CAGNY: ADM chief executive outlines benefits of job cuts
Archer Daniels Midland chairman and CEO Patricia Woertz has claimed the US agribusiness giant's decision to cut over 1,000 jobs worldwide will create a more "creative" organisation.
ADM, which supplies crops like cocoa and food ingredients such as yeast to manufacturers, yesterday (21 February) revealed it will cut 1,200 jobs, up from the 1,000 it announced last month.
The increase in jobs to be lost emerged after the completion of ADM's voluntary retirement programme and also includes cuts from recently-announced plant closures in the US, Woertz said.
Speaking at the Consumer Analyst Group of New York investment conference in Florida, Woertz said the reductions would benefit ADM.
"We will see a much more creative, lean, nimble organisation, fewer management levels," Woertz said. "There will also be a larger span of control by our management team. We will be more efficient and focused on results that matter, results that drive shareholder value."
ADM will incur charges at the "top end" of the $50-75m it had announced, although Woertz said the cuts will save the company over $125m a year.
Last month, ADM reported a fall in half-year profits despite higher sales. ADM said the slide in earnings was due to "weak" oilseeds margins, "lower" results from corn and "poor" international merchandising results.
Oilseeds accounts for 38% of ADM's annual profits. Woertz said the company would look to increase the capacity of its oilseeds business in South America and Eastern Europe but look for opportunities to "rationalise" assets in North America.
ADM plans to grow its oilseeds business in China as part of its partnership with agribusiness group Wilmar International, in which the US firm owns a 16% stake.
Yesterday, ADM and Wilmar signed an MOU to work together on purchasing and distributing fertilizer worldwide, on ocean freight and refining tropical oils in Europe.
Woertz said ADM expected "over time" that the partnership could grow and move into other sectors.
A US court has ruled agribusiness giants Archer Daniels Midland and Cargill must answer allegations of false advertising for high fructose corn syrup (HFCS)....
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