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Archer Daniels Boosts Capacity of Corn Units to Drive Growth
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In a bid to further strengthen its global corn presence, Archer Daniels Midland Company (ADM - Free Report) has decided to substantially increase the production capacity as well as expand the finishing capabilities of its corn wet mills at Adana, Turkey; and Razgrad, Bulgaria.
The expansion of these facilities is anticipated to be complete by the first half of 2018. These will help the company to capture the increasing customer demand for starch-based ingredients in the Europe and the Middle East regions. Further, this expansion will enhance Archer Daniels’ sweeteners and starches offerings at a time when sugar production quotas in the EU are set to expire. Moreover, it will aid the company in making the most of the rising demand from food and paper markets in Turkey and the Middle East.
Archer Daniels’ commitment to enhancing shareholder value through the growth and diversification of global corn business is evident from the series of corn wet mills acquisitions in Turkey, Bulgaria, Hungary and Morocco in the past two years.
Producing sweeteners and starches, the Turkey and Bulgaria units were fully acquired in Nov 2015. Along with these assets, Archer Daniels acquired 50% stake in another corn wet mill in Szabadegyháza, Hungary. These facilities together produce a variety of starch products like liquid sweeteners, native and modified starches, crystalline fructose and dextrose. Additionally, the company acquired a Casablanca, Morocco-based corn wet mill in Jun 2016.
Archer Daniels expects the aforementioned expansions in Turkey and Bulgaria to not only enhance production capacity but also boost operational efficacy at these units. Apart from this, it expects this move to help bolster its ability to compete in the domestic and international markets.
Further, Archer Daniels’ focus on strategically managing its business portfolio is evident from its recent announcement of selling its 19.9% stake in the Australian grain handler, GrainCorp Limited for A$387 million ($286.92 million), or A$8.53 per share. As part of the deal, the company will execute an underwritten sale of its stake in GrainCorp to an underwriter.
The company believes the sale of GrainCorp will further cut down its invested capital, which will provide increased cash to reinvest in other higher-return projects. Furthermore, this highlights the company’s focus on its balance-capital allocation strategy as it anticipates generating solid long-term returns by redirecting this capital.
Shares of Archer Daniels have gained nearly 28.2% on a year-to-date basis, substantially outperforming the Zacks categorized Consumer Staples sector that has recorded a growth of 1.3% in the same period.
Zacks Rank
Archer Daniels currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader consumer staples sector include Dean Foods Co. , Ollie's Bargain Outlet Holdings Inc. (OLLI - Free Report) , both sporting a Zacks Rank #1 (Strong Buy) and Sysco Corporation (SYY - Free Report) which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dean Foods, with a long-term earnings growth rate of 12%, has surged nearly 21.6% year to date.
Ollie's Bargain has gained a whopping 74.9% year to date. Moreover, it has a long-term earnings growth rate of 20.2%.
Sysco has jumped nearly 4% year to date. The stock has a long-term earnings growth rate of 8.8%.
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Archer Daniels Boosts Capacity of Corn Units to Drive Growth
In a bid to further strengthen its global corn presence, Archer Daniels Midland Company (ADM - Free Report) has decided to substantially increase the production capacity as well as expand the finishing capabilities of its corn wet mills at Adana, Turkey; and Razgrad, Bulgaria.
The expansion of these facilities is anticipated to be complete by the first half of 2018. These will help the company to capture the increasing customer demand for starch-based ingredients in the Europe and the Middle East regions. Further, this expansion will enhance Archer Daniels’ sweeteners and starches offerings at a time when sugar production quotas in the EU are set to expire. Moreover, it will aid the company in making the most of the rising demand from food and paper markets in Turkey and the Middle East.
Archer Daniels’ commitment to enhancing shareholder value through the growth and diversification of global corn business is evident from the series of corn wet mills acquisitions in Turkey, Bulgaria, Hungary and Morocco in the past two years.
Producing sweeteners and starches, the Turkey and Bulgaria units were fully acquired in Nov 2015. Along with these assets, Archer Daniels acquired 50% stake in another corn wet mill in Szabadegyháza, Hungary. These facilities together produce a variety of starch products like liquid sweeteners, native and modified starches, crystalline fructose and dextrose. Additionally, the company acquired a Casablanca, Morocco-based corn wet mill in Jun 2016.
Archer Daniels expects the aforementioned expansions in Turkey and Bulgaria to not only enhance production capacity but also boost operational efficacy at these units. Apart from this, it expects this move to help bolster its ability to compete in the domestic and international markets.
Further, Archer Daniels’ focus on strategically managing its business portfolio is evident from its recent announcement of selling its 19.9% stake in the Australian grain handler, GrainCorp Limited for A$387 million ($286.92 million), or A$8.53 per share. As part of the deal, the company will execute an underwritten sale of its stake in GrainCorp to an underwriter.
The company believes the sale of GrainCorp will further cut down its invested capital, which will provide increased cash to reinvest in other higher-return projects. Furthermore, this highlights the company’s focus on its balance-capital allocation strategy as it anticipates generating solid long-term returns by redirecting this capital.
Shares of Archer Daniels have gained nearly 28.2% on a year-to-date basis, substantially outperforming the Zacks categorized Consumer Staples sector that has recorded a growth of 1.3% in the same period.
Zacks Rank
Archer Daniels currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader consumer staples sector include Dean Foods Co. , Ollie's Bargain Outlet Holdings Inc. (OLLI - Free Report) , both sporting a Zacks Rank #1 (Strong Buy) and Sysco Corporation (SYY - Free Report) which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dean Foods, with a long-term earnings growth rate of 12%, has surged nearly 21.6% year to date.
Ollie's Bargain has gained a whopping 74.9% year to date. Moreover, it has a long-term earnings growth rate of 20.2%.
Sysco has jumped nearly 4% year to date. The stock has a long-term earnings growth rate of 8.8%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>