Archer-Daniels-Midland Co., the world’s largest corn processor, is evaluating bids the company received for three ethanol plants it’s reviewing in the U.S. as part of efforts to improve returns amid weak commodity markets.
“There is a lot of interest,” Chief Executive Officer Juan Luciano said Tuesday on Bloomberg Television from a conference in Buenos Aires. “There is competitive tension.”
The valuations are “very good,” he added. Some of the bids are to create joint ventures and others are for the purchase of the assets, Luciano said. Chicago-based ADM, also the largest U.S. ethanol producer, is examining how the proposed deals could work with its other units, he said.
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ADM’s current ethanol production capacity is about 1.7 billion gallons a year across three dry mills and five wet mills in Nebraska, Iowa, Illinois and Minnesota. Dry mills grind, crush and roll corn to make ethanol fuel and other products. Wet mills steep grain in a water mixture and separate its fiber, gluten and germ for products including ethanol, animal feed, sweeteners, starches and thickeners.
The company said in February it was looking at strategic options for its U.S. dry mills — but not the wet mills, which can make a much wider variety of products — as it tries to boost lagging returns amid a commodity-price rout and expanding global crop supplies.
ADM has produced ethanol since 1978. Like many others in the industry, it expanded production after a 2005 U.S. energy law set mandates for renewable fuel use. It has invested $1.3 billion since 2006 to build two new dry mills.
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