ADM Launches Flavor Production Plant in China to Meet Growing Demand By Reuters

© Reuters. FILE PHOTO: The Archer Daniels Midland Co. (ADM) logo is displayed on a display on the floors of the New York Stock Exchange (NYSE) in New York, United States, May 3, 2018. REUTERS / Brendan McDermid / File Photo

(Corrected to remove superfluous words from 4th paragraph)

BEIJING (Reuters) – U.S. grain merchant Archer-Daniels-Midland Co said on Wednesday it has launched a new flavoring plant in China to meet growing demand for healthy food and drinks.

The new facility – ADM Food Technology (Pinghu) Co Ltd, located in the eastern province of Zhejiang and about an hour from Shanghai – marks a further expansion of the global grain trader in the nutrition segment.

Nutrition is one of ADM’s top three businesses, and the company aims to increase the segment’s contribution to overall net profits to more than a quarter over the next three to five years, from around 15% currently, Leo Liu , president, Nutrition, Asia-Pacific, ADM, told Reuters.

Regarding the Pinghu factory, Liu said that it will serve as ADM’s new aroma supply hub for China and the wider Asia-Pacific region, adding that it will also be part of the chain of aromas. ADM’s global supply of flavors, serving customers based in Europe and America.

“The reason we have invested in flavors and food ingredients, especially premium food ingredients, is that the industry is growing very quickly. And the demand and changes in the market force us to have investment and production bases in China, to better prepare for future development, ”said Liu.

The new plant will provide a wide range of flavor solutions for beverages, sugary products, dairy and dairy alternatives, as well as functional and health-related foods, ADM said in a statement.

The launch comes after ADM opened its herbal innovation lab in Singapore in April to meet the growing demand for plant-based proteins in the region.

ADM, a large global trading house that buys crops from farmers for processing and exporting, reported a 52% jump in quarterly profits in July, due to strong export sales of corn to China and oilseed crushing.

Nutrition saw revenue growth of 15% and higher profits of 27% year-on-year in the second quarter.

Chairman and CEO Juan Luciano said at the time that the company was increasing its expectations for full-year profit growth for the nutrition segment to 20%.

ADM is also stepping up its investments in the plant protein sector in China, including performing application experiments, developing products and building ingredient production bases, Liu said.

Investment in the nutrition sector, including health-related and functional ingredients, will be a key area for the company’s development in the region, Liu added.

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