CHICAGO, ILLINOIS, US — Confidence is key at Archer Daniels Midland Co.
In a Sept. 8 virtual presentation at the Barclays Global Consumer Staples Conference, Juan R. Luciano, president and chief executive officer of ADM, said the company’s confidence stems from its ability to change its portfolio while increasing the number of things under its control.
“We’ve been working heavily on the portfolio to make ADM much more resilient and drive higher value for shareholders,” Luciano said. “So we divested certain businesses in the past, whether it was cocoa and chocolate or fertilizer businesses, palm, sugar businesses that we didn’t see ourselves getting the proper returns in the future. And you know we are in the process of trying to divest our dry mills that was a little bit interrupted by the turmoil in the financial markets due to COVID.”
In late August, ADM announced that it has completed its previously announced secondary block trade of approximately $550 million in Wilmar ordinary shares.
Wilmar — one of Asia’s leading agribusiness and packaged food oils companies — is a strategic partner and one of ADM’s largest customers.
ADM first partnered with Wilmar and its affiliated companies in the early 1990s when they jointly built a network of soybean processing operations in China, and ADM has been a significant investor in Wilmar since 1994. Today, Wilmar is a key component of ADM’s strategy in emerging markets, including Asia Pacific, an important trade partner, and co-owner of joint venture Olenex, a major European provider of specialty oils.
ADM said it expects to use the net proceeds from the transaction for general corporate purposes, which may include, without limitation: meeting its working capital requirements; funding its capital expenditures and possible acquisitions of, or investments in, business and assets; and acquiring outstanding shares of ADM common stock as part of its publicly announced stock repurchase program.
ADM said it will retain at least a 20% equity investment in Wilmar.
Luciano said ADM also is dedicating resources to innovation, particularly within its ADM Nutrition business, which the company has built into a $500 million operating profit division in just a few years.
“I would say that’s probably the piece that maybe they are not used to or that familiar with ADM,” Luciano said. “There is an innovation piece that is coming, and the traditional piece should be more stable than it used to be.”
He added, “I would say I've never been more excited about the prospects ahead of us on the things that we can control and on the innovation that we can bring to the table.”