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Archer-Daniels-Midland Company
ADM
Company type Public
Industry
Founded1902; 122 years ago (1902) in Minneapolis, Minnesota, U.S.
Founders
Headquarters 77 West Wacker Drive
Chicago, Illinois, U.S.
Key people
Juan Luciano
( Chairman and CEO)
Products
ServicesFlour milling
RevenueDecrease US$93.9 billion (2023)
Decrease US$3.48 billion (2023)
Total assetsDecrease US$54.6 billion (2023)
Total equityDecrease US$24.1 billion (2023)
Number of employees
41,802 (2023)
Subsidiaries American River Transportation Company
Website adm.com
Footnotes / references
[1]
Logo variant used in the corporate website
Former corporate logo

The Archer-Daniels-Midland Company, commonly known as ADM, is an American multinational food processing and commodities trading corporation founded in 1902 and headquartered in Chicago, Illinois. The company operates more than 270 plants and 420 crop procurement facilities worldwide, where cereal grains and oilseeds are processed into products used in food, beverage, nutraceutical, industrial, and animal feed markets worldwide.

ADM ranked No. 35 in the 2023 Fortune 500 list of the largest United States corporations. [2]

The company also provides agricultural storage and transportation services. The American River Transportation Company along with ADM Trucking, Inc., are subsidiaries of ADM.

ADM has been the subject of significant media attention and infamy over the years with its various scandals, one inspiring a novel and subsequent film The Informant!.

History

Early history

In 1902, John W. Daniels started a linseed crushing business in Minneapolis, Minnesota. [3] [4] [5] George A. Archer joined the operation the next year, and in 1905 the firm's name officially became the Archer-Daniels Linseed Company. [3] [6] In 1923, Archer-Daniels Linseed Company acquired Midland Linseed Products Company and then incorporated as the Archer Daniels Midland Company. [7] [8] The new corporation had total assets exceeding $11 million and controlled just over a third (35%) of the total linseed mill capacity within the United States. [9] [7]

In 1924, ADM was listed on the New York Stock Exchange. [10] [11] [12] A series of acquisitions over the next several years expanded the company's oil processing capabilities and agricultural operations, and a grain division was established in 1927. [13] [14] In 1930, ADM purchased control of the flour milling company Commander-Larabee Corp., which was capable of producing 32,000 barrels of flour per day. [15] [16] [17] In 1934 the company began operating its first continuous solvent extraction plant in Chicago, Illinois and could now produce soybean oil. [14] [18] The rapid development of similar extraction plants soon followed. [18]

By 1952, Archer Daniel Midland's workforce had expanded to 5,000 employees, [19] and by 1952 the company was operating overseas and manufacturing over 700 products. [20]

In 1962, the company acquired a trademark for "ADM" and began referring to itself by those initials. [21] In 1965, ADM registered the original patent for textured vegetable protein and began producing the soy flour product at its Decatur East Plant by 1966. [22] [23]

In 1966, Dwayne Andreas and his brother Lowell Andreas became minority shareholders in ADM. [24] In 1969, ADM relocated its headquarters from Minneapolis to Decatur, Illinois, a location closer to the company's soybean processing operations. [25] [26]

Dwayne Andreas period (1970–1997)

Dwayne Andreas was named CEO of ADM in 1970, [4] and two years later was elected chairman of the company's board. [27] Under his leadership, Archer Daniels Midland acquired many smaller agricultural companies and expanded into international markets, [28] eventually becoming one of the world's largest agricultural processing companies. [4] [29] During this period, the company's soybean exports increased from $1.5 billion to $7 billion. [4] [30]

Chief executive officers
Started Name
1970 Dwayne Andreas
1997 G. Allen Andreas
2006 Patricia A. Woertz
2015 Juan Luciano

In 1974, ADM made its first expansion into Europe and South America when the company acquired soybean plants in Holland and Brazil. [31] [8]

In 1982, ADM established international grain operations when it purchased a portion of Toepfer International, a Germany-based grain trading firm. [32]

In 1989, ADM purchased Collingwood Grain Inc. based in Hutchinson Kansas, adding 48 million bushels of grain storage at 36 terminal elevators. [33] Dwayne Andreas stepped down from his position as CEO in 1997 and was succeeded by his nephew G. Allen Andreas. [34] The transition occurred a year after the company pleaded guilty to price-fixing. [29] [28]

2001–present

In 2001, Paul B. Mulhollem became the company's president. [35] In December 2001, ADM completed the first U.S. commercial sale to Cuba since the embargo was imposed in October 1960. [36] The next year ADM sponsored a major agribusiness show in Havana, where the company signed a $10 million contract with Cuba’s food import agency, Alimport, to deliver rice, cooking oil, and soy. [36]

In March 2006, G. Allen Andreas announced he was stepping down as CEO. [37] Later, in May 2006, Patricia A. Woertz became the company's chief executive officer. [38] In February 2007, Woertz was elected chairman of the board at ADM. [39] In 2012, the company sought to acquire strategic holdings to support serving Asian markets through the acquisition of GrainCorp, an Australian grain firm with a network of storage and port facilities in Australia. [40] On November 28, 2013, the acquisition was blocked by the Australian Treasurer Joe Hockey after Australia's Foreign Investment Review Board failed to reach a consensus recommendation. [40]

The company moved its headquarters to Chicago in 2014. [41]

That same year, ADM completed its acquisition of Toepfer International, Germany's largest grain trader, and renamed the company ADM Germany GmbH. [42] The company also announced that it would buy Swiss-German natural ingredient company Wild Flavors for $3 billion, a move aimed at expanding ADM into health-oriented food sectors. [43]

ADM announced the appointment of current CEO Juan R. Luciano on November 5, 2014. [44] Luciano initially joined the company in 2011 as chief operating officer. [38] Under Luciano's leadership, the company restructured its business segments and pursued an aggressive strategy of acquisitions that expanded its human and animal nutrition business. [45] In October 2015, ADM announced the sale of its global cocoa business to Olam International. The sale was valued at about $1.2 billion. [46] Approximately 1,500 employees transferred to Olam with the sale. [47] In January 2017, ADM agreed to sell its crop risk services (insurance) unit to Validus Holdings for $127.5 million. [48]

In October 2016, ADM launched its venture capital arm, ADM Ventures, which focused initially on alternative proteins. [49]

The Wall Street Journal reported in January 2018 that ADM had approached Bunge Ltd. about a takeover, with details "unclear" at the time. [50] At that point, Bunge had a market value of about $9.8 billion, and was also being pursued by Glencore PLC for acquisition, since May 2017. [51] In January 2019, Juan Luciano clarified the company didn't need a "monster transformational transaction" and a deal was never made. [52]

In March 2018, ADM restructured its business segments into four units: carbohydrate solutions, nutrition, oilseeds, and origination or ag services. [53] The next year, the company announced it was consolidating the ag services and oilseed units. [54]

In September 2021, ADM acquired a 75% stake in four pet food companies for a total of $450 million, including PetDine, Pedigree Ovens, NutraDine, and The Pound Bakery. [55] Later that year in November, ADM acquired Serbian soy agribusiness Sojaprotein, [56] and completed its acquisition of Deerland Probiotics & Enzymes. [57]

In 2022, ADM saw rising profits due to the war in Ukraine and the global food crisis. [58]

Environmental record

The company has been the subject of several major federal lawsuits related to air pollution. In 2001, it agreed to pay a $1.46 million fine for violating federal and Illinois clean-air regulations at its Decatur feed plant and to spend $1.6 million to reduce air pollution there. [59] In 2003, the company settled federal air pollution complaints related to its efforts to avoid New Source Review provisions of the Clean Air Act that require pollution control upgrades when a plant is modernized. The company paid $4.5 million in penalties and more than $6 million to support environmental projects. In addition, ADM agreed to eliminate more than 60,000 tons of emissions of carbon monoxide, particulate matter, volatile organic compounds, and other pollutants from 42 plants in 17 states, at a cost of hundreds of millions of dollars. [60]

Carbon footprint

ADM reported Total CO2e emissions (Direct + Indirect) for the twelve months ending December 2022 at 15,630 Kt (-370 year over year). [61] In April 2020, ADM announced that by 2035, the company intends to have reduced its greenhouse gas emissions by 25%, and its energy intensity by 15%. [62]

Archer-Daniels-Midland Company's annual Total CO2e Emissions - Location-Based Scope 1 + Scope 2 (in kilotonnes)
Dec 2017 Dec 2018 Dec 2019 Dec 2020 Dec 2021 Dec 2022
17,471 [63] 17,363 [64] 17,800 [65] 16,230 [66] 16,000 [67] 15,630 [68]

Underground CO2 storage

ADM began underground CO2 storage under Mount Simon Sandstone in 2017. [69]

ADM has been storing over a million tons of CO2 under its own facility and as of 2023, is in the process of developing a pipeline to store more CO2 underneath Decatur, Illinois. ADM is working with Richland Community College to develop two associates degree programs in carbon capture. [70]

Products

Products include oils and meal from soybeans, cottonseed, sunflower seeds, canola, peanuts, flaxseed, Palm kernel, and DAG oil, as well as corn germ, corn gluten feed pellets, syrup, starch, glucose, dextrose, crystalline dextrose, high fructose corn syrup sweeteners, chocolate, ethanol, and wheat flour. End uses are consumption by people, livestock, and additives for fuel. In January 2008, ADM signed a three-year memorandum of understanding with Daimler AG and Bayer CropScience to explore the use of jatropha as a feedstock for biofuel. [71] [72] Natural flavors were added to ADM's product portfolio with the 2014 acquisition of Wild Flavors [73] and vanilla products were added through the acquisition of Rodelle in 2018. [74]

Long known as a food and ingredients company, it has also invested in fuel production. ADM nearly doubled capital spending in its 2007 budget to an estimated $1.12 billion. The increase is planned for bioenergy projects, focusing on bioethanol and biodiesel. [75]

Oilseeds processing

The oilseeds processing segment includes global activities related to the origination, merchandising, crushing, and further processing of oilseeds such as soybeans and soft seeds (cottonseed, sunflower seed, canola, and flaxseed) into vegetable oils and protein meals. [76]

The first quarter of 2020, during the COVID-19 pandemic, saw the operating profit of Ag Services and Oilseeds (ADM's biggest revenue segment) rise $422 million, or 1.2%. [77]

Corn processing

ADM's corn processing segment is engaged in corn wet milling and dry milling activities, with its asset base primarily located in the central part of the United States. The Corn Processing segment converts corn into sweeteners and starches, and bioproducts. Its products include ingredients used in the food and beverage industry including sweeteners, starch, syrup, glucose (dextrose). Dextrose and starch are used by the Corn Processing segment as feedstocks for its bioproducts operations. [76] In 2021, ADM was ranked second on the Top 50 Global Sweetener Companies list by FoodTalks. [78]

Agricultural services

ADM mix plant

ADM's agricultural services segment uses its U.S. grain elevator, global transportation network, and port operations to buy, store, clean, and transport agricultural commodities, such as oilseeds, corn, wheat, milo, oats, rice, and barley, and resells these commodities primarily as food and feed ingredients and as raw materials for the agricultural processing industry. [76]

Investor services

ADM investor services, Inc. is a registered futures commission merchant and a clearing member of all principal commodities exchanges in the U.S. ADM Investor Services International, Ltd., a member of commodity exchanges and clearing houses in Europe, and ADMIS Hong Kong Limited, offer broker services in Europe and Asia. [76]

Scandals

Sherman antitrust violation

In 1920 the US Department of Justice brought suit against the National Linseed Oil Trust for violating the Sherman Antitrust Act. Several co-defendants were named, including the Archer-Daniels Manufacturing Company. The suit alleged all of these companies were acting in collusion to raise prices, citing a spike in linseed oil costs between 1916 and 1918, when the price rose from $.50 per gallon to $1.80. [79]

Price fixing

In 1993, the company was the subject of a lysine price-fixing investigation by the U.S. Justice Department. Senior ADM executives were indicted on criminal charges for engaging in price-fixing within the international lysine market. In a tape played at the trial, ADM's President said that a single phrase inspired the company: "Our competitors are our friends. Our customers are the enemy." [80] Three of ADM's top officials, including vice chairman Michael Andreas were eventually sentenced to federal prison in 1999. Moreover, in 1997, the company was fined $100 million, the largest antitrust fine in U.S. history at the time. [81] Mark Whitacre, FBI informant and whistleblower of the lysine price-fixing conspiracy, would also find himself in legal trouble for embezzling money from ADM during his time as an informant for the FBI. In addition, according to ADM's 2005 annual report, a settlement was reached under which ADM paid $400 million in 2005 to settle a class action antitrust suit. [82] The Informant is a nonfiction thriller book based on this event, which was later adapted into the 2009 film The Informant!. [83]

Tax dodging

A noteworthy case of transfer mispricing came to light in 2011 in Argentina involving the world's four largest grain traders: ADM, Bunge, Cargill and LDC. Argentina's revenue and customs service began an investigation into the four companies when prices for agricultural commodities spiked in 2008 and yet very little profit for the four companies had been reported to the office. As a result of the investigation, it was alleged that the companies had submitted false declarations of sales and routed profits through tax havens or through their headquarters. In some cases, they were said to have used phantom firms to buy grain and had inflated costs in Argentina in order to reduce the recorded profits earned in the country. [84] According to the country's revenue and customs service, the outstanding taxes amounted to almost US$1 billion. [85] The companies involved have denied the allegations. To date, the Argentinian tax authorities have not replied to the Swiss NGO Public Eye’s request regarding the current state of the case. [86] In its 2018 annual report to the US Securities and Exchange Commission (SEC), Bunge mentioned provisions which suggest that the case is still ongoing: "[A]s of December 31, 2018, Bunge's Argentine subsidiary had received income tax assessments relating to 2006 through 2009 of approximately 1,276 million Argentine pesos (approximately $34 million), plus applicable interest on the outstanding amount of approximately 4,246 million Argentine pesos (approximately $113 million [87])." [88]

Violation of the Foreign Corrupt Practices Act

On December 20, 2013, the SEC announced that it had charged ADM for failing to prevent illicit payments ( bribes) made by its foreign subsidiaries to Ukrainian government officials in violation of the FCPA. Alfred C. Toepfer International Ukraine Ltd. (ACTI Ukraine), plead guilty in the Central District of Illinois to one count of conspiracy in violation of the anti-bribery sections of the FCPA. They agreed to pay $17.8 million in fines. The Department of Justice also entered into a non-prosecution agreement with ADM due to the company's failure to implement a system of internal financial controls, addressing improper payments both in Ukraine and by an ADM joint venture in Venezuela. ADM agreed to pay more than $36 million to settle the SEC's charges, bringing the total amount paid to over $54 million. [89] [90]

The Swiss NGO Public Eye elaborated the case. [91] [92]

Sonny Perdue land sale

In 2021, an investigation by the Washington Post found that ADM had sold land to incoming Secretary of Agriculture Sonny Perdue in 2017 at a fraction of its estimated value. Ethics lawyers had legal and ethical concerns about the sale, questioning whether it amounted to bribery. According to the Post, ADM "sold the land at a small fraction of its estimated value just as it stood to benefit from a friendly secretary of agriculture." [93]

Accounting practices

In 2020, ADM's board agreed to have bonuses of senior executives tied to the nutrition segment's success—a unit which accounts for less than 10 percent of the company's revenue—replacing the standard practice of tying the award to adjusted earnings. In January 2023, its seven top executives collectively received shares worth about $72 million for exceeding those performance metrics. [94] [95]

In January 2024, ADM disclosed that the SEC requested information regarding its accounting practices at its nutrition business on "intersegment transactions." ADM suspended its CFO, postponed its quarterly earnings report and annual filings, and said it was cooperating with the SEC investigation. [96] In March 2024, FBI agents delivered grand jury subpoenas to current and former employees of ADM, authorized by officials at the U.S. attorney's Manhattan office. [97]

See also

References

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  71. ^ "Daimler, ADM, Bayer to test Jatropha for biodiesel". Reuters. January 9, 2008. Retrieved October 23, 2020.
  72. ^ Sims, Bryan (February 11, 2008). "ADM, Daimler, Bayer partner to explore jatropha". www.biodieselmagazine.com. Retrieved October 23, 2020.
  73. ^ "Acquisition adds natural flavors to Archer Daniels Midland portfolio". Retrieved November 9, 2020.
  74. ^ Team, F. N. I. (September 11, 2018). "Americas: ADM buys vanilla supplier". Food News International. Retrieved February 14, 2021.
  75. ^ Fusaro, Dave (March 26, 2007). "ADM’s big bet on fuel". Food Processing . Retrieved June 6, 2007.
  76. ^ a b c d "UNITED STATES SECURITIES AND EXCHANGE COMMISSION : WASHINGTON, D. C. 20549 : FORM 10-K". Sec.gov. Retrieved November 30, 2015.
  77. ^ "ADM first-quarter profit beats estimates, as CEO cites 'many unknowns' of pandemic". CNBC. April 30, 2020. Retrieved June 20, 2020.
  78. ^ Huang, Lemon. "2021年全球甜味剂企业50强". www.foodtalks.cn (in Chinese). Retrieved January 17, 2022.
  79. ^ "Sues to dissolve Trust", New York Times. July 1, 1920. Retrieved 7/26/2015.
  80. ^ "Antitrust Division | An Inside Look At A Cartel At Work: Common Characteristics Of International Cartels | United States Department of Justice". www.justice.gov. June 25, 2015. Retrieved March 11, 2024.
  81. ^ Hunter-Gault, Charlayne (October 15, 1996). "ADM: Who's Next?". MacNeil/Lehrer Newshour (PBS). Archived from the original on September 30, 2007. Retrieved October 17, 2007.
  82. ^ "Archer Daniels Midland Company. 2005 Annual Report". Adm.com. p. 52. Archived from the original on January 21, 2009. Retrieved November 30, 2015.
  83. ^ "The Serious Story Behind 'The Informant'". NPR. September 20, 2009. Retrieved June 28, 2023.
  84. ^ Lawrence, Felicity (June 1, 2011). "Argentina accuses world's largest grain traders of huge tax evasion". The Guardian. ISSN  0261-3077. Retrieved August 1, 2019.
  85. ^ Bloomberg L.P. (March 25, 2013). "Grain exporters owe Argentina 951 million in taxes". Retrieved August 1, 2019.
  86. ^ Public Eye (June 2019). "Agricultural Commodity Traders in Switzerland" (PDF). Retrieved August 1, 2019.
  87. ^ Meredith, Sam (August 31, 2018). "Argentina's peso has now fallen 52% against the dollar this year". CNBC. Retrieved August 1, 2019.
  88. ^ "Bunge Ltd (BG) 10K Annual Reports & 10Q SEC Filings". Last10K. Retrieved August 1, 2019.
  89. ^ "SEC Charges Archer-Daniels-Midland Company With FCPA Violations, Filing Date Dec 20, 2013". SEC. Retrieved December 22, 2013.
  90. ^ "ADM Subsidiary Pleads Guilty to Conspiracy to Violate the Foreign Corrupt Practices Act". Justice.gov. December 20, 2013.
  91. ^ Public Eye (June 2019). "Agricultural Commodity Traders in Switzerland" (PDF). Retrieved August 1, 2019.
  92. ^ "ADM Subsidiary Pleads Guilty to Conspiracy to Violate the Foreign Corrupt Practices Act". www.justice.gov. December 20, 2013. Retrieved August 1, 2019.
  93. ^ Yi, Joy Sharon; O'Connor, Erin Patrick. "The land was worth millions. A Big Ag corporation sold it to Sonny Perdue's company for $250,000". Washington Post. Retrieved June 30, 2021.
  94. ^ Veloso, Tarso; Melin, Anders (January 24, 2024). "ADM Unit Being Probed Helped Make Leaders More Than $70 Million". Bloomberg News.
  95. ^ Casey, Simon; Veloso, Tarso; Freitas Jr., Gerson (January 23, 2024). "ADM Probe Highlights Struggle to Expand Beyond Crop Trading". Bloomberg News.
  96. ^ "Archer-Daniels-Midland plunged by a record 23% after suspending its CFO and cutting its outlook on an internal accounting probe". Fortune. January 22, 2024. Retrieved March 10, 2024.
  97. ^ Prentice, Chris (March 7, 2024). "Exclusive: FBI agents deliver grand jury subpoenas as ADM criminal probe escalates, sources say". Reuters. Retrieved March 8, 2024.

External links

  • Official website Edit this at Wikidata
  • Business data for Archer-Daniels-Midland Company:
  • "Patents owned by Archer Daniels Midland". U.S. Patent and Trademark Office. Archived from the original on November 9, 2020. Retrieved December 6, 2005.
  • Shurtleff, William; Aoyagi, Akiko (2020). History of ADM (Archer Daniels Midland Co.) and the Andreas Family's Work with Soybeans and Soyfoods (1884-2020) (PDF). Lafayette, CA: Soyinfo Center. ISBN  9781948436236.
From Wikipedia, the free encyclopedia
(Redirected from Archer Daniels Midland)

Archer-Daniels-Midland Company
ADM
Company type Public
Industry
Founded1902; 122 years ago (1902) in Minneapolis, Minnesota, U.S.
Founders
Headquarters 77 West Wacker Drive
Chicago, Illinois, U.S.
Key people
Juan Luciano
( Chairman and CEO)
Products
ServicesFlour milling
RevenueDecrease US$93.9 billion (2023)
Decrease US$3.48 billion (2023)
Total assetsDecrease US$54.6 billion (2023)
Total equityDecrease US$24.1 billion (2023)
Number of employees
41,802 (2023)
Subsidiaries American River Transportation Company
Website adm.com
Footnotes / references
[1]
Logo variant used in the corporate website
Former corporate logo

The Archer-Daniels-Midland Company, commonly known as ADM, is an American multinational food processing and commodities trading corporation founded in 1902 and headquartered in Chicago, Illinois. The company operates more than 270 plants and 420 crop procurement facilities worldwide, where cereal grains and oilseeds are processed into products used in food, beverage, nutraceutical, industrial, and animal feed markets worldwide.

ADM ranked No. 35 in the 2023 Fortune 500 list of the largest United States corporations. [2]

The company also provides agricultural storage and transportation services. The American River Transportation Company along with ADM Trucking, Inc., are subsidiaries of ADM.

ADM has been the subject of significant media attention and infamy over the years with its various scandals, one inspiring a novel and subsequent film The Informant!.

History

Early history

In 1902, John W. Daniels started a linseed crushing business in Minneapolis, Minnesota. [3] [4] [5] George A. Archer joined the operation the next year, and in 1905 the firm's name officially became the Archer-Daniels Linseed Company. [3] [6] In 1923, Archer-Daniels Linseed Company acquired Midland Linseed Products Company and then incorporated as the Archer Daniels Midland Company. [7] [8] The new corporation had total assets exceeding $11 million and controlled just over a third (35%) of the total linseed mill capacity within the United States. [9] [7]

In 1924, ADM was listed on the New York Stock Exchange. [10] [11] [12] A series of acquisitions over the next several years expanded the company's oil processing capabilities and agricultural operations, and a grain division was established in 1927. [13] [14] In 1930, ADM purchased control of the flour milling company Commander-Larabee Corp., which was capable of producing 32,000 barrels of flour per day. [15] [16] [17] In 1934 the company began operating its first continuous solvent extraction plant in Chicago, Illinois and could now produce soybean oil. [14] [18] The rapid development of similar extraction plants soon followed. [18]

By 1952, Archer Daniel Midland's workforce had expanded to 5,000 employees, [19] and by 1952 the company was operating overseas and manufacturing over 700 products. [20]

In 1962, the company acquired a trademark for "ADM" and began referring to itself by those initials. [21] In 1965, ADM registered the original patent for textured vegetable protein and began producing the soy flour product at its Decatur East Plant by 1966. [22] [23]

In 1966, Dwayne Andreas and his brother Lowell Andreas became minority shareholders in ADM. [24] In 1969, ADM relocated its headquarters from Minneapolis to Decatur, Illinois, a location closer to the company's soybean processing operations. [25] [26]

Dwayne Andreas period (1970–1997)

Dwayne Andreas was named CEO of ADM in 1970, [4] and two years later was elected chairman of the company's board. [27] Under his leadership, Archer Daniels Midland acquired many smaller agricultural companies and expanded into international markets, [28] eventually becoming one of the world's largest agricultural processing companies. [4] [29] During this period, the company's soybean exports increased from $1.5 billion to $7 billion. [4] [30]

Chief executive officers
Started Name
1970 Dwayne Andreas
1997 G. Allen Andreas
2006 Patricia A. Woertz
2015 Juan Luciano

In 1974, ADM made its first expansion into Europe and South America when the company acquired soybean plants in Holland and Brazil. [31] [8]

In 1982, ADM established international grain operations when it purchased a portion of Toepfer International, a Germany-based grain trading firm. [32]

In 1989, ADM purchased Collingwood Grain Inc. based in Hutchinson Kansas, adding 48 million bushels of grain storage at 36 terminal elevators. [33] Dwayne Andreas stepped down from his position as CEO in 1997 and was succeeded by his nephew G. Allen Andreas. [34] The transition occurred a year after the company pleaded guilty to price-fixing. [29] [28]

2001–present

In 2001, Paul B. Mulhollem became the company's president. [35] In December 2001, ADM completed the first U.S. commercial sale to Cuba since the embargo was imposed in October 1960. [36] The next year ADM sponsored a major agribusiness show in Havana, where the company signed a $10 million contract with Cuba’s food import agency, Alimport, to deliver rice, cooking oil, and soy. [36]

In March 2006, G. Allen Andreas announced he was stepping down as CEO. [37] Later, in May 2006, Patricia A. Woertz became the company's chief executive officer. [38] In February 2007, Woertz was elected chairman of the board at ADM. [39] In 2012, the company sought to acquire strategic holdings to support serving Asian markets through the acquisition of GrainCorp, an Australian grain firm with a network of storage and port facilities in Australia. [40] On November 28, 2013, the acquisition was blocked by the Australian Treasurer Joe Hockey after Australia's Foreign Investment Review Board failed to reach a consensus recommendation. [40]

The company moved its headquarters to Chicago in 2014. [41]

That same year, ADM completed its acquisition of Toepfer International, Germany's largest grain trader, and renamed the company ADM Germany GmbH. [42] The company also announced that it would buy Swiss-German natural ingredient company Wild Flavors for $3 billion, a move aimed at expanding ADM into health-oriented food sectors. [43]

ADM announced the appointment of current CEO Juan R. Luciano on November 5, 2014. [44] Luciano initially joined the company in 2011 as chief operating officer. [38] Under Luciano's leadership, the company restructured its business segments and pursued an aggressive strategy of acquisitions that expanded its human and animal nutrition business. [45] In October 2015, ADM announced the sale of its global cocoa business to Olam International. The sale was valued at about $1.2 billion. [46] Approximately 1,500 employees transferred to Olam with the sale. [47] In January 2017, ADM agreed to sell its crop risk services (insurance) unit to Validus Holdings for $127.5 million. [48]

In October 2016, ADM launched its venture capital arm, ADM Ventures, which focused initially on alternative proteins. [49]

The Wall Street Journal reported in January 2018 that ADM had approached Bunge Ltd. about a takeover, with details "unclear" at the time. [50] At that point, Bunge had a market value of about $9.8 billion, and was also being pursued by Glencore PLC for acquisition, since May 2017. [51] In January 2019, Juan Luciano clarified the company didn't need a "monster transformational transaction" and a deal was never made. [52]

In March 2018, ADM restructured its business segments into four units: carbohydrate solutions, nutrition, oilseeds, and origination or ag services. [53] The next year, the company announced it was consolidating the ag services and oilseed units. [54]

In September 2021, ADM acquired a 75% stake in four pet food companies for a total of $450 million, including PetDine, Pedigree Ovens, NutraDine, and The Pound Bakery. [55] Later that year in November, ADM acquired Serbian soy agribusiness Sojaprotein, [56] and completed its acquisition of Deerland Probiotics & Enzymes. [57]

In 2022, ADM saw rising profits due to the war in Ukraine and the global food crisis. [58]

Environmental record

The company has been the subject of several major federal lawsuits related to air pollution. In 2001, it agreed to pay a $1.46 million fine for violating federal and Illinois clean-air regulations at its Decatur feed plant and to spend $1.6 million to reduce air pollution there. [59] In 2003, the company settled federal air pollution complaints related to its efforts to avoid New Source Review provisions of the Clean Air Act that require pollution control upgrades when a plant is modernized. The company paid $4.5 million in penalties and more than $6 million to support environmental projects. In addition, ADM agreed to eliminate more than 60,000 tons of emissions of carbon monoxide, particulate matter, volatile organic compounds, and other pollutants from 42 plants in 17 states, at a cost of hundreds of millions of dollars. [60]

Carbon footprint

ADM reported Total CO2e emissions (Direct + Indirect) for the twelve months ending December 2022 at 15,630 Kt (-370 year over year). [61] In April 2020, ADM announced that by 2035, the company intends to have reduced its greenhouse gas emissions by 25%, and its energy intensity by 15%. [62]

Archer-Daniels-Midland Company's annual Total CO2e Emissions - Location-Based Scope 1 + Scope 2 (in kilotonnes)
Dec 2017 Dec 2018 Dec 2019 Dec 2020 Dec 2021 Dec 2022
17,471 [63] 17,363 [64] 17,800 [65] 16,230 [66] 16,000 [67] 15,630 [68]

Underground CO2 storage

ADM began underground CO2 storage under Mount Simon Sandstone in 2017. [69]

ADM has been storing over a million tons of CO2 under its own facility and as of 2023, is in the process of developing a pipeline to store more CO2 underneath Decatur, Illinois. ADM is working with Richland Community College to develop two associates degree programs in carbon capture. [70]

Products

Products include oils and meal from soybeans, cottonseed, sunflower seeds, canola, peanuts, flaxseed, Palm kernel, and DAG oil, as well as corn germ, corn gluten feed pellets, syrup, starch, glucose, dextrose, crystalline dextrose, high fructose corn syrup sweeteners, chocolate, ethanol, and wheat flour. End uses are consumption by people, livestock, and additives for fuel. In January 2008, ADM signed a three-year memorandum of understanding with Daimler AG and Bayer CropScience to explore the use of jatropha as a feedstock for biofuel. [71] [72] Natural flavors were added to ADM's product portfolio with the 2014 acquisition of Wild Flavors [73] and vanilla products were added through the acquisition of Rodelle in 2018. [74]

Long known as a food and ingredients company, it has also invested in fuel production. ADM nearly doubled capital spending in its 2007 budget to an estimated $1.12 billion. The increase is planned for bioenergy projects, focusing on bioethanol and biodiesel. [75]

Oilseeds processing

The oilseeds processing segment includes global activities related to the origination, merchandising, crushing, and further processing of oilseeds such as soybeans and soft seeds (cottonseed, sunflower seed, canola, and flaxseed) into vegetable oils and protein meals. [76]

The first quarter of 2020, during the COVID-19 pandemic, saw the operating profit of Ag Services and Oilseeds (ADM's biggest revenue segment) rise $422 million, or 1.2%. [77]

Corn processing

ADM's corn processing segment is engaged in corn wet milling and dry milling activities, with its asset base primarily located in the central part of the United States. The Corn Processing segment converts corn into sweeteners and starches, and bioproducts. Its products include ingredients used in the food and beverage industry including sweeteners, starch, syrup, glucose (dextrose). Dextrose and starch are used by the Corn Processing segment as feedstocks for its bioproducts operations. [76] In 2021, ADM was ranked second on the Top 50 Global Sweetener Companies list by FoodTalks. [78]

Agricultural services

ADM mix plant

ADM's agricultural services segment uses its U.S. grain elevator, global transportation network, and port operations to buy, store, clean, and transport agricultural commodities, such as oilseeds, corn, wheat, milo, oats, rice, and barley, and resells these commodities primarily as food and feed ingredients and as raw materials for the agricultural processing industry. [76]

Investor services

ADM investor services, Inc. is a registered futures commission merchant and a clearing member of all principal commodities exchanges in the U.S. ADM Investor Services International, Ltd., a member of commodity exchanges and clearing houses in Europe, and ADMIS Hong Kong Limited, offer broker services in Europe and Asia. [76]

Scandals

Sherman antitrust violation

In 1920 the US Department of Justice brought suit against the National Linseed Oil Trust for violating the Sherman Antitrust Act. Several co-defendants were named, including the Archer-Daniels Manufacturing Company. The suit alleged all of these companies were acting in collusion to raise prices, citing a spike in linseed oil costs between 1916 and 1918, when the price rose from $.50 per gallon to $1.80. [79]

Price fixing

In 1993, the company was the subject of a lysine price-fixing investigation by the U.S. Justice Department. Senior ADM executives were indicted on criminal charges for engaging in price-fixing within the international lysine market. In a tape played at the trial, ADM's President said that a single phrase inspired the company: "Our competitors are our friends. Our customers are the enemy." [80] Three of ADM's top officials, including vice chairman Michael Andreas were eventually sentenced to federal prison in 1999. Moreover, in 1997, the company was fined $100 million, the largest antitrust fine in U.S. history at the time. [81] Mark Whitacre, FBI informant and whistleblower of the lysine price-fixing conspiracy, would also find himself in legal trouble for embezzling money from ADM during his time as an informant for the FBI. In addition, according to ADM's 2005 annual report, a settlement was reached under which ADM paid $400 million in 2005 to settle a class action antitrust suit. [82] The Informant is a nonfiction thriller book based on this event, which was later adapted into the 2009 film The Informant!. [83]

Tax dodging

A noteworthy case of transfer mispricing came to light in 2011 in Argentina involving the world's four largest grain traders: ADM, Bunge, Cargill and LDC. Argentina's revenue and customs service began an investigation into the four companies when prices for agricultural commodities spiked in 2008 and yet very little profit for the four companies had been reported to the office. As a result of the investigation, it was alleged that the companies had submitted false declarations of sales and routed profits through tax havens or through their headquarters. In some cases, they were said to have used phantom firms to buy grain and had inflated costs in Argentina in order to reduce the recorded profits earned in the country. [84] According to the country's revenue and customs service, the outstanding taxes amounted to almost US$1 billion. [85] The companies involved have denied the allegations. To date, the Argentinian tax authorities have not replied to the Swiss NGO Public Eye’s request regarding the current state of the case. [86] In its 2018 annual report to the US Securities and Exchange Commission (SEC), Bunge mentioned provisions which suggest that the case is still ongoing: "[A]s of December 31, 2018, Bunge's Argentine subsidiary had received income tax assessments relating to 2006 through 2009 of approximately 1,276 million Argentine pesos (approximately $34 million), plus applicable interest on the outstanding amount of approximately 4,246 million Argentine pesos (approximately $113 million [87])." [88]

Violation of the Foreign Corrupt Practices Act

On December 20, 2013, the SEC announced that it had charged ADM for failing to prevent illicit payments ( bribes) made by its foreign subsidiaries to Ukrainian government officials in violation of the FCPA. Alfred C. Toepfer International Ukraine Ltd. (ACTI Ukraine), plead guilty in the Central District of Illinois to one count of conspiracy in violation of the anti-bribery sections of the FCPA. They agreed to pay $17.8 million in fines. The Department of Justice also entered into a non-prosecution agreement with ADM due to the company's failure to implement a system of internal financial controls, addressing improper payments both in Ukraine and by an ADM joint venture in Venezuela. ADM agreed to pay more than $36 million to settle the SEC's charges, bringing the total amount paid to over $54 million. [89] [90]

The Swiss NGO Public Eye elaborated the case. [91] [92]

Sonny Perdue land sale

In 2021, an investigation by the Washington Post found that ADM had sold land to incoming Secretary of Agriculture Sonny Perdue in 2017 at a fraction of its estimated value. Ethics lawyers had legal and ethical concerns about the sale, questioning whether it amounted to bribery. According to the Post, ADM "sold the land at a small fraction of its estimated value just as it stood to benefit from a friendly secretary of agriculture." [93]

Accounting practices

In 2020, ADM's board agreed to have bonuses of senior executives tied to the nutrition segment's success—a unit which accounts for less than 10 percent of the company's revenue—replacing the standard practice of tying the award to adjusted earnings. In January 2023, its seven top executives collectively received shares worth about $72 million for exceeding those performance metrics. [94] [95]

In January 2024, ADM disclosed that the SEC requested information regarding its accounting practices at its nutrition business on "intersegment transactions." ADM suspended its CFO, postponed its quarterly earnings report and annual filings, and said it was cooperating with the SEC investigation. [96] In March 2024, FBI agents delivered grand jury subpoenas to current and former employees of ADM, authorized by officials at the U.S. attorney's Manhattan office. [97]

See also

References

  1. ^ "2023 Annual Report (Form 10-K)". U.S. Securities and Exchange Commission. March 12, 2024.
  2. ^ "Fortune 500". Fortune. Retrieved June 28, 2023.
  3. ^ a b Pederson, Jay P. (2000). International Directory of Corporate Histories. Vol. 32. St. James Press. p. 57. ISBN  9781558623910. John W. Daniels began crushing flaxseed to make linseed oil in Ohio in 1878, and in 1902 he moved to Minneapolis, Minnesota, to organize the Daniels Linseed Company. The company consisted of a flax crushing plant that made three products: raw linseed oil, boiled linseed oil, and linseed cake or meal. In 1903 George A. Archer joined the firm, and in a few years it became the Archer-Daniels Linseed Company.
  4. ^ a b c d Schneider, Keith (November 17, 2016). "Dwayne O. Andreas, Who Turned Archer Daniels Midland Into Food Giant, Dies at 98". The New York Times. Retrieved April 19, 2023.
  5. ^ Black, Sam; Halter, Nick (October 4, 2013). "Why ADM should move home to Minnesota". Minneapolis / St. Paul Business Journal. Retrieved April 19, 2023.
  6. ^ Cayton, Rodd (October 9, 2003). "ADM's bean processing plant isn't doing soy bad in Lincoln". Lincoln Journey Star – via Nexis. Company founded in Minneapolis in 1902 by John W. Daniels as Daniels Linseed Co. Changed name to Archer Daniels Linseed Co. in 1905; became Archer Daniels Midland in 1923.
  7. ^ a b Pederson, Jay P. (2000). International Directory of Corporate Histories. Vol. 32. St. James Press. p. 57. ISBN  9781558623910. In 1923 the company purchased the Midland Linseed Products Company and then incorporated as the Archer Daniels Midland Company.
  8. ^ a b Valente, Michael (2009). "Archer Daniels Midland Company (ADM)" (PDF). American Chemical Society.
  9. ^ "ADM Milling closing N Kansas City mill". Wausau Daily Herald. April 23, 1923. p. 10. Retrieved April 20, 2023. Merger of the Archer of the Archer-Daniels Linseed company and Midland Linseed Products company of Minneapolis into a corporation with total assets exceeding $11,000,000 and which will control about thirty-five per cent of the linseed mill capacity of the United States, became known here today.
  10. ^ Mall, Scott (April 11, 2021). "FreightWaves Haul of Fame: ADM Trucking serves ADM and others". FreightWaves. Retrieved July 5, 2023. The company went public in 1924, and was listed on the New York Stock Exchange.
  11. ^ LUSVARDI, CHRIS (December 3, 2009). "ADM execs ring closing bell at New York Stock Exchange". Herald-Review.com. Retrieved April 19, 2023.
  12. ^ Mattioli, Dana; Bunge, Jacob (January 19, 2018). "ADM Has Made Takeover Approach to Bunge Ltd". The Wall Street Journal. Retrieved April 19, 2023.
  13. ^ Pederson, Jay P. (2000). International Directory of Corporate Histories. Vol. 32. St. James Press. p. 57. ISBN  978-1-55862-391-0. Throughout the 1920s the company made steady purchases of oil processing companies in the Midwest while engaging in other agricultural activities.
  14. ^ a b Kotrba, Ron; Bryan, Tom (April 1, 2006). "Holding Its Lead". Ethanol Producers Magazine. Retrieved April 19, 2023. In 1927, ADM's grain division was established, and in 1934, the company initiated its first continuous solvent extraction at its Chicago soybean crushing facility, using soybeans and the new chemical process to successfully extract soybean oil from the oilseeds.
  15. ^ "Business: Commander to the Gulf". Time. June 27, 1932.
  16. ^ Sosland, Josh (March 10, 2010). "ADM Milling closing N Kansas City mill". Baking Business. Retrieved April 20, 2023.
  17. ^ Mitchell, Julie A. (2001). Notable Corporate Chronologies. Vol. 1. Gale Group. p. 162. ISBN  978-0-7876-5050-6. 1930: ADM acquires the Commander - Larabee Co., a huge flour miller capable of producing 32,000 barrels per day.
  18. ^ a b MacGree, Ernest A. (August 1947). "Vegetable Oil extraction solvents; History and general composition". Oil Mill Gazetter. International Association of Oil Mill Superintendents. Retrieved July 5, 2023 – via Texas A&M University. The ADM plant in March 1934 represented a 'turning point and marketed the beginning of the large scale edible oil extraction industry as it is known today.' Installations of other large-capacity continuous plants followed in rapid succession.
  19. ^ Kotrba, Ron; Bryan, Tom (April 1, 2006). "Holding Its Lead". Ethanol Producers Magazine. Retrieved April 19, 2023. By 1952, ADM's workforce had grown to 5,000 employees.
  20. ^ Pederson, Jay P. (2000). International Directory of Corporate Histories. Vol. 32. St. James Press. p. 57. ISBN  978-1-55862-391-0. When President Thomas L. Daniels (son of the founder) and Chairperson Samuel Mairs celebrated Archer Daniels Midland's 50th anniversary in 1952, the company was manufacturing over 700 standard products and had extended its operations overseas.
  21. ^ Aoyagi, Akiko; Shurtleff, William (August 7, 2020). History of ADM (Archer Daniels Midland Co.) and the Andreas Family's Work with Soybeans and Soyfoods (1884-2020) (PDF). Soyinfo Center. p. 6. 1962 April – Archer Daniels Midland Co. introduces a new trademark and decides to consistently call itself "ADM" (Soybean Digest, p. 27).
  22. ^ Reid, Tony (September 30, 2022). "Decatur a central part of ADM's past, future". Herald & Review. Retrieved April 21, 2023.
  23. ^ "Archer-Daniels-Midland: "ADM Has the Formulation Knowledge That Brings New and Exciting Products to Life" - vegconomist - the vegan business magazine". Vegconomist. December 2, 2021. Retrieved April 21, 2023.
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  25. ^ Gasparro, Annie (September 26, 2013). "ADM Leaves Decatur With Little Town Blues". The Wall Street Journal. Retrieved February 17, 2021. It moved its headquarters here from Minneapolis in 1969.
  26. ^ Perlman, Seth (March 1, 2017). "Archer Daniels Midland - 4,159 employees". Herald & Review. Retrieved February 17, 2021. ADM first found a home in Decatur in 1939 and in 1969 ADM moved its corporate offices and research laboratory to Decatur.
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  30. ^ Meersman, Tom (November 29, 2016). "Former ADM executive Dwayne Andreas had deep ties to Minnesota and Hubert Humphrey". Star Tribune. Retrieved May 29, 2022.
  31. ^ Aoyagi, Akiko; Shurtleff, William (August 7, 2020). History of ADM (Archer Daniels Midland Co.) and the Andreas Family's Work with Soybeans and Soyfoods (1884-2020) (PDF). Soyinfo Center. p. 8. 1974 – ADM in Brazil. 1974 acquired; soybean processing, edible oil refinery; Technologia Tecnologia em Vegetais e Proteinas SA / 50% 1974 acquired / soybean processing, edible oil;
  32. ^ Aoyagi, Akiko; Shurtleff, William (August 7, 2020). History of ADM (Archer Daniels Midland Co.) and the Andreas Family's Work with Soybeans and Soyfoods (1884-2020) (PDF). Soyinfo Center. p. 8. 1982 Dec. – ADM buys 80% of Alfred C. Toepfer International (ACTI), a grain trading firm based in Germany. With this, ADM became a multinational grain trader
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  34. ^ Eichenwald, Kurt (April 18, 1997). "Andreas Retires as Chief of Archer Daniels". The New York Times. ISSN  0362-4331. Retrieved April 21, 2023.
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  36. ^ a b "U.S. Companies Make Millions At Cuba Business Fair". PBS News hour. October 1, 2002. Retrieved September 21, 2023.
  37. ^ Lambert, Emily (March 24, 2006). "End of the Line". Forbes. Retrieved April 21, 2023.
  38. ^ a b Cancino, Alejandra (November 6, 2014). "Pat Woertz retiring; ADM names new CEO". Chicago Tribune. Retrieved April 20, 2023.
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External links

  • Official website Edit this at Wikidata
  • Business data for Archer-Daniels-Midland Company:
  • "Patents owned by Archer Daniels Midland". U.S. Patent and Trademark Office. Archived from the original on November 9, 2020. Retrieved December 6, 2005.
  • Shurtleff, William; Aoyagi, Akiko (2020). History of ADM (Archer Daniels Midland Co.) and the Andreas Family's Work with Soybeans and Soyfoods (1884-2020) (PDF). Lafayette, CA: Soyinfo Center. ISBN  9781948436236.

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