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The
Chicago-based agribusiness had said on Tuesday that worsening
market conditions were making it difficult to turn a profit
trading grain internationally, leading to the biggest daily
share loss in eight years.
In the global shake up, ADM has revamped its Argentina operation
and closed its South Africa trading desk.
Trade sources told Reuters earlier on Thursday that the company
was preparing to reduce operations in Europe in a bid to boost
profits, but spokeswoman Jackie Anderson said the company would
expand in Europe in 2017 through acquisitions.
"We have no current plans to scale back our European
operations," Anderson said. "Our strategic plan encompasses
growth through acquisition and expansions."
The growth included the acquisition of French sweetener and
starch producer Chamtor, Anderson said.
Anderson said there were no plans to cut operations in the
United Kingdom, Spain, Ireland and back-office operations in
Germany. Trade sources had earlier said those could be cut and
that measures could also include merging or reducing operations
related to former German trading house Alfred C. Toepfer
International.
The firm has completed most of its planned consolidation but
would analyze other offices where cuts made sense, Chief
Executive Officer Juan Luciano said in a conference call on
Tuesday.
Trade sources said there were other areas that could be cut or
merged in Europe - with operations that could be moved to ADM's
European headquarters and international trading desk in Rolle,
Switzerland or its major German hub in Hamburg.
"There will probably be more concentration of operations in
Rolle or in Hamburg if an EU presence is needed," one of the
sources said.
"The group is facing a lot of intense competition from smaller
companies which have an aggressive presence in their markets,
especially the Black Sea."
ADM, one of the world's top grain traders, reported a higher
first-quarter profit this week but said the outlook for its
agricultural services segment appeared weaker than it did at the
beginning of the year.
The firm has exited energy trading and shed personnel in recent
months.
The agricultural services segment's global trading desk suffered
its third quarterly loss in the past five quarters.
The segment, ADM's largest in terms of revenue, is responsible
for buying, selling, storing, shipping and trading grains and
oilseeds.
ADM opened a global trading desk in Switzerland in 2015 to
oversee its supply network. The desk is now trying to reduce the
cost per tonne of materials traded because of lower margins, ADM
said this week.
Record global stocks of commodities such as corn, soybeans and
wheat have thinned margins and limited trading opportunities for
ADM and rivals such as Bunge Ltd <BG.N>, which reported a
sharply lower first-quarter profit this week.
Together with Cargill Inc and Louis Dreyfus Company, the firms
are collectively known as the ABCD and dominate global grain
trading.
ADM's shares fell about 10 percent over the previous two days
before recouping some losses on Thursday, rising over 2.6
percent to $42.40.
(Additional reporting by Nigel Hunt; editing by Veronica Brown,
Philippa Fletcher and Grant McCool)
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