ADM shifts soybean capacity to China

Archer Daniels Midland has announced that as a result of reduced soybean processing margins in the United States, it will decrease its soybean crush rates at several manufacturing locations in the US.

Production is expected to shift to its existing manufacturing locations throughout China, where it currently operates 10 facilities. In the US there are currently 15 soybean crushing facilities, but China now accounts for about half of the total crushing capacity.

The facilities involved are Fostoria, Ohio; Fredonia, Kansas; Little Rock, Arkansas; Kershaw, South Carolina; Quincy, Illinois and Valdosta, Georgia. Some of the plants are expected to close, although ADM did not specify which ones have been earmarked.

The rising cost of soybeans coupled with increased processing costs has meant that much of the company's US crushing capacity is simply not profitable any longer. In China, where production costs are considerably cheaper, margins have now become much more viable.

ADM's shift mirrors a global trend in the soybean industry, as capacity slowly shifts from the US, once the world's leading processor. Next year both Argentina and Brazil are expected to exceed US soybean processing volumes.

The company also said that its defined oil production will be curtailed due to increased crude oil export demand.

ADM is a world leader in agricultural processing. The company is one of the world's largest processors of soybeans, corn, wheat and cocoa. ADM is also a leader in soy meal and oil, ethanol, high fructose corn syrup (HFCS) and flour. Headquartered in Decatur, Illinois, ADM has over 24,000 employees, more than 260 processing plants and net sales for the fiscal year ended June 30, 2002 of $22.6 billion (€25.4m).