Archer Daniels Midland Co. said on March 19 that it intends to restructure its operating divisions as the U.S. food processing corporation strives to compete in the global grain industry amid diminishing profit margins, the Financial Times reported.
ADM reportedly said that it would create four new business units, a move that marks the second time that ADM has revamped its operations in three years under pressure to reduce costs and streamline operations.
The new divisions — carbohydrates solutions, nutrition, oil seeds and origination — will replace the four existing divisions of agricultural services, corn processing, oilseeds processing and wild flavours and speciality ingredients, or WFSI.
The changes will offer investors more transparency, according to Juan Luciano, ADM's chief executive.
The grains trading and processing industry is struggling after a series of large harvests which prompted farmers to withhold crops in hopes of better prices and food consumer groups to demand lower prices, according to the report.
Bunge Ltd., an ADM rival, cut costs and capital spending by $450 million in search of higher profit margins. Another competitor, Cargill, overhauled its leadership structure in 2015, the FT noted.
As part of the new structure, the origination division, led by Stefano Rettore, ADM's chief risk officer, will handle grains trading operations. The nutrition unit will allow ADM to expand into the pet treat market as it combines WFSI and ADM's enzymes, bioactives and animal nutrition businesses, led by Vince Macciocchi.
The oilseeds processing division will reportedly handle soybean origination from Brazil under the leadership of Greg Morris. The wheat milling business will be housed in the carbohydrate solutions division and will be led by Chris Cuddy, head of corn processing, the report said.