees: 23,603
Sales: $14.28 billion (1999)
Stock Exchanges: New York Chicago Tokyo Frankfurt Swiss
Ticker Symbol: ADM
NAIC: 111419 Other Food Crops Grown Under Cover; 112511 Finfish Farming and Fish Hatcheries; 311119 Other Animal Feed Manufacturing; 311211 Flour Milling; 311212 Rice Milling; 311213 Malt Manufac-turing; 311221 Wet Corn Milling; 311222 Soybean Processing; 311223 Other Oilseed Processing; 311312 Cane Sugar Refining; 311320 Chocolate and Confectionery Manufacturing from Cacao Beans; 311823 Dry Pasta Manufacturing; 311830 Tortilla Manufacturing; 311999 All Other Miscellaneous Food Manufacturing; 312140 Distilleries; 325193 Ethyl Alcohol Manufacturing; 325411 Medicinal and Botanical Manufacturing; 422510 Grain and Field Bean Wholesalers; 493130 Farm Product Warehousing and Storage; 522110 Commercial Banking; 523130 Commodity Contracts Dealing
Name Age Since Current Position
Woertz, Patricia 57 2007 Chairman of the Board, President, Chief Executive Officer
Rice, John 57 2010 Vice Chairman - Office of the Chairman
Young, Ray 48 2010 Chief Financial Officer, Senior Vice President
Taets, Joseph 44 2010 President - Grain
Lutt, Kris 2010 President - Milling
Luciano, Juan 49 2011 Chief Operating Officer, Executive Vice President
Smith, David 55 2003 Executive Vice President, Secretary, General Counsel
Mills, Steven 55 2010 Senior Executive Vice President - Performance and Growth
D'Ambrose, Michael 53 2006 Senior Vice President - Human Resources
Huss, Craig 58 2010 Senior Vice President, President - Agricultural Services
Jansen, Matthew 44 2010 Senior Vice President, President - Global Oilseed
Bemis, Mark 49 2010 Senior Vice President, president - Corn
Luthar, Vikram 43 2010 Vice President - Finance, Treasurer
Stott, John 43 2006 Vice President, Controller
Givers, Conrad 2010 Vice President - Sweetener Sales
Cheviron, Mark 61 1997 Vice President - Corporate Security and Services
Roney, Scott 46 2001 Vice President - Compliance and Ethics
Lusk, Michael 61 1999 Vice President - Insurance and Risk Management
Sanner, Marc 57 2008 Vice President, General Auditor
Roig, Ismael 43 2010 Vice President and Executive Director, Asia-Pacific
Herzfeld, Shannon 58 2005 Vice President - Government Affairs Function
Riddle, Dennis 63 2009 Vice President and President, Corn Sweeteners and Starches
Podesta, Victoria 54 2010 Vice President, Chief Communications Officer
Hess, Kevin 50 2008 Vice President - Oilseeds Processing Production Operations
Kampfe, Randall 63 2008 Vice President - Corn Processing Production Operations
Baroni, Michael 55 2010 Vice President - Economic Policy
Lastra, Domingo 42 2009 Vice President and President, South American Operations
Towne, Gary 55 2009 Vice President; Chairman of the Management Board of ACTI, G.m.b.H.
Kolkhorst, Mark 2010 Vice President, Corporate Officer. President - Milling and Cocoa
Bandler, Ronald 49 1998 Assistant Treasurer
Roberts, Scott 50 1997 Assistant Secretary and Assistant General Counsel
Funderburg, Stuart 46 2008 Assistant Secretary, Assistant General Counsel
Moore, Patrick 56 2007 Lead Director
Carter, Mollie 48 1996 Director
Westbrook, Kelvin 55 2003 Director
O'Neill, Thomas 64 2004 Director
Maciel Neto, Antonio 53 2006 Director
Haynes, Victoria 63 2007 Director
Buckley, George 64 2008 Director
Felsinger, Donald 63 2009 Director
Dufour, Pierre 56 2010 Director
Address:
4666 East Faries Parkway
P.O. Box 1470
Decatur, Illinois 62525
U.S.A.
ADM also provides agricultural storage and transportation services. The American River Transportation Company along with ADM Trucking, Inc are subsidiaries of ADM. ADM's revenues for fiscal year 2010 were US $61.7 billion.
Archer Daniels Midland Company, incorporated in 1923, is principally engaged in procuring, transporting, storing, processing, and merchandising agricultural commodities and products. The Company is a processor of oilseeds, corn, wheat, cocoa, and other agricultural commodities and is a manufacturer of vegetable oil and protein meal, corn sweeteners, flour, biodiesel, ethanol, and other food and feed ingredients. The Company also has a grain elevator and transportation network to procure, store, clean, and transport agricultural commodities, such as oilseeds, corn, wheat, milo, oats, and barley, as well as processed agricultural commodities. The Company’s operations are classified into three business segments: Oilseeds Processing, Corn Processing, and Agricultural Services. In January 2011, the Company acquired Alimenta (USA), Inc., from Alimenta S.A.
Oilseeds Processing
The Oilseeds Processing segment includes activities related to the origination, merchandising, crushing, and further processing of oilseeds, such as soybeans, cottonseed, sunflower seeds, canola, rapeseed, peanuts, flaxseed, and palm into vegetable oils and protein meals. The Oilseeds Processing segment principally produces and markets processed oilseed products as ingredients for the food, feed, energy, and other industrial products industries. Crude vegetable oil is sold as is or is further processed by refining, blending, bleaching, and deodorizing into salad oils. Salad oils are sold as is or are further processed by hydrogenating and/or interesterifying into margarine, shortening, and other food products. Partially refined oil is used to produce biodiesel or is sold to other manufacturers for use in chemicals, paints, and other industrial products. Oilseed protein meals are principally sold to third parties to be used as ingredients in commercial livestock and poultry feeds. The Oilseeds Processing segment also produces natural health and nutrition products and other specialty food and feed ingredients. In North America, cottonseed flour is produced and sold primarily to the pharmaceutical industry and cotton cellulose pulp is manufactured and sold to the chemical, paper, and filter markets. In South America, the Oilseeds Processing segment utilizes a network of grain elevators, port facilities and transportation assets to buy, store, clean, and transport agricultural commodities and operates fertilizer blending facilities.
The Company produces a range of edible soy protein products including soy flour, soy grits, soy protein concentrates and soy isolates that are used in processed meats, baked foods, nutritional products, snacks, and dairy and meat analogs. From co-products of oilseeds, the Company produces natural source vitamin E, tocopherol antioxidants and phytosterols, which are marketed to the dietary supplement and food industry. The Company produces soy isoflavones, a dietary supplement, from a co-product of edible soy processing. Golden Peanut Company LLC, a joint venture between the Company and Alimenta (U.S.A.), Inc., is a supplier of peanuts and peanut derived ingredients to both the domestic and export markets. The Company has a 50% ownership interest in this joint venture. The Company has a 50% interest in Edible Oils Limited, a joint venture between the Company and Princes Foods to procure, package, and sell edible oils in the United Kingdom. The Company recently announced the formation of a new edible oils joint venture with Princes Foods in Poland.
Stratas Foods LLC, a joint venture between the Company and ACH Jupiter, LLC, a subsidiary of Associated British Foods, procures, packages, and sells edible oils in North America. The Company has a 50% ownership interest in this joint venture. The Company has a 16.4% ownership interest in Wilmar International Limited (Wilmar), a Singapore publicly listed company. Wilmar is a processor and merchandiser of palm and lauric oils, and a major oil palm plantation owner. The Company is a supplier of agricultural commodity raw materials to Edible Oils Limited, Stratas Foods LLC, and Wilmar.
Corn Processing
The Company’s Corn Processing segment is engaged in corn wet milling and dry milling activities, primarily in the United States, related to its production of ingredients used in the food and beverage industry including syrup, starch, glucose, dextrose, and sweeteners. Dextrose is also used by the Company as a feedstock for its bioproducts operations. Corn gluten feed and meal, as well as distillers grains, is produced for use as animal feed ingredients. Corn germ, a by-product of the wet milling process, is further processed as an oilseed into vegetable oil and protein meal. The Company’s Corn Processing segment is engaged in corn wet milling and dry milling activities, primarily in the United States, related to its production of ingredients used in the food and beverage industry including syrup, starch, glucose, dextrose, and sweeteners. Dextrose is also used by the Company as a feedstock for its bioproducts operations. Corn gluten feed and meal, as well as distillers grains, is produced for use as animal feed ingredients. Corn germ, a by-product of the wet milling process, is further processed as an oilseed into vegetable oil and protein meal.
Almidones Mexicanos S.A., in which the Company has a 50% interest, operates a wet corn milling plant in Mexico. Eaststarch C.V. (Netherlands), in which the Company has a 50% interest, owns interests in companies that operate wet corn milling plants in Bulgaria, Hungary, Slovakia, and Turkey. The Company has a 50% interest in Telles, LLC (Telles), a joint venture between the Company and Metabolix to market and sell PHA, which is being produced in a facility owned by the Company. Red Star Yeast Company, LLC produces and sells fresh and dry yeast in the United States and Canada. The Company has a 40% ownership interest in this joint venture.
Agricultural Services
The Agricultural Services segment utilizes the Company’s extensive grain elevator and transportation network to buy, store, clean, and transport agricultural commodities, such as oilseeds, corn, wheat, milo, oats, rice, and barley, and resells these commodities primarily as food and feed ingredients and as raw materials for the agricultural processing industry. The Company processes and distributes edible beans in the United States for use as a food ingredient. The Company produces and distributes formula feeds and animal health and nutrition products to the livestock, dairy, poultry, and pet food industries. Alfred C. Toepfer International (Toepfer), in which the Company has an 80% interest, is a global merchandiser of agricultural commodities and processed products. Toepfer has 36 sales offices worldwide and operates inland, river, and export facilities in Argentina, Romania, Ukraine, and the United States. The Company has a 45% interest in Kalama Export Company, a grain export elevator in Washington.
Other
The Company is engaged in milling wheat, corn, and milo into flour in the United States, Canada, the Caribbean, and the United Kingdom. The Company produces bakery products and mixes, wheat starch, and gluten, which are sold to the baking industry. The Company also mills milo to produce industrial flour used in the manufacturing of wallboard for the building industry. Gruma S.A.B. de C.V. (Gruma), in which the Company has a 23.2% interest, is a producer and marketer of corn flour and tortillas with operations in Mexico, the United States, Central America, South America, and Europe. Additionally, the Company has a 20% share, through a joint venture with Gruma, in six United States corn flour mills and one in Italy. The Company also has a 40% share, through a joint venture with Gruma, in nine Mexican wheat flour mills. Hickory Point Bank and Trust Company, fsb, a wholly owned subsidiary of the Company, furnishes public banking and trust services, as well as cash management, transfer agency, and securities safekeeping services, for the Company.
ADM made its first-ever foray into consumer food products with the characteristically low-profile launch of its Harvest Burger brand soy-based meat substitute in the early 1990s. The product's reduced fat, calories, and cholesterol attracted American consumers, many of whom sought out the product even before it had advertising support. In 1993 the Pillsbury Company assumed responsibility for supermarket retailing of Harvest Burgers. For the hungry of the world, the soy product was an inexpensive source of protein with a longer shelf life than traditional sources such as meat and milk. As CEO Andreas pointed out in a 1993 interview with Direct Marketing magazine, 'You can feed 20 times as many people off of an acre of land by raising soy alone, than growing soy and feeding it to an animal and then eating that animal.' Andreas called the development of the meatlike soy product 'the most important food development of this century.'
During the second half of the 1990s, ADM experienced significant growth, with revenues increasing from $12.56 billion to $16.11 billion from fiscal 1995 to fiscal 1998 before falling to $14.28 billion in 1999. Net earnings declined throughout this period, however, falling from the record level of $795.9 million in 1995 to $266 million in 1999. ADM blamed the declining results of the late 1990s largely on two coinciding phenomena: the Asian economic crisis, which later spread to Russia and Latin America, and record crop harvests. The economic downturn significantly dampened demand for protein and vegetable oils in the affected areas, while at the same time prices for farm commodities fell to their lowest levels in more than a decade.
The squeeze on profit margins led to increasing competition and consolidation in the food industry. Archer-Daniels-Midland was heavily involved in this consolidation and spent about $4.6 billion in the second half of the 1990s building new plants, expanding existing ones, and making numerous acquisitions. In mid-1997 ADM paid $470 million for the cocoa business of W.R. Grace & Co., thereby entering the chocolate and cocoa industry. The company quickly added six additional cocoa-processing plants purchased from E D & F Main Group PLC for $223 million. ADM organized these operations as its ADM Cocoa Division, which by the end of the 1990s was grinding 450,000 metric tons of cocoa beans per year, about 20 percent of the world crop. Also in 1997 the company acquired Quincy, Illinois-based soybean processor Moorman Manufacturing Co. for $296 million; purchased a 42 percent stake in United Grain Growers of Canada, a firm involved in grain merchandising and other agricultural activities; acquired a 30 percent stake in Minnesota Corn Processors, operator of wet corn milling plants in Minnesota and Nebraska; and spent $258 million for a 22 percent interest in Mexico-based Gruma S.A. de C.V., the world's largest producer and marketer of corn flour and tortillas. During this period ADM also formed a number of joint ventures, including International Malting Company, 40 percent owned by ADM and 60 percent by the LeSaffre Company, which operated barley malting plants in the United States, Australia, Canada, and France; ADM-Riceland Partnership, a 50-50 venture with Riceland Foods Inc., which processed rice and rice products; and a joint venture with Gruma, 40 percent owned by ADM, that operated seven wheat flour mills in Mexico. The most significant divestments during the later 1990s were those of Supreme Sugar and British Arkady.
Many of these deals occurred after G. Allen Andreas, nephew of Dwayne Andreas, was named CEO in April 1997. Allen Andreas's path to the top was cleared following the downfall of Michael D. Andreas, Dwayne's son and heir-apparent, in a highly publicized price-fixing scheme. The scheme first came to light in 1995 when Mark E. Whitacre, a whistleblower for the FBI, was fired by ADM from his position as head of its BioProducts division for allegedly embezzling millions of dollars from the company. Whitacre had been secretly acting as an informant to the FBI, providing the bureau with documentation, including audio- and videotapes, of alleged price-fixing schemes involving three products derived from corn: lysine, high-fructose corn syrup, and citric acid. At the center of the collusion were two top ADM executives: Vice-Chairman Michael Andreas and Terrance S. Wilson, head of the company's Corn Processing division. In late 1996, following guilty pleas by its partners in price fixing (including Ajinomoto Co. and Kyowa Hakko Kogyo, both of Japan), Archer-Daniels-Midland pleaded guilty to two counts of fixing prices for lysine, a hot-selling livestock feed additive, and for citric acid, and agreed to pay $100 million in fines, by far the largest criminal antitrust settlement in history. By late 1998 the company had paid nearly another $100 million to settle lawsuits brought by customers and investors. Whitacre in 1998 was sentenced to nine years in prison for swindling $9.5 million from ADM; the following year he was sentenced to an additional 20 months for his role in price-fixing at ADM (he had originally been given immunity in the price-fixing case but it was stripped after prosecutors learned of the embezzlement). Wilson retired from ADM in 1996 and Michael Andreas went on an indefinite leave of absence. They both were convicted by a federal jury of price fixing in 1998, and began serving two-year sentences in October 1999. In addition, they were each fined $350,000.
Archer-Daniels-Midland's legal difficulties were far from over. The company faced a number of class-action civil antitrust lawsuits, the largest of which involved purchasers of high-fructose corn syrup--including beverage giants PepsiCo, Inc., and the Coca-Cola Company--which could cost ADM and other defendants hundreds of millions of dollars. ADM was also the subject of government investigations in Europe and Mexico. At the end of the 20th century, Archer-Daniels-Midland faced the challenge of overcoming the huge amounts of negative publicity that had resulted from the various price-fixing probes and suits. It appeared that it would take years before the aura of scandal would be removed from the ADM name.
Principal Subsidiaries:ADM Agri-Industries Ltd. (Canada); ADM Europe BV (Netherlands); ADM Europoort BV (Netherlands); ADM/Growmark River Systems, Inc.; ADM Beteiligungs GmbH (Germany); ADM International Ltd. (U.K.); ADM Investor Services, Inc.; ADM Ireland Holdings Ltd.; ADM Milling Co.; ADM Oelmuhlen GmbH & Co. KG (Germany); ADM Ringaskiddy (Ireland); ADM Transportation Co.; ADMIC Investments NV (Netherlands Antilles); Agrinational Insurance Company; Agrinational Ltd. (Cayman Islands); Alfred C. Toepfer International (Germany; 50%); American River Transportation Co.; Ardanco, Inc. (Guam); Collingwood Grain, Inc.; Compagnie Industrielle Et Financiere (CIP) (Luxembourg; 42%); Consolidated Nutrition, L.C. (50%); Erith Oil Works Ltd. (U.K.); Fleischmann Malting Company, Inc.; Gruma S.A. de C.V. (Mexico; 22%); Hickory Point Bank & Trust Co.; Midland Stars, Inc.; Oelmuhle Hamburg AG (Germany; 95%); Premiere Agri Technologies Inc.; Tabor Grain Co.
Principal Divisions:ADM North American Oilseed Processing Division; ADM South American Oilseed Processing Division; ADM Cocoa Division; ADM BioProducts Division; ADM Animal Health and Nutrition Division; ADM Food Additives Division; ADM Nutraceutical Division; ADM Protein Specialties Division; ADM Transportation Division; ADM Research Division.
Principal Competitors:Ag Processing Inc; Agribrands International, Inc.; Ajinomoto Co., Inc.; The Andersons, Inc.; Bartlett and Company; Cargill, Incorporated; Cenex Harvest States Cooperatives; ConAgra, Inc.; ContiGroup Companies, Inc.; Corn Products International, Inc.; Eridania Beghin-Say; Farmland Industries, Inc.; GROWMARK Inc.; Pioneer Hi-Bred International, Inc.; Riceland Foods, Inc.; The Scoular Company; Southern States Cooperative, Incorporated; Tate & Lyle PLC; Universal Corporation.
OVERALL
Beta: 0.24
Market Cap (Mil.): $23,592.93
Shares Outstanding (Mil.): 637.30
Annual Dividend: 0.64
Yield (%): 1.73
FINANCIALS
ADM Industry Sector
P/E (TTM): 12.23 24.78 20.76
EPS (TTM): 73.53 -- --
ROI: 7.98 3.15 8.13
ROE: 12.68 4.54 14.58
Key Dates:
1878: John W. Daniels begins crushing flaxseed to make linseed oil in Ohio.
1902: Daniels moves to Minneapolis to organize the Daniels Linseed Company.
1903: George A. Archer joins the firm, which is renamed the Archer-Daniels Linseed Company within a few years.
1923: Company purchases the Midland Linseed Products Company, then incorporates as the Archer-Daniels-Midland Company.
1930: Commander-Larabee Company, a major flour miller, is acquired.
1966: Dwayne O. Andreas purchases a block of stock, gaining seats on the company board and the executive committee.
1970: Andreas is named CEO.
1971: Company purchases Corn Sweeteners, Inc., producer of high-fructose syrups, glutens, oil, and caramel color.
1972: Andreas is elected chairman.
1981: The Columbian Peanut Company is acquired.
1986: Company forms grain marketing joint venture with Growmark.
1996: Company pleads guilty to two counts of fixing prices of lysine and citric acid and pays $100 million in criminal fines.
1997: Company acquires W.R. Grace's cocoa business, marking its entry into that sector; G. Allen Andreas is named CEO.
1998: Three former company executives, including Michael D. Andreas, are convicted by a federal jury of price fixing.
1999: Dwayne Andreas retires as chairman; CEO Allen Andreas is named to the additional post of chairman; Michael Andreas begins serving two-year prison sentence.
Statistics:
Public Company
Incorporated: 1923
Employees: 23,603
Sales: $14.28 billion (1999)
Stock Exchanges: New York Chicago Tokyo Frankfurt Swiss
Ticker Symbol: ADM
NAIC: 111419 Other Food Crops Grown Under Cover; 112511 Finfish Farming and Fish Hatcheries; 311119 Other Animal Feed Manufacturing; 311211 Flour Milling; 311212 Rice Milling; 311213 Malt Manufac-turing; 311221 Wet Corn Milling; 311222 Soybean Processing; 311223 Other Oilseed Processing; 311312 Cane Sugar Refining; 311320 Chocolate and Confectionery Manufacturing from Cacao Beans; 311823 Dry Pasta Manufacturing; 311830 Tortilla Manufacturing; 311999 All Other Miscellaneous Food Manufacturing; 312140 Distilleries; 325193 Ethyl Alcohol Manufacturing; 325411 Medicinal and Botanical Manufacturing; 422510 Grain and Field Bean Wholesalers; 493130 Farm Product Warehousing and Storage; 522110 Commercial Banking; 523130 Commodity Contracts Dealing
Name Age Since Current Position
Woertz, Patricia 57 2007 Chairman of the Board, President, Chief Executive Officer
Rice, John 57 2010 Vice Chairman - Office of the Chairman
Young, Ray 48 2010 Chief Financial Officer, Senior Vice President
Taets, Joseph 44 2010 President - Grain
Lutt, Kris 2010 President - Milling
Luciano, Juan 49 2011 Chief Operating Officer, Executive Vice President
Smith, David 55 2003 Executive Vice President, Secretary, General Counsel
Mills, Steven 55 2010 Senior Executive Vice President - Performance and Growth
D'Ambrose, Michael 53 2006 Senior Vice President - Human Resources
Huss, Craig 58 2010 Senior Vice President, President - Agricultural Services
Jansen, Matthew 44 2010 Senior Vice President, President - Global Oilseed
Bemis, Mark 49 2010 Senior Vice President, president - Corn
Luthar, Vikram 43 2010 Vice President - Finance, Treasurer
Stott, John 43 2006 Vice President, Controller
Givers, Conrad 2010 Vice President - Sweetener Sales
Cheviron, Mark 61 1997 Vice President - Corporate Security and Services
Roney, Scott 46 2001 Vice President - Compliance and Ethics
Lusk, Michael 61 1999 Vice President - Insurance and Risk Management
Sanner, Marc 57 2008 Vice President, General Auditor
Roig, Ismael 43 2010 Vice President and Executive Director, Asia-Pacific
Herzfeld, Shannon 58 2005 Vice President - Government Affairs Function
Riddle, Dennis 63 2009 Vice President and President, Corn Sweeteners and Starches
Podesta, Victoria 54 2010 Vice President, Chief Communications Officer
Hess, Kevin 50 2008 Vice President - Oilseeds Processing Production Operations
Kampfe, Randall 63 2008 Vice President - Corn Processing Production Operations
Baroni, Michael 55 2010 Vice President - Economic Policy
Lastra, Domingo 42 2009 Vice President and President, South American Operations
Towne, Gary 55 2009 Vice President; Chairman of the Management Board of ACTI, G.m.b.H.
Kolkhorst, Mark 2010 Vice President, Corporate Officer. President - Milling and Cocoa
Bandler, Ronald 49 1998 Assistant Treasurer
Roberts, Scott 50 1997 Assistant Secretary and Assistant General Counsel
Funderburg, Stuart 46 2008 Assistant Secretary, Assistant General Counsel
Moore, Patrick 56 2007 Lead Director
Carter, Mollie 48 1996 Director
Westbrook, Kelvin 55 2003 Director
O'Neill, Thomas 64 2004 Director
Maciel Neto, Antonio 53 2006 Director
Haynes, Victoria 63 2007 Director
Buckley, George 64 2008 Director
Felsinger, Donald 63 2009 Director
Dufour, Pierre 56 2010 Director
Address:
4666 East Faries Parkway
P.O. Box 1470
Decatur, Illinois 62525
U.S.A.