Milling & Baking News - January 13, 2004 - 1

Theinewsweeklyiofigrain-basedifoods

Year-end
REVIEW

As overall market surges,
grain-based foods shares fall

NEW YORK - The Grain-Based Foods
Share Index in 2003 lost ground, moving in
the opposite direction from the surging
broader market.
At 9327.64, the Grain-Based Foods
Share Index was down 4.9% in 2003 and
failed to close above the 10000 point
mark, a level first reached in 2002. The
decline ended a streak of three years of
advances for the index, just as the broad
index gains ended a three-year string of
declines for the overall market.
The drop of 487 points in the GrainBased Foods Share Index, which is based
on companies with significant operations

JANUARY 13, 2004

bakingbusiness.com / world-grain.com

in grain-based foods, rolled back modest
gains of the previous two years of 256 in

2002 and 336 in 2001. The index surged 2444
in 2000.
The 5% decline in the Grain-Based
Foods Share Index contrasted with a 25%
gain for the Dow Jones average of industrial shares, a 50% jump in the Nasdaq
composite index and a 26% rise in the
S.&P. 500 index.
Grain-based foods shares also underperformed all S.&P. 500 economic sectors, including consumer staples, which
were up 9% in 2003. In contrast to the
6% decline in grain-based shares, each
sector of the S.&P. 500 posted a gain in
2003: information technology, up 47%;
consumer discretionary, up 36%; materials, up 35%; industrials, up 30%; financials, up 28%; energy, up 22%; utilities,
Continued on Page 25

Costley details plan
Sugar users celebrate trade deal
prompted by Deloitte
amid outcry from domestic growers
Consulting assessment WASHINGTON - U.S. sugar producers
It's unclear just how much
MINNEAPOLIS - Following a major
review by Deloitte Consulting, International Multifoods Corp. will undergo a
significant restructuring, according to
Gary E. Costley, chairman and chief executive officer.
Mr. Costley fleshed out plans for the restructuring in the Multifoods third-quarter
conference call Jan. 6.
Following Deloitte's analysis, Mr.
Costley said Multifoods has decided to
"simplify our business and reduce operating costs in response to the realities of our
business and the marketplace in which we
compete."
Multifoods is staffed for a growth strategy that the company will not be able to
execute in the near term, he said. "We also
know we operate in a highly competitive
industry where market share gains bring
swift responses from our competitors,"
he said. "Consequently, we need to free
Continued on Page 14

warn that provisions in a recent trade
agreement eventually could double sugar
imports from Central America, devastating their industry in the process.
U.S. sugar users have a far different take
on the matter.

LATE

NEWS
N O RT H F I E L D ,
ILL.
-
Kraft
Foods Inc. last
week unveiled a
new global organizational structure
designed to more
strongly position the company to deliver sustainable
growth. The move comes
less than a month after Kraft
Continued on Page 8

Holden
to new
Kraft post

inside

domestic
sugar prices would decline if Congress
this summer approves the Central American Free Trade Agreement (CAFTA).
But the tentative deal struck last month
between U.S. trade negotiators and four
Central American countries would pave
the way for more sugar to flow into the
country.
As a result, Jeff Nedelman, strategic
communications manager with the Coalition for Sugar Reform (C.S.R.), said CAFTA
definitely is a step in the right direction for
U.S. food manufacturers, especially bakers, confectionery makers and other commercial sugar users.
Those companies for years have paid
at least twice as much for the sugar they
use as their foreign competitors pay on the
global market. Mr. Nedelman said many
simply no longer can manage that cost
differential, which the General Accounting
Office has estimated at an extra $1.9 billion
Continued on Page 21

THIS WEEK

15 months
in jail
for donut
labeling fraud

Ingredient

CHS upbeat
about fiscal
2004
prospects

Kellogg
fitness
initiative in
Canada

Week
31

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - January 13, 2004

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