ADM Spreads Wings in India - Analyst Blog
07 Setembro 2011 - 9:41AM
Zacks
In a bid to enhance its operational roots and expand its global
footprints, Archer Daniels Midland Company (ADM),
one of the leading food processing companies in the world, has
recently made acquisitions in one of the fastest growing economies
of Asia, India.
Eying to expand its oilseeds origination network in Central
Asia, Archer Daniels has acquired two facilities of Geepee Agri
Private Limited in the western part of India, located in the cities
of Kota and Akola. The facility at its Kota, Rajasthan site has the
capability of processing soy, thus enabling the company to supply
soy oil directly to the northern Indian market. Moreover, the
facility can also crush, refine and package rapeseed.
On the other hand, the Akola facility in Maharashtra is capable
of crushing, refining and packaging soybean while facilitating
Archer Daniels to produce vegetable oil and meal for food and
animal feed markets. Further, the Akola site also owns palm oil
refinery and warehouses for raw and processed materials.
Going with its expansion strategy, Archer Daniels has purchased
the remaining stake in Tinna Oils, which includes a soybean and
sunflower seed processing plant in Latur, Maharashtra, a soybean
and sunseed processing plant in Dharwad, Karnataka and a Port
warehouse in Vishakhapatnam, Andhra Pradesh. Additionally, earlier
this year, the company has also acquired the soybean processing
facilities of Madhur Agro in Nagpur, Maharashtra.
Further, to look after its operations and managing sales,
purchase and administrative activities in India, the company has
also established a headquarter office in Gurgaon, near New Delhi in
the northern state of Haryana.
The recent acquisitions unfolds Archer Daniels' strategic move
to expand its operational activities in the western part of India,
particularly in Maharashtra. Maharashtra is one of largest oilseeds
producing state in India, covering approximately 15% of the total
oilseed production in the nation.
We believe diverse agro climatic conditions suitable for the
cultivation of a wide range of crops, and a progressive farming
community attracts Archer Daniels to expand its operations in that
region.
Further, Maharashtra is one of the country's leaders in food
processing having more than 16,500 small and medium and 322 large
scale food processing units, which make the state a viable location
for expanding operations. Moreover, the state has a huge urban
population with high purchasing power. Maharashtra is a pioneer and
leader in the use of water saving technology and is one of the
major horticulture states in India, having more than 1.3 million
hectare under different fruit crops. The State is the major
exporter of Thompson seedless grapes, Alphonso mangoes, onions and
long stem cut flowers.
Archer Daniels, which competes with Bunge
Limited (BG) and Corn Products International
Inc. (CPO), currently has a Zacks #5 Rank, implying a
short-term 'Strong Sell' rating. Besides, the company retains a
long-term 'Underperform' recommendation.
ARCHER DANIELS (ADM): Free Stock Analysis Report
BUNGE LTD (BG): Free Stock Analysis Report
CORN PROD INTL (CPO): Free Stock Analysis Report
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