Archer Daniels Midland Co., the world’s largest grain processor, will take a pretax charge of as much as $360 million in its fiscal second quarter after deciding to end a bio-plastics joint venture with Metabolix Inc.
The companies’ alliance will end Feb. 8 because its financial returns are “too uncertain,” Decatur, Illinois-based ADM said in a statement today. ADM will dissolve Telles LLC, created with Metabolix to sell Mirel, a bio-plastic. Metabolix dropped 45 percent to $3.31 at 5:25 p.m. in after-hours trading in New York.
“We have analyzed our business portfolio, identifying areas that are not delivering sufficient results now or are not expected to deliver sufficient results within a reasonable timeframe,” Mark Bemis, president of ADM’s corn unit, said in the statement.
ADM, which trades, transports and processes corn and other agricultural commodities, said yesterday it plans to cut about 1,000 jobs, or about 3 percent of its workforce, to reduce costs. Its announcement came a day after rival trader Cargill Inc. posted an 88 percent drop in fiscal second-quarter profit, citing “challenges” in commodity markets.
ADM has been producing Mirel at its corn-processing plant in Clinton, Iowa, where it has about 90 full-time employees. ADM is deciding the future of the plant, David Weintraub, a company spokesman, said in an interview today.
“We are disappointed by ADM’s decision,” Richard Eno, chief executive officer of Cambridge, Massachusetts-based Metabolix, said in a statement.
“We now have proven the technology at industrial scale and believe that we now have the opportunity to launch this business with a different business model.”