DOW JONES NEWSWIRES
Archer Daniels Midland Co. (ADM) said Tuesday it has reached an
agreement with Singapore-based Wilmar International Ltd. (WLMIY,
F34.SG) to expand the companies' existing partnership.
ADM, which owns a 16% stake in Wilmar, said the companies would
extend their partnership to fertilizer, ocean freight and tropical
oil refining in Europe. The two companies, which trade and process
grains and oilseeds, have signed a memorandum of understanding, ADM
executives said at an investor presentation Tuesday afternoon.
ADM's partnership with Wilmar has given it access to the market
in China, where the two companies built a network of
soybean-crushing plants. ADM, based in Decatur, Ill., said the
companies' relationship started in the mid-1990s.
"We have an excellent relationship with Wilmar's leadership, and
we see Wilmar as a key partner, especially in our strategy to serve
growing Asian demand for agricultural products," ADM CEO Patricia
Woertz said.
The companies will now collaborate globally on fertilizer
purchasing and distribution, and they will work to improve ocean
freight fleet management, with both companies contributing two
ships to the effort.
In tropical oils, the companies will work together to better use
plant capacity in Europe, ADM said.
Woertz also told investors that a company job-reduction program,
announced in January, would cut 4% of the company's global work
force, up from an initial estimate of 3%. The company will take a
one-time charge at the upper end of the previously announced range
of $50 million to $75 million, Woertz said.
She added that pre-tax savings from the job cuts would reach
$125 million annually, up from a previous estimate of $100 million,
and that the company would start to realize benefits in the fourth
quarter.
The cuts will make ADM a "much more creative, lean, nimble
organization," Woertz said.
ADM is completing its job cuts in the U.S., which have included
layoffs and early retirements, this week, while other cuts globally
will proceed over the next several months. The number of total job
cuts is expected to exceed 1,200.
-By Ian Berry, Dow Jones Newswires; 312-750-4072;
ian.berry@dowjones.com