Milling & Baking News - September 12, 2006 - 13

B U S I N E S S

Proper balance, expansion seen as
key drivers to ADM growth strategy
BOSTON - A properly positioned asset base, a balanced supply-demand
situation and a focus on expanding
renewable fuels in industrial products
stand out as three key drivers to Archer
Daniels Midland Co.'s growth strategy
going forward, the company said at a
recent conference.
In a presentation Sept. 6 at the Prudential Equity Group Back-to-School Consumer Conference in Boston, William H.
Camp, executive vice-president of ADM,
spoke about how the company intends
to follow that strategy through its four
key operating groups.
In corn, ADM plans to expand its use
of corn starch and grow its ethanol business, Mr. Camp said, citing the construction of two new ethanol plants - one in
Cedar Rapids, Iowa, and one in Columbus, Neb. - as examples of that effort.
"We're also working to increase the capacity utilization of our existing facilities,
and we work very hard and continue to
invest in opportunities in progeneration
to make sure that we have the low cost
energy advantage," he said.
Mr. Camp said ADM is able to add val-

ue by breaking corn into three basic commodities: corn gluten feed and meal, corn
oil and starch. Currently, the company
has created 25 unique products
from starch, each with its own
supply-demand dynamics.
In addition to creating
new products from corn, Mr.
Camp was equally optimistic
about the prospects of the market for ethanol.
"We believe the ethanol
industry will continue to
expand and the good news
is we think there's room for this expanded supply," he said. "Ethanol is a very
attractive business today, and we are the
largest, most experienced ethanol producer and marketer for the U.S. We've
been at this business for almost 28 years.
Our goal is to be a low-cost producer
across the entire supply chain."
He indicated that ADM plans to leverage its competitive advantage in ethanol
by building new ethanol dry mills next
to existing old wet mills.
"The advantage we get there is the
less capital requirement to build these

Kraft Foods completes acquisition
of United Biscuits units
NORTHFIELD, ILL. - A little more
than a week after the European Commission cleared the purchase, Kraft
Foods Inc. announced it has completed its $1.07 billion acquisition of
United Biscuits' (U.B.) Iberian operations, as well as reclaimed the rights
to all Nabisco trademarks - including Oreo, Ritz and Chips Ahoy! - in
Europe, the Middle East and Africa.
"Bringing our Nabisco trademarks

back into our product portfolio, coupled with the addition of strong local
Iberian biscuit brands, is another step
in increasing shareholder value as we
further improve our growth potential
in this key region," said Joachim Krawczyck, group vice-president and president, Kraft E.U. region. "This transaction gives us an enhanced platform for
innovation and extends Kraft's competitive position in the E.U." MBN

Tim Hortons board authorizes
share buyback program
OAKVILLE, ONT. - The board of directors of Tim Hortons, Inc. has approved
a share repurchase program authorizing
the repurchase of up to C$200 million
($181 million), not to exceed 5% of its current outstanding shares of common stock.
Tim Hortons may make such repurchases
on either of the New York Stock Exchange
or the Toronto Stock Exchange.
The buyback program is expected to begin after parent Wendy's International spins
off its remaining 83% stake in Tim Hortons.
14 / Milling & Baking News, September 12, 2006

A day before the buyback was announced, Wendy's said it would distribute 160 million shares of Tim Hortons to stockholders through a special
dividend on Sept. 29.
The program is expected to be in place
for 12 months following the distribution
of the Tim Hortons shares by Wendy's,
unless either the C$200 million maximum or the 5% of outstanding shares
limit is reached prior to the expiration of
such 12-month period. MBN

facilities and that really comes from the
fact that we would rather utilize the existing corn storage for the progeneration
in order to take advantage of this type of
opportunity," he said.
The second segment Mr. Camp discussed was oilseeds, where ADM
primarily operates in four regional
markets. In North America and
Europe, ADM plans to maximize its asset utilization,
which in some cases has required expanding several large
efficient facilities and closing
smaller poorly located facilities, Mr. Camp said.
ADM also has been working to develop and expand
its regional biodiesel markets.
"The demand for biodiesel is very
exciting for us because it really creates
significant leverage in the entire oilseed
complex," Mr. Camp said. "If you look
at the history of vegetable oil production and consumption over the last five
or six years, typically production has
increased on average 4% or 5% each
year, and consumption has increased
at about the same rate. But with the
growth in new demand for biodiesel
we think the consumption rate, the annual growth could double over the next
five years. So the biodiesel production
will certainly tighten the vegetable oil
supply situation."
A third section of discussion was the
company's Ag Service Group.
"This group connects the world's
farms to our manufacturing export facilities all over the country," Mr. Camp
said. "Our Ag Services Group is really
made up of the grain origination storage
facilities, transportation assets, and our
distribution facilities that serves both the
domestic and international markets.
"The extensive network again includes
over 500 storage and distribution facilities, over 2,000 barges in North America,
a barge company in South America, over
1,500 trucks and trailers, and over 20,000
rail cars. What this asset base really creates for us is a very powerful logistics
network that ties our system together
with our manufacturing facilities and
our many customers."
The final segment discussed was the
"other" segment, which includes ADM's
cocoa business, wheat flour milling business and food ingredients.
Speaking only briefly about this segment, Mr. Camp said ADM will continue to look for opportunities to expand
its grind and industrial chocolate businesses around the world. Commenting
on milling, he said the company's focus has been on efficiencies in a changing marketplace. MBN
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Milling & Baking News - September 12, 2006

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