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Archer Daniels (ADM) Expands Footprint in Western Europe
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Archer Daniels Midland Company (ADM - Free Report) is once again testifying its commitment to enhancing shareholder value through growth and diversification of global sweetener and starch business. After expanding sweetener and starch capabilities in Eastern Europe, the company is now focused on expanding presence in the West with the acquisition of Chamtor, a unit of Vivescia Industries.
Based in Remis, France, Chamtor employs nearly 210 people. It produces glucose, starch and proteins from wheat and is ideally located in the heart of the European Wheat belt.
With this acquisition, Archer Daniels will gain significant exposure in the Western Europe, which makes for 70% of the European starch and derivatives market. Further, this buyout will help the company conveniently serve customers in Western Europe, specifically in France, Germany, Belgium and the Netherlands. Archer Daniels expects to complete the acquisition by summer this year, after receiving approval from relevant employee representative bodies and other regulatory approvals.
Reinforcing its sweetener and starch footprint, Archer Daniels fully acquired the corn wet mills in Adana, Turkey; and Razgrad, Bulgaria in Nov 2015. Along with these assets, the company 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 and revealed plans to expand its Turkey and Bulgaria units in Dec 2016.
While these acquisitions and expansions pertain to Eastern Europe, the aforementioned acquisition of Chamtor will mark its expansion in Western Europe, a key region for growth in Europe. Further, this will remove the regional barrier and enable Archer Daniels to efficiently cater to the need of its sweetener and starch customers across Europe.
Overall, we believe Archer Daniels’ constant focus on cost-savings and enhancing processing capabilities and global footprint through strategic acquisitions bode well. The company’s recent portfolio management initiatives include building a new feed-premix facility in Xiangtan in the Hunan Province as well as the expansion of Nanjing complex in the Jiangsu Province; acquisition of Crosswind industries and Caterina Foods; as well as the sale of Crop Risk Services (“CRS”) insurance operations and GrainCorp Limited. These acquisitions and divestitures are expected to solidify the company’s portfolio, improve knowledge, help focus on consumers and drive returns.
Archer Daniels has outperformed the broader sector in the past one year mainly driven by focus and progress on its strategic initiatives. The company has grown 23% in the last one year, ahead of the Zacks categorized Consumer Staples sector’s increase of 3.7%.
Adecoagro, with a long-term earnings growth rate of 1%, has surged nearly 11.9% year to date.
Limoneira has gained 30.5% in the past one year. Moreover, it has a long-term earnings growth rate of 15%.
Pinnacle Foods has jumped nearly 7.8% year to date. The stock has a long-term earnings growth rate of 8.3%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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Archer Daniels (ADM) Expands Footprint in Western Europe
Archer Daniels Midland Company (ADM - Free Report) is once again testifying its commitment to enhancing shareholder value through growth and diversification of global sweetener and starch business. After expanding sweetener and starch capabilities in Eastern Europe, the company is now focused on expanding presence in the West with the acquisition of Chamtor, a unit of Vivescia Industries.
Based in Remis, France, Chamtor employs nearly 210 people. It produces glucose, starch and proteins from wheat and is ideally located in the heart of the European Wheat belt.
With this acquisition, Archer Daniels will gain significant exposure in the Western Europe, which makes for 70% of the European starch and derivatives market. Further, this buyout will help the company conveniently serve customers in Western Europe, specifically in France, Germany, Belgium and the Netherlands. Archer Daniels expects to complete the acquisition by summer this year, after receiving approval from relevant employee representative bodies and other regulatory approvals.
Reinforcing its sweetener and starch footprint, Archer Daniels fully acquired the corn wet mills in Adana, Turkey; and Razgrad, Bulgaria in Nov 2015. Along with these assets, the company 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 and revealed plans to expand its Turkey and Bulgaria units in Dec 2016.
While these acquisitions and expansions pertain to Eastern Europe, the aforementioned acquisition of Chamtor will mark its expansion in Western Europe, a key region for growth in Europe. Further, this will remove the regional barrier and enable Archer Daniels to efficiently cater to the need of its sweetener and starch customers across Europe.
Overall, we believe Archer Daniels’ constant focus on cost-savings and enhancing processing capabilities and global footprint through strategic acquisitions bode well. The company’s recent portfolio management initiatives include building a new feed-premix facility in Xiangtan in the Hunan Province as well as the expansion of Nanjing complex in the Jiangsu Province; acquisition of Crosswind industries and Caterina Foods; as well as the sale of Crop Risk Services (“CRS”) insurance operations and GrainCorp Limited. These acquisitions and divestitures are expected to solidify the company’s portfolio, improve knowledge, help focus on consumers and drive returns.
Archer Daniels has outperformed the broader sector in the past one year mainly driven by focus and progress on its strategic initiatives. The company has grown 23% in the last one year, ahead of the Zacks categorized Consumer Staples sector’s increase of 3.7%.
Zacks Rank
Archer Daniels currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the consumer staples sector include Adecoagro S.A. (AGRO - Free Report) , Limoneira Co. (LMNR - Free Report) and Pinnacle Foods Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Adecoagro, with a long-term earnings growth rate of 1%, has surged nearly 11.9% year to date.
Limoneira has gained 30.5% in the past one year. Moreover, it has a long-term earnings growth rate of 15%.
Pinnacle Foods has jumped nearly 7.8% year to date. The stock has a long-term earnings growth rate of 8.3%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>