ADM to End Commercial Alliance with Metabolix
January 12 2012 - 4:33PM
Business Wire
Archer Daniels Midland Company (NYSE: ADM) announced today that
ADM Polymer Corporation, a wholly owned subsidiary of ADM, will end
its commercial alliance with Metabolix, Inc. on February 8, 2012.
As a result of this decision, Telles LLC, the sales and marketing
commercial alliance created to commercialize Mirel™, a biobased
plastic, will be dissolved, and Mirel production on behalf of
Telles will end. Under the terms of their commercial alliance, ADM
Polymer Corporation may provide PHA fermentation services for
Metabolix during a three-year period following termination.
“We have analyzed our business portfolio, identifying areas that
are not delivering sufficient results now or are not expected to
deliver sufficient results within a reasonable timeframe,” said
Mark Bemis, president, Corn. “We have had a good working
relationship with Metabolix, and the fermentation technology
performed well at our facility. Unfortunately, uncertainty around
projected capital and production costs, combined with the rate of
market adoption, led to projected financial returns for ADM that
are too uncertain. Therefore, we have decided to exit the business
as permitted by the commercial alliance agreement with
Metabolix.”
ADM Polymer has been producing Mirel at ADM’s integrated corn
processing complex facility in Clinton, Iowa. There are currently
approximately 90 full-time ADM Polymer employees at the Clinton
polymer plant; in addition, there are a small number of ADM
employees supporting the Telles sales and marketing efforts in
Europe. ADM is currently evaluating the impact on staffing, and
will make decisions on its needs as quickly as possible. For
colleagues whose positions are affected, the company will offer
severance packages, including outplacement services, and there may
be opportunities for them to apply for positions at Clinton or
other ADM facilities.
As a result of the change in circumstances and its decision to
terminate the commercial alliance, ADM is evaluating other
commercially viable uses for the fermentation assets in Clinton,
but has not yet made any firm decision on alternative uses. As a
result, ADM will record a one-time pretax charge in its second
quarter of between $300 million and $360 million, primarily for
impairment of the related production assets. ADM anticipates the
cash portion of the total charge to be less than $5 million.
About ADM
For more than a century, the people of Archer Daniels Midland
Company (NYSE: ADM) have transformed crops into products that serve
vital needs. Today, 30,000 ADM employees around the globe convert
oilseeds, corn, wheat and cocoa into products for food, animal
feed, industrial and energy uses. With more than 265 processing
plants, 400 crop procurement facilities, and the world’s premier
crop transportation network, ADM helps connect the harvest to the
home in more than 160 countries. For more information about ADM and
its products, visit www.adm.com.
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