The agri-business giant, Archer Daniels Midland Company (ADM), ended its search for a suitable site to establish its new information technology (IT) and support center by zeroing in on a space within the campus of its WILD Flavors offices in Erlanger, Kentucky.
The new center, which is slated to open in the second half of 2015, will not only ensure full support for the company’s growing business by providing appropriate IT support and infrastructure but also open new avenues for employment in Erlanger.
Among the prime reasons for selecting this site and co-locating it with the WILD Flavors’ Erlanger offices is the advantage of lowered costs due to the use on an existing and owned building space as well as the synergies of tax incentives tendered by the commonwealth. Other advantages of this site include the availability of skilled workforce in the region along with quick and easy access to a major airport.
Initially, the new IT and support center is expected to house about 100 contractors and Archer Daniels colleagues. However, the company plans to eventually expand workforce to nearly 200 Archer Daniels colleagues with newly created positions that will ultimately contribute toward the expansion of its global IT support and infrastructure. Some of the new positions to be recruited at the Erlanger center include project managers, business analysts and solution integrators.
In relation to the tax benefits, the company revealed that the Kentucky Economic Development Finance Authority (:KEDFA) has approved preliminary tax incentives of up to $5 million under the Kentucky Business Investment program. The guidelines to qualify for the incentives are to recruit profoundly for the newly created positions at its new Kentucky center. Additioanlly, the KEDFA has also approved tax benefits of nearly $200,000 for Archer Daniels under the Kentucky Enterprise Initiative Act.
Further, the company indicated that it will continue to operate its existing IT center in its North American headquarters in Decatur, IL, and continue to provide IT services from various other locations across North and South America, Europe and Asia.
Archer Daniels, which competes with Bunge Ltd (BG), Limoneira Co. (LMNR) and The Andersons Inc. (ANDE), has lately been focused on the expansion of its business and has been working toward making the necessary additions to its infrastructure to facilitate global growth. In one such endeavor to expand its footprint and enhance customer services the company decided to move its global headquarters and customer center to Chicago in December last year. Earlier, the center was located at its company headquarters in Decatur, IL. However, the company retained Decatur as its North American headquarters.
We believe this Zacks Rank #3 (Hold) company is keen on maintaining its balanced capital allocation structure, improving returns and augmenting economic value added (“EVA”), as evident from the host of strategies it announced recently.
Apart from enhancing its dividend payout ratio, the company remains on track to develop its core business through improved product mix, efficient portfolio management and increased marketing. It also aims to boost operational efficacies by achieving technological leverage, which is likely to enrich productivity. Lastly, the company intends to remain committed to strategic expansion and innovations.
With all these actions underway, Archer Daniels will most likely be well placed in this competitive industry to utilize all possible opportunities arising with changing trends in order to drive further growth and achieve its balanced capital allocation goal.
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