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Recently, food processing giant Archer Daniels Midland Company (ADM - Analyst Report) declared the relocation of its global headquarters from Decatur, IL. However, Decatur will remain the company’s North American headquarters.

Archer Daniels is at present negotiating with several public officials and advisers for a new location. Though the company has not revealed any details, the city officials of Chicago have revealed that the city has been shortlisted as a possible location.

Archer Daniels is constantly seeking to expand its footprint and enhance customer services. Due to these, the company needs a more prominent location that will allow it to work more competently with customers and employees across the globe. Notably, Archer Daniels is a major agricultural processor that competes with Bunge Ltd (BG - Snapshot Report), Limoneira Co. (LMNR - Snapshot Report) and The Andersons, Inc. (ANDE - Analyst Report).

Further, the lack of several modern facilities including a big airport has forced Archer Daniels to move out of its longtime headquarter in Decatur. Moreover, Decatur is a comparatively smaller city with a limited skilled workforce.

With the relocation, the company will transfer 100 high profile jobs and simultaneously build an information technology center at its new headquarter that will generate an additional employment for 100 people. The workforce of 4400 at Decatur will continue; the company has not planned any layoffs.  

We believe that Archer Daniels decision to relocate is a strategic fit in its expansion plan. Moving the global headquarters to a bigger city with modern facilities with help the company to regulate its operations more effectively and consequently, bolster the performance.

Currently, Archer Daniels carries a Zacks Rank #3 (Hold).

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