Continuing its push to expand and diversify its product offerings, agricultural commodities giant Archer Daniels Midland (ADM) announced last Wednesday, plans to develop bio-based acrylic acid—a material used in hygiene products including diapers—from corn with LG Chem, Korea’s largest chemical company.
The partnership is the latest in a series of acquisitions and joint ventures by ADM, designed to improve its global footprint. It is also the first partnership to explore hygiene products.
“As customers focus more and more on sustainable alternatives, ADM is looking to continually push the envelope and find new ways to diversify our product mix,” said Chris Cuddy, president of carbohydrate solutions for ADM, in a statement last Wednesday. “We currently produce about 30 different products from a kernel of corn, and we’re eager to explore the possibilities provided through bio-based acrylic acid.”
The majority of ADM’s acquisitions and joint ventures thus far have been focused on expanding the company’s nutrition portfolio to make it “one of the world’s leading nutrition companies,” according to its most recent quarterly filing with the Securities and Exchange Commission. The company, for example, recently partnered with Marfrig Global Foods, a Brazilian company to develop plant-based alternatives to meat, and acquired Neovia, a French animal nutrition company and Florida Chemical Company, which specializes in citrus-based flavors and fragrances.
ADM saw a downturn in its fortunes this year as the prolonged U.S.- China trade war, flooding and weakness in the ethanol industry hit its biggest sources of revenue. The company reported a 41.3 percent decline in adjusted profit for the second quarter of 2019 in August.
But that is not stopping the company from moving forward with its growth strategies, as is evident from its partnership with LG Chem. “Archer Daniels remains focused on investing in expansion and innovation,” said a September report from Zacks Equity Research. “The company continues to enhance its capabilities in Asia, and lead the industry with innovative solutions.”
ADM’s stock closed 1.3 percent higher compared to the previous market session at $40.48 after the news was announced on Monday.