ADM doubles 2014 cost-savings target to $400M

|By:, SA News Editor

Archer Daniels Midland (ADM +0.2%) says it is doubling its cost-cutting target for 2014, aiming for $400M in run-rate savings by year’s end.

ADM reached its earlier year-end goal of $200M in run-rate cost savings more than a half-year ahead of schedule through an emphasis on maintenance, procurement and improvements in energy efficiency and process technology, COO Juan Luciano says.

Based on ADM’s objective of achieving, on average, return on invested capital of 200 bps above its weighted average cost of capital, Luciana says ADM will aim to average a 10% ROIC when the U.S. interest rate environment returns to more normal historical levels.