Milling & Baking News - June 1, 2010 - 14

Business 

Expansion, innovation headline current
and long-term strategies at ag giants
NEW YORK - Several of the nation's
largest agribusiness companies discussed global growth strategies and
long-term challenges at the annual
Agricultural, Protein and Fertilizer
Conference sponsored by BMO Capital Markets Corp. The conference was
held May 19-20 at The Grand Hyatt
New York, Park Avenue at Grand Central in New York City.
As the global production of grains
and oilseeds increases, Decatur, Ill.based Archer Daniels Midland Co. is
making progress on efforts to expand
and improve its origination and transportation network, said Steve Mills,
executive vice-president and chief financial officer.
To that end, Mr. Mills said ADM
selectively has been adding elevators and improving throughput capabilities in North and South America,
growing its origination footprint in
Canada and Europe, and expanding
its destination business in the Middle
East, Asia and Africa.
"We've acquired seven ocean-going
vessels, and we've been modernizing
our North American barge fleet," Mr.
Mills said. "In South America, we're
expanding the barge fleet and we've
added tugboats. We've also grown
our origination footprint by adding
silos in Brazil, Paraguay and Uruguay
and in Argentina, where we already
are the largest exporters of grains
and oilseeds. We're expanding our
port operations to increase our presence in that very important soybean
production region."
ADM also is making headway in
its efforts to diversify its product
portfolio and optimize flexibility
within its corn processing operations. Mr. Mills said the company is
expanding the number of products
in its industrial chemicals and advanced biofuels portfolio, as well as
expanding its global carbohydrate
processing capabilities.
Two of the company's recent ethanol expansions - in Columbus, Neb.,
and Cedar Rapids, Iowa - are expected to provide a boost to ADM's longterm strategy. The Columbus ethanol
dry mill is fully operational while the
Cedar Rapids facility will be on-line
this summer.
"Each of these plants is built
to produce 300 million gallons of
ethanol, although our permits allow us to expand capacity up to 400
14 / June 1, 2010 Milling & Baking News

million gallons," Mr. Mills said.
"These plants are located next to
existing wet corn mills to leverage
our infrastructure and our extensive
logistics network."
Mr. Mills also used the forum as an
opportunity to address the 32 billionlb corn sweetener market, of
which ADM is
a major player.
He indicated the
recent shift of
consumers away
from high-fructose corn syrup
to sugar "may be
relatively short-lived."
"It's important to understand that
nutritionally, high-fructose corn syrup
is the same as sugar, honey and many
other sweeteners," he explained. "Remember that the human digestive system converts sucrose, or table sugar,
into fructose and glucose molecules
and fructose and glucose are naturally
occurring sweeteners, present in varying proportions in the fruits and fruit
juices that we enjoy."
Bunge building its presence
Enhancing its position in the oilseed value chain, building a presence
in grains, and increasing its sugar and
bioenergy platforms are center stage
at Bunge Ltd., said Jackie Fouse, chief
financial officer.
Ms. Fouse provided an update on
the construction of an export grain terminal in Washington state. The terminal elevator, the first for Bunge in the

region, is expected to be a "nice addition" to the company's North American asset base, she said.
"It's there to serve flows from
the Pacific Northwest in the U.S. to
Asia," Ms. Fouse said. "So, capitalizing on that expected demand for
product in Asia and the development, continued development of
those trade flows from North America to Asia. So this is an asset that
we're very excited about."
Ms. Fouse said Bunge also continues to enhance its international reach
through the construction of a soy crush
facility at the port of Phu My, Vietnam.

"It will be a state-of-the-art facility,"
she said. "Again, as Vietnam has developed as a country and the market
demand there for both meal and oil, it
now makes sense for us to have that
crushing facility there in that country."
Another area of Bunge's business
attracting attention is sugar and bioenergy operations. With the closing
of the Moema acquisition in midFebruary, Bunge now has eight mills
in Brazil, and the company is counting on Brazil to be the anchor country for the segment.
"Brazil is uniquely positioned as
the low-cost global producer for raw
sugar and supplies about 50% of the
global sugar trade," Ms. Fouse said.
"So we like Brazil as the anchor country within our sugar platform. In addition to raw sugar, when we look
at the data for sugar-based ethanol,
what you see here is just the domestic
demand in Brazil for ethanol. It has
been growing at a very rapid pace ...
expected to grow at an 8% average
annual rate from 2009 to 2015."
Ms. Fouse said part of the reason for
the rapid growth of ethanol demand
in Brazil is the growth in the flex fuel
car fleet in the country.
"Something on the order of 90%
of sales of vehicles now are flex
fuel vehicles and ... as the gasoline
powered vehicle numbers are coming down, the flex fuel numbers are
going up in Brazil," she said. "And
that is driving very strong domestic
demand for ethanol."
Corn Products makes 'bucket' list
As Corn Products International,
Inc. forges ahead on its strategy to
deliver double-digit earnings-pershare growth it will do so with a focus on the three "buckets" - organic
growth, broadening the ingredient
portfolio, and geographic acquisitions, said Cheryl Beebe, vice-president and chief financial officer of the
Westchester, Ill.-based company.
Ms. Beebe said Corn Products will
focus its investments during the next
five years on global priority market
segments, including brewing and
specialty beverages, confectionery, processed foods, dairy and ice
cream, and the pharma and personal
care industries.
"What we see in those markets is
they tend to have good growth -
they can be 3%, 4%, 5%," Ms. Beebe
said. She noted that Corn Products is
looking closely at modified starches,
texturants and specialty polyols, as
opposed to focusing solely on basic
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Milling & Baking News - June 1, 2010

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