ADM and LG Chem: Strategic Decisions on Lactic Acid Projects

Market Demand and Applications

ADM is aligning its organization to meet market demand for lactic acid by enhancing speed and responsiveness, leveraging regenerative agriculture practices, and collaborating on sustainable products. The company is also expanding its regenerative agriculture programs and exploring emerging technologies to drive future demand.

"To increase speed, agility, and responsiveness to customer needs while delivering more wins across each market segment, we have fine-tuned our go-to-market and COE organizations to best align to demand." --- (ADM, earning call, 2024/Q1)

"Our own research shows that a significant majority of consumers would be more likely to trust and purchase from retailers and brands that implement regenerative agriculture practices, and by coming together with great partners like Bayer, we're helping farmers – who are at the heart of our business – meet that demand." --- (ADM, press release, 2024/06/13)

"28 Sept 2023, In order to help meet the rapidly increasing demand for biofuels and other sustainably sourced products, ADM (NYSE:ADM), a global leader in nutrition and agricultural origination and processing, and Syngenta Group, one of the largest agricultural technology companies in the world, have signed a memorandum of understanding (MoU) to collaborate in scaling research and commercialization of low carbon-intensity next-generation oilseeds and improved varieties." --- (ADM, press release, 2024/04/05)

"Driven by increasing demand for sustainable resource feedstocks and solutions, we are announcing today that we're not only exceeded our 2023 goal of 2 million acres in our regenerative ag programs, we have also increased our 2025 acreage goal from 4 million to 5 million acres." --- (ADM, earning call, 2024/Q1)

"And there's a lot of exciting stuff that the industry is doing. Listen, there is a lot of emerging technologies, novel ingredients and new culinary techniques that will come to revitalize that demand over time, but that's a shift that we're going through and you're not going to see that in 2024." --- (ADM, earning call, 2024/Q1)

Sustainability Goals and Environmental Impact

ADM's sustainability goals focus on reducing greenhouse gases, accelerating regenerative agriculture, and protecting biodiversity. Their initiatives include detailed GHG reduction objectives, soil analysis for carbon sequestration, and promoting sustainable agricultural practices, all aimed at minimizing environmental impact and advancing sustainable development.

"With the goals of awarding ingenuity and fostering innovation, Fast Company draws attention to ideas with great potential and helps them expand their reach to inspire more people to work on solving the problems that affect us all." --- (ADM, press release, 2024/05/21)

"However, while this is going on, ADM is moving forward, recently detailing its environmental efforts in reducing greenhouse gases (GHGs), accelerating regenerative agriculture, and other accomplishments in its 2023 Corporate Sustainability Report." --- (ADM, press release, 2024/05/17)

"ADM recently announced details for its objectives of greenhouse gas (GHG) reductions, regenerative agriculture and no-conversion commitment through its 2023 Corporate Sustainability Report, detailing activities spanning three core focus areas of feeding the world, protecting nature and enriching lives." --- (ADM, press release, 2024/05/30)

"ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Environmental and Social Responsibility The Company’s policy to protect forests, biodiversity, and communities includes provisions that promote conservation of water resources and biodiversity in agricultural landscapes, promote solutions to reduce climate change and greenhouse gas emissions, and support agriculture as a means to advance sustainable development by reducing poverty and increasing food security." --- (ADM, sec filing, 2024/Q1)

"Primary data collection for greenhouse gas emission calculations and soil analysis with carbon sequestration measurement allowed the growers, ADM and Bayer to gain valuable insight into current environmental impacts and potential emission reduction opportunities as the program expands." --- (ADM, press release, 2024/06/13)

Financial Performance and Investment

ADM's financial performance is measured using key metrics like net earnings, adjusted EPS, and EBITDA. Capital expenditures are aligned with depreciation, focusing on asset modernization. Adjusted ROIC is emphasized for comparability. Forward-looking statements reflect management's economic and industry outlook. Interest and investment income decreased due to valuation losses in alternative protein investments.

"ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The Company measures its performance using key financial metrics including net earnings, adjusted earnings per share (EPS), gross margins, segment operating profit, adjusted segment operating profit, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA, return on invested capital, economic value added, and operating cash flows before working capital." --- (ADM, sec filing, 2024/Q1)

"We still anticipate capital expenditures will be held at a level aligned with depreciation and amortization, focused largely on investments to secure reliability of asset performance through modernization and digitization efforts." --- (ADM, earning call, 2024/Q1)

"Management believes Adjusted ROIC is a useful financial measure because it provides investors information about ADM's returns excluding the impacts of specified items and increases period-to-period comparability of underlying business performance." --- (ADM, press release, 2024/04/30)

"Some of our comments and materials may constitute forward-looking statements that reflect management's current views and estimates of future economic circumstances, industry conditions, company performance, and financial results." --- (ADM, earning call, 2024/Q1)

"Interest and investment income decreased $11 million to $123 million due primarily to a valuation loss related to an investment in alternative protein and precision fermentation, partially offset by higher interest income driven by higher interest rates." --- (ADM, sec filing, 2024/Q1)