U.S. grain trader Archer Daniels Midland Co said on Wednesday it will seek voluntary early retirements by some North American employees and may eliminate individual jobs as part of a restructuring of specific areas.
The actions are needed to strengthen ADM’s core business and establish the company as a global leader in nutrition, the company said in a statement.
ADM makes money trading, processing and transporting crops, such as corn, soybeans and wheat. It competes against other merchants in the so-called “ABCD” group of traders, which also includes Bunge Ltd, Cargill Inc and Louis Dreyfus Co.
Such companies have been rattled by the trade war between Washington and Beijing, which has reduced shipments of American farm products to China. In recent years, a global glut of crops also hurt agricultural companies and accelerated consolidation in the sector.
The voluntary early retirements are among a range of actions ADM is taking between now and June 30 to improve productivity, growth and service to customers, according to the company.
In response to questions from Reuters, company spokeswoman Jackie Anderson declined to say how many employees were being targeted for retirement.
“Contrary to rumors, we are not considering a sale of our grain handling business,” she said.
ADM expects the number of workers whose jobs are eliminated to be a very small percentage of its global workforce, Anderson said. The company, which had 31,600 full-time employees as of Dec. 31, will try to find other roles for those workers, she said.
Chicago-based ADM said it will be realigning its “organization worldwide as we further streamline and standardize processes, implement new technologies and eliminate overlap in roles and responsibilities.”
The company has been trying to sell two U.S. dry ethanol mills since 2016.
ADM Chief Executive Juan Luciano told Reuters in January the company was pursuing growth in its nutrition business through smaller acquisitions and potential joint ventures in agricultural processing and other areas.
The company’s nutrition unit manufactures, sells and distributes natural flavor ingredients and other specialty products. The segment posted an operating profit of $339 million last year, compared to $546 million for its origination business, which includes grain handling.
ADM last month warned that flooding and severe winter weather in the U.S. Midwest would trim its first-quarter operating profit by $50 million to $60 million.
The company is due to report earnings on April 26.
By Tom Polansek
Source: Reuters
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