U.S. grain merchant ADM opens new facility in China

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U.S. grain merchant ADM opens new facility in China

BEIJING Reuters - U.S. grain merchant Archer-Daniels - Midland Co said on Wednesday that it has launched a new flavour production facility in China to meet growing demand for beverages and healthy foods.

The new facility - ADM Food Technology Pinghu Co Ltd, located in the eastern province of Zhejiang and about one hour to Shanghai - marks a further expansion by the global grains trader in the nutrition segment.

Nutrition is one of ADM's three main businesses and the company aims to increase the segment's contribution to total net profit to more than a quarter in the next three to five years, from about 15% currently, told Leo Liu, President, Nutrition, Asia-Pacific, ADM.

In the plant of Liu, Liu said it would serve as ADM's new flavour supply hub for China and the wider Asia-Pacific region, adding that it will also be part of ADM's global flavours supply chain, with clients based in Europe and Americas.

The reason why we invested in flavours and food ingredients, especially high-end food ingredients, is because the sector is developing very fast. The new plant will provide a wide variety of flavour solutions for beverages, sweet goods, dairy alternatives, and healthy and functional foods, ADM said in a statement.

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

ADM, a top global trading house that buys crops to sell and process to farmers in July, reported a 52% hike in its quarterly profit in July due to strong corn export sales to China and oilseed crushing.

Nutrition delivered 15% revenue growth and 27% higher year-over-year profits in the second quarter.

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

ADM is also stepping up investment in the plant-based protein sector in China, including carrying out application experiments, developing products and building ingredients production bases, Liu said.

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