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ADM to Invest $2.3 Billion Before 2009 to Expand Production of Biofuels and Plastics

Archer Daniels Midland (ADM) plans to invest about $2.3 billion before 2009 to expand its capacity for the production of ethanol and other biofuels and on the development of PHA (polyhydroxyalkanoate, a biodegradebable plastic made from plant sugar), according to Allen Andreas, the CEO.

Speaking at the Consumer Analyst Group of New York (CAGNY) 2006 Conference in Scottsdale, Arizona, Andreas said that the board of ADM, the largest producer of ethanol, had approved a series of projects that would add an extra 500 million gallons per year to the company’s current 1.2-billion gallon capacity.

After President Bush’s State of the Union address in which he pushed for ethanol, ADM re-examined its expansion plans.

We reviewed our capex programmes and our production levels and what was happening to the business and decided there was a place for us with additional capacity. It’s added quite substantially to our capex requirements in the coming couple of years but we’ve got adequate cashflows to meet that.

—Allen Andreas

ADM is planning to build an ethanol plant in Nebraska, biofuels plants in Hamburg and Mainz and a biodiesel plant in Asia. ADM is aggressively diversifying away from the grain processing business, and diving into biofuels.

With energy prices where they are and enough volatility in the supply of petroleum around the world… it’s likely we’re going to see a lot higher energy costs. That gives us a lot of options as to what to do with our starch, using carbohydrates to replace products that are currently made from hydrocarbons.

Comments

tom deplume

Could this mean that ADM will ferment all that unneccesary corn syrup the put in nearly every consumer product they sell.

William R Carson

Is the reaction endo or exothermic? The plastic capillaries look quite fragile

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