ADM set to combine its oilseeds and origination businesses
ADM has announced that it will combine its origination and oilseeds business units, the second major reconsolidation undertaken by the company in just over a year.
The new business unit will be called Ag Services & Oilseeds and will begin operating on 1 July 2019. The division will be led by Greg Morris, formerly president of ADM’s oilseeds unit.
Major grain companies such as ADM and Cargill have made several organisational changes over the last year as they aim to address factors such as low crop prices and the prolonged US-China trade dispute, which has stifled global material flows.
ADM was also gravely affected by severe weather in the US at the start of the year, as major spring floods led to a 40% dip in net earnings in its first-quarter results,while the company’s operating profit dropped by approximately $50 million in the quarter.
ADM says that the move will create a simpler organisational structure, which will help to accelerate growth.
Chairman and CEO Juan Luciano said: “ADM’s ability to provide value through the entire supply chain – from origination to processing to transportation to ingredients and solutions – is what sets us apart from others in the industry.
“Bringing the unparalleled strength of our global origination, global trade and destination marketing businesses and our transportation network together with our leadership in oilseeds processing and value-added product mix is a natural evolution.
“This helps us better integrate the supply and value chains to deliver significant simplification and efficiency to the day-to-day business. “I am personally committed to the strategic value that simplification can bring to our organization, and feel our ability to accelerate purposeful value creation within ADM has never been greater.”