Driven by the growing demand for crops and other agricultural
products in Asia,
Archer Daniels Midland Company
) decided to streamline its investments in the Asia-Pacific region.
The company's products have already been closely associated with
the Asian market for many years. However, given the rising
population and income levels in the continent, diets have also
witnessed a remarkable improvement. Taking this into consideration,
the company has decided to undertake specific actions to develop
its operations in the region.
As part of its strategic initiatives, Archer Daniels recently made
an announcement about constructing a soluble-fiber manufacturing
complex and a sweetener facility in North China at the port of
Tianjin. These will cater to the Chinese demand for superior
quality food ingredients. The sweetener and soluble fiber
facilities are anticipated to be fully operational in the beginning
and by the second half of 2015, respectively.
Alongside, Archer Daniels has built a facility in Nanjing, China,
to manufacture animal feed premix, which when combined with animal
rations are likely to support optimal growth and good health. This
facility, which is expected to complement the company's existing
Chinese operations, is slated to commence operations from mid 2015.
Also, with the acquisition of the remaining stake in Toepfer, the
company will solidify its merchandising operations in the
Asia-Pacific region. Further, in order to facilitate sales of
better-value products, Archer Daniels plans to introduce sales
offices of specialty ingredients in Philippines, Korea, Vietnam,
Indonesia and Thailand. These offices will add to the company's
current teams in Japan, Australia, China and Singapore.
Additionally, the company plans to shift its regional headquarters
to Singapore from Shanghai for a centralized coordination of its
activities and effective management. The relocation of the regional
headquarter coincides with Singapore developing into a hub of its
regional merchandising business.
The company also introduced several management changes in its
Chinese, Australian and South East Asian businesses to enhance
operations, drive positive results and in turn strengthen its
foothold in the region.
Archer Daniels is one of the leading agricultural commodity
exporters to the Asia-Pacific region. The company also markets a
wide assortment of animal feeds, feed premixes and food ingredients
via its extensive sales channel in the region.
The company currently carries a Zacks Rank #3 (Hold). Other
better-ranked stocks in the same sector include
Fresh Del Monte Produce Inc.
Restoration Hardware Holdings, Inc.
). While Fresh Del Monte carries a Zacks Rank #1 (Strong Buy),
Adecoagro and Restoration Hardware carry a Zacks Rank #2 (Buy)
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