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Archer Daniels to Build Protein Plant in Brazil

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In its endeavor to meet the rising demand of soy protein across South America, Archer Daniels Midland Company (ADM - Free Report) has decided to build a soy protein production complex in Campo Grande, Mato Grosso do Sul, Brazil.

The project will expectedly require an investment of $250 million and its location will be next to the company’s existing soybean processing facility in Campo Grande. The construction is slated to begin in the third quarter of 2014. Once completed, the plant will have approximately 80 employees.

The new facility will produce a variety of functional protein concentrates or ingredients that can be added to food and beverages. This will provide a wider choice of protein intake to Archer Daniels’ South American consumers. Further, the ingredients manufactured by the plant will be marketed by ADM’s Foods & Wellness group.

ADM’s Foods & Wellness group is engaged in providing multifarious specialty ingredients and products for the food, beverage, wellness and personal care markets. Apart from this, the group sells emulsifiers, acidulants, polyols and hydrocolloids.

In 1997, Archer Daniels began its operations in Brazil by purchasing various crushing plants, grain elevators and silos. Currently, with over 4,700 employees in the country, Archer Daniels is a major agribusiness company in Brazil. It currently operates four soy processing facilities, four fertilizer blending facilities, one cocoa processing unit and one sugar cane processing plant which produces ethanol, along with more than 40 elevators in the country.

Archer Daniels, one of the leading food processing companies in the world, processes oilseeds, corn, wheat, cocoa and other foodstuff. It is also a giant manufacturer of vegetable oil, protein meal, corn sweeteners, flour, biodiesel, ethanol, and other value-added food and feed ingredients. Moreover, the company has a worldwide grain elevator and transportation network for procurement, storage, cleansing and transportation of agricultural commodities.

We expect Archer Daniels’ consistent focus on enhancing its processing capabilities and its increasing global footprint to drive growth going forward. The company intends to invest around $1.4 billion in capital projects in 2014, most of which will be in high-growth markets outside the U.S.

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

Other Stocks to Consider

Investors interested in the food industry could also consider stocks like Diamond Foods, Inc. , J&J Snacks Food Corp. (JJSF - Free Report) and The Hain Celestial Group, Inc. (HAIN - Free Report) . All of these have a Zacks Rank #2 (Buy).

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