Archer daniels midland

1. ARCHER DANIELS
MIDLAND

2.  Archer Daniels Midland (ADM) is an American based Food
production, Agricultural, and Transportation conglomerate founded
in ADM is a global organization with more than 265 processing
plants on six continents, operates in over 75 countries, and employs
more than 30,000 people.
 Much of ADM’s success is due to its extensive vertically integrated
supply chain. The company’s operations are classified into three
business segments: Agricultural services, Oilseeds processing, and
Corn processing

3.  Through their supply chain links, ADM is able to take their source
commodities - corn, oilseeds, wheat, cocoa, palm and sugar - and
immediately transform, transport, distribute, market and sell their
products.
 ADM’s customers are principally other manufacturers and processors
and their products are distributed mainly in bulk from processing
plants or storage facilities directly to customers‘ facilities. Some of the
end products used by businesses and consumers include bio-diesel, oil-
seed mill, Vitamin-E, wheat flour, ethanol, cocoa powder, and renewable
plastics.

4.  Globally, Agricultural services accounts for 47.01% of net sales,
while Oilseeds processing makes up 33.04%, Corn processing
comprises 12.28%, and “Other” (includes processing and financial
activities) makes up the remaining 7.65%.
 The agricultural commodities market is growing both domestically
and internationally. The United States currently accounts for 52.5%
of net sales and other operating income. Europe is responsible for
18.1% and “other foreign countries” make up the remaining 29.3%.

5.  Currently, the United States is ADM’s largest single country
producer of corn, soy, wheat, and oil-seed crushing refineries.
However, ADM has made significant investments in Brazil for oil-
seed and sugar processing and procurement plants.
 Recently, ADM made a significant investment of $100 million in the
Agriculture Bank of China and acquired a 16% stake in Wilmar
International Ltd. to advance its strategic growth plans there (Asia).
 ADM’s 2010 annual report indicates that their business could be
affected by many governmental policies (taxes, subsidies, price
controls), extreme fluctuations of exchange rates, terroristic events,
changes in global demand due to population growth, and extreme
weather events (flooding, drought, etc.).

9.  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, cocoa liquor,
cocoa powder, cocoa butter, chocolate, ethanol, and wheat flour. End
uses are consumption by people, livestock, and additives for fuel.
 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.

10. 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.[8]
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.

11. Agricultural Services
 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.
Other products
 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.

12. Insurance services
 ADM's captive insurance services, which include Agrinational
Insurance Company (Agrinational), provides insurance coverage for
certain property, casualty, marine, credit, and other miscellaneous
risks of the Company and participates in certain third-party
reinsurance arrangements.
 ADM's Crop Risk Services is a managing general agent which sells
and services crop insurance policies to farmers

13. ADM Products & Services
 For more than a century, the people of Archer Daniels Midland
Company (NYSE: ADM) have transformed crops into products that
serve the vital needs of a growing world. Today, we’re one of the
world’s largest agricultural processors and food ingredient providers,
with approximately 40,000 employees serving customers in nearly
200 countries. With a global value chain that includes approximately
450 crop procurement locations, more than 330 food and feed
ingredient manufacturing facilities, 62 innovation centers and the
world’s premier crop transportation network, we connect the harvest
to the home, making products for food, animal feed, industrial and
energy uses.

14. Manufacturing Facility
 ADM’s first propylene glycol plant is designed to manufacture Industrial Grade and USP
Specifications Grade propylene glycol from renewable sources. The plant’s capacity is
100,000 metric tons.
 ADM’s renewable propylene glycol is primarily derived from soybeans and canola. The
company processes soybean or canola seeds through a crushing, dehulling, conditioning,
flaking and extraction operation into a crude vegetable oil. This vegetable oil is further
processed into refined oil. The refined oil is then transformed through a transesterification
process into crude biodiesel and crude glycerin. The crude glycerin is further processed
through several evaporation and distillation steps into a refined, kosher, USP-specification-
grade glycerin. This glycerin is either sold into the market or processed into propylene
glycol. The propylene glycol is further distilled into an industrial-grade or a USP-
specification-grade propylene glycol.
 In addition to manufacturing propylene glycol from glycerin, ADM has the capability to
manufacture propylene glycol from sorbitol, a corn-derived sugar alcohol.

15. Marketing Mix of Archer Daniels Midland
 The marketing-mix model is applied to discuss the Marketing Strategy of Archer
Daniels Midland.
Product
 This Marketing Strategy element reflects the solution to the customers’ needs. Archer
Daniels Midland should develop unique product design, name and features to stand
out in the competitive market. Following factors should be considered to develop the
product strategy- quality, variety, features, packaging, brand name and augmented
services.

16.  This Marketing Strategy element requires an evaluation of the value of products for
targeted customers. The pricing strategy of the Archer Daniels Midland will focus on
setting the list price, credit terms, payment period and discounts.
 Place/distribution
 This Marketing Strategy element requires Archer Daniels Midland to make some
important decisions when developing its distribution plan. It should decide:
 Whether the company wants to make the product available to targeted customer
segments through its channels, or it needs a distribution partner to serve the
customers' needs.
 Whether the distribution will be direct (involving no middlemen), or indirect. If
indirect distribution strategy is adopted, the number of middlemen must be selected
(wholesalers, retailers etc.)
 Whether it is interested in: traditional brick and mortar distribution network, online
distribution or a combination of both. Certain online retailers like Amazon are
available if online distribution strategy is chosen. The company can also develop its
online website to sell the product.

17.  This is one of the most important elements of Archer Daniels Midland Marketing
Strategy. Archer Daniels Midland can blend above and below the line promotional
strategies to achieve its marketing objectives. The above the line promotion
options for Archer Daniels Midland are- television, radio and print advertising.
Below the line promotion options are- catalogues, tradeshows and direct mail
campaigns.

18. Pros
 Global platform. ADM is one of the world’s largest agriculture commodity
companies. It has infrastructure that spans origination, processing and distribution for a
wide variety of commodities, like corn, soybeans, cocoa and wheat.
 With this system, ADM also has an information advantage. This has been a big help for its
trading business
 Innovation. ADM continues to spend large amounts on research & development. And it
has been getting results. For example, the company has developed products like Vegefull,
which has dried edible bean products. It provides a strong source of protein and fiber.
 ADM also has engaged in various partnerships to create new products. One is
with ConocoPhillips (NYSE:COP) to develop renewable transportation biofuels and
biomass.
 Solid financials. In the latest quarter, ADM generated net income of $578
million. There is also nearly $4 billion in the bank. And as for the debt load, it is a
reasonable $6.8 billion.

19. Cons
 Capital investments. ADM’s integrated model requires long-term
commitments. For example, the company builds barge-loading terminals,
elevators, shuttle loaders, plant facilities and so on.
 Costs. ADM is vulnerable to volatile commodities prices. While the firm is adept
at hedging, this is far from foolproof. In some cases, the main problem is actually
getting supply of a key commodity. This may be the result of adverse weather or
even political instability.
 Of course, another major cost is energy. Operating processing plants
requires huge amounts of electricity, natural gas and coal. There are also
large costs for transportation.
 Regulations. ADM must deal with mind-numbing compliance
requirements across the globe. Examples include tariffs, duties, taxes and
import-export restrictions. Perhaps the most important involve the
incentives for ethanol production. In light of the budget problems on
Capitol Hill, there is uncertainty about these programs.

20. Thank You