First Shipment Departs from Archer Daniels' Barcarena Port - Analyst Blog

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Archer Daniels Midland Company ( ADM ) recently announced that the first loaded ship has departed from its new port terminal in Barcarena, Brazil. The shipment departed after receiving final approval from the Brazilian government last month to begin operations at the new terminal.

The Barcarena terminal which was acquired by the agribusiness giant in 2012 is situated at the northern Brazilian state of Para and can handle approximately 1.5 million metric tons of grain annually. Furthermore, the company intends to increase the capacity to 6 million metric tons by 2016.

The new facility will help Archer Daniels to access the country's increasing agricultural outputs especially in the highly productive northern and western regions. Apart from this, the new route will also help the company to save about 34% of freight costs when compared with shipping from Brazil's main port of Santos. Santos port is located at the southern region of Brazil.


We are expecting the company's competitors such as Bunge Ltd. ( BG ), Ingredion Inc. ( INGR ) and ConAgra Foods, Inc. ( CAG ) to follow its footsteps in order to capture the rising opportunity in Brazil. Moreover, it is also expected that the country will set record for yet another year in soybean production.

In 1997, Archer Daniels began its operations in Brazil by purchasing various crushing plants, grain elevators and silos. Currently, with over 4,700 employees in the country, Archer Daniels is a major agribusiness company in Brazil. This Zacks Rank #3 (Hold) company currently operates four soy processing facilities, one cocoa processing unit and one sugar cane processing plant which produces ethanol, along with more than 40 elevators in the country.

We expect Archer Daniels' consistent focus on enhancing processing capabilities and increasing its global footprint will drive growth going forward. The company intends to invest around $1.4 billion in capital projects in 2014, the majority of which will be in high-growth markets outside the U.S.

Archer Daniels Midland is a major global food processing company. It processes oilseeds, corn, wheat, cocoa and other foodstuffs. It is also a giant manufacturer of vegetable oil, protein meal, corn sweeteners, flour, biodiesel, ethanol and other value-added food and feed ingredients. Moreover, the company has a worldwide grain elevator and transportation network for procurement, storage, cleansing and transportation of agricultural commodities.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ADM , INGR , CAG , BG

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