Archer Daniels to close three mills in anticipation of high-capacity facility in Illinois

By Kristine Sherred contact

- Last updated on GMT

One of ADM's facilities in Mendota, Illinois. Pic: Getty Images/Bloomberg
One of ADM's facilities in Mendota, Illinois. Pic: Getty Images/Bloomberg

Related tags: Archer daniels midland, Adm, mill closures, milling, Flour, Minnesota, Illinois, Trade

The milling company will cease production at flourmills in Minnesota and Kansas, as well as its wheat mill in Chicago, as the capacity is absorbed by a state-of-the-art mill in Mendota.

Archer Daniels Midland (ADM) expects the new site, located about 90 miles west of Chicago, to be fully operational in the second half of 2019.

Chris Cuddy, president of ADM’s carbohydrate solutions business, cited age and demand as the main reasons for the closures of its Minneapolis and Salina, Kansas plants.

“The three facilities we are closing in Minnesota, Kansas and Illinois are all more than a century old, and despite the great work of our teams in each location, the age of those mills significantly constrains our operations,” ​he said.

The growth investment we’ve made in our new Mendota facility will offer the efficiency, variety and flexibility that our customers deserve, and this realignment will ensure both we and our customers harvest the full benefits of that investment.”

The Mendota mill will be capable of grinding soft and hard wheat varieties at a capacity of 30k cwts (about 3.4m pounds or 1.5m kg). Currently, the Salina, Kanas, and Chicago mills put out 29,000 cwts daily.

Moving into the future

ADM Mill / Pic: Getty Images/Bloomberg

“Mendota is one of many important growth investments we’re making in ADM Milling,”​ added Cuddy, noting ADM will continue to operate and modernize a second mill in Minneapolis, Minnesota.

The company also completed a yearlong renovation of its Enid, Oklahoma, mill late last year, which replaced two 1920s-era units with a single, highly automated unit and high-speed packer.

ADM employees 40k people in 200 countries, including milling operations in the US, UK, Canada, the Caribbean and Central America.

Organic expansion

In March, ADM introduced an organic line of flours, including an all-purpose flour and a premium bread flour.

“With this new line, developers can now more easily deliver consistent taste and texture in their baked products and meet the growing organic packaged foods demand driven by label-conscious consumers,” ​said Kevin Like, VP of commercial and sales for ADM Milling.

In its first quarter earnings report, released this week, the century-old company noted the challenges of a winter season impacted by severe weather and flooding in the central US, as well as trade complications with China.

Operating profit in 2018 was $704m, compared to $611m in the same 2019 period. Revenue hit above $15.5m last year but fell to $15.3m this year.

ADM will also make changes elsewhere in the US, converting dry mills in Nebraska, Iowa and Illinois from producing high-fructose corn syrup to ethanol. Its corn wet mill in Marshall, Minnesota, will transition to higher volumes of food and industrial-grade starches as well as liquid feedstocks for food and industrial use.

Related topics: Commodities

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