ADM assumes management of Farmland grain elevators
June 01, 2001
by Emily Wilson
Archer Daniels Midland Co. and Farmland Industries, Inc. on May 1 completed an agreement under which ADM is leasing and managing 24 Farmland grain elevators with combined storage capacity of about 4.7 million tonnes.
"The grain business is inherently a capital-intensive, low-margin business that under current economic conditions Farmland cannot continue to operate independently," said Bob Honse, president and chief executive officer of Farmland, based in Kansas City, Missouri, U.S.
Honse said the agreement with ADM will enable Farmland "to make great strides toward significant debt reduction. At the same time, ADM/Farmland provides a solid, patronage-based grain business for our membership."
For ADM, the new venture allows the company to expand its system into key areas where it did not have a significant presence, said G. Allen Andreas, chairman and c.e.o.
Farmland-Atwood, a provider of risk management and financial and grain support services, also was purchased by ADM but was not part of the joint venture. Tradigrain, Farmland’s international grain trading subsidiary with offices in 10 countries, was not included in the deal, nor was Farmland’s grain processing division.