ADM’s Malaysian palm oil venture to restructure

Archer Daniels Midland Co. (ADM) said it could face about US$500 million in charges related to its Malaysian palm-oil venture, adding to headwinds already faced by the company’s renewable-fuel businesses. A global slowdown in agricultural demand nearly wiped out company profits in the fiscal third quarter. ADM reported lower profit across the board in the quarter, which ended March 31, 2009. The company has made a strong push into renewable fuels, investing in ethanol produced in the United States, biodiesel in Europe and, through its stake in Malaysia’s Wilmar Holdings Sdn. A restructuring by Wilmar’s controlling shareholders forced ADM to book a US$97 million deferred-tax charge in the fiscal third quarter, with another US$60 million expected in the fourth quarter. The charges could rise by US$318 million over the next 12 to 18 months, Chief Financial Officer Steven Mills said. But ADM said it planned to continue with plant expansion despite industry oversupply. (May 6, 2009)