ADM restructures business divisions amid falling grain margins, forms Nutrition unit
20 Mar 2018 --- Archer Daniels Midland Company (ADM) has announced the realignment of its business segments across four units – Carbohydrate Solutions, Nutrition, Oilseeds and Origination. The new segments better reflect ADM’s operating structure as the company seeks ways to remain competitive in the face of persistent tight margins in the global grains sector.
“The changes we are announcing today enhance and accelerate our efforts to deliver value-added, differentiated products and services and drive growth across our entire portfolio,” says ADM Chairman and CEO Juan Luciano. “We have made tremendous progress over the last several years in creating a more agile and efficient company, and these changes position us to build on that momentum as we work to further enhance the customer experience and provide even greater value to customers and shareholders.”
According to Reuters, ADM's rivals have also been shaking up operations in a bid to bolster financial results. In November, Bunge said it was reducing the number of its operating units to three from five and Cargill overhauled its management team in 2015.
ADM also announced leadership changes to further accelerate its existing Readiness initiative to reduce costs, improve efficiency and standardize its business processes and systems to drive improved analytics and decision-making across the organization.
ADM has broadened its international operations in the face of the global grain surplus, buying a stake in corn mills in Russia and also entering a soybean joint venture with Cargill.
ADM’s pre-restructure units are agricultural services, corn processing, oilseeds processing, and Wild Flavors and specialty ingredients. For ADM, some of these changes also date back to 2015, when it created a new business unit, Wild Flavors and Specialty Ingredients after it bought Wild for about US$3 billion.
After the restructuring, most of its agricultural services operations, which include grain trading, will be housed in an origination unit that will be led by Stefano Rettore. Rettore left rival CHS Inc. last year to become ADM’s Chief Risk Officer.
ADM’s wheat milling business, which has been in the agricultural services unit, and its corn processing division will become part of a new carbohydrates solutions segment. Chris Cuddy, who was president of corn processing, will lead the unit.
Wild Flavors will be housed in a new nutrition unit, which will be led by Vince Macciocchi, who was formerly president of the Wild division. The oilseeds segment will remain unchanged.
Joe Taets will assume the newly created role of Senior Vice President and President, Global Business Readiness.
In addition, Kristy Folkwein has been appointed Senior Vice President and Chief Information Officer, where she will focus on ensuring the quality and integrity of ADM’s data companywide, continuing to drive process improvements working closely with Joe Taets; providing leadership to the global shared services organization; and enabling analytics that drives sound, well-informed business decisions.
The company has said its new business segments will be reflected in its financial results beginning with the first quarter of 2018, which are due on May 1, 2018.
FoodIngredientsFirst has reached out to ADM for further comments.
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