The Andersons earns its daily bread on a mix of grains, trains, and corncobs. The agricultural company's main business -- its Grain and Ethanol segments -- consists of the buying, conditioning, and reselling of corn, soybeans, and wheat, which it acquires from US grain farmers and stores. To support the operation, it uses a system of elevators and terminals located in the Midwest. Its Grain and Ethanol units account for three-fourths of its annual revenue. The Andersons also boasts a Plant Nutrient Group, Retail Group, Rail Group, and Turf & Specialty Group. The agricultural firm operates in the US in 16 states, as well as in Puerto Rico. The company also has rail-leasing interests in Canada and Mexico.
Based in Ohio, the company's main agricultural operations are located in Ohio, Indiana, Illinois, and Michigan.
The Andersons operates through half a dozen business segments: Grain Group (62% of 2012 sales), Plant Nutrient Group (15%), Ethanol Group (14%), Retail Group (4%), Rail Group (3%), and Turf & Specialty Group (2%).
Sales and Marketing
Under the label The Anderson Golf Products, the company sells turf products both directly and through distributors to golf courses and lawn service applicators. As part of its business, the company also makes and sells fertilizer and control products for do-it-yourself application through a variety of channels, including mass merchandisers, small independent retailers, and other lawn fertilizer manufacturers. It also performs contract manufacturing for fertilizer and control products.
Mergers and Acquisitions
Looking to boost its primary business, the company in 2012 acquired 12 grain elevators in northwestern Iowa and western Tennessee from Green Plains Renewable Energy, for more than $133 million. Also, it acquired the assets of Mt. Pulaski Products, adding a pair of mills in Illinois and bolstering its cob supply. The two facilities are operated by The Andersons's Turf & Specialty Group. Additionally, The Andersons in 2012 purchased New Eezy Gro, a manufacturer and wholesale marketer of specialty agricultural nutrients and industrial products with operations in Carey and Sycamore, Ohio.
The Andersons and partner Lansing Trade Group inked a deal in 2013 to acquire Thompsons Limited, a grain and food-grade bean handler and agronomy input provider, based in Blenheim, Ontario, and operating through a dozen locations across the province and in Minnesota. By purchasing Thompsons, The Andersons establishes a foothold in Ontario with a similarly diversified agricultural company adjacent to its eastern corn-belt roots.
In September 2013 the company's Rail Group acquired Kansas City, Missouri-based Mile Rail, LLC, a railcar repair and cleaning company. The purchase expands The Andersons' current railcar repair network both geographically and enables it to repair and clean virtually all types of railcars.
The company's Grain Group is a significant investor in Lansing Trade Group, an established commodity trading, grain handling, and merchandising business with operations nationwide and with global trading/merchandising offices. The Andersons holds an 85% interest in The Andersons Denison Ethanol LLC (TADE), a 50% interest in The Andersons Albion Ethanol LLC (TAAE), and a 38% interest in The Andersons Clymers Ethanol LLC (TACE). Also the company has a 50% stake in The Andersons Marathon Ethanol LLC (TAME) through its majority-owned subsidiary The Andersons Ethanol Investment LLC (TAEI). A third party owns 34% of TAEI.
The Plant Nutrient Group has farm centers located throughout Michigan, Indiana, Ohio, and Florida. The farm centers offer agricultural fertilizer, chemicals, seeds, supplies, and custom fertilizer application. The group also makes liquid anti-icers and deicers for use on roads and runways. The Andersons' Retail Group runs large retail home-center stores that serve the Toledo and Columbus, Ohio, areas. The stores sell home-improvement products, nursery stock, groceries, beverages, and other items.
The company's Rail Group sells, leases, repairs, and reconfigures railcars and locomotives. The group also provides fleet management services and operates a custom steel-fabrication business. The company also owns around a 50% stake in Iowa Northern Railway Company (IANR), a 163-mile short-line railroad, which runs through Iowa from northwest to southeast.
The Turf and Specialty operations of The Andersons purchases, stores, formulates, manufactures and sells dry and liquid fertilizer to dealers and farmers; provides warehousing and services; and distributes seeds and various other farm supplies, such as corncobs that have been shredded into animal bedding, pet litter, and turf materials.
The Andersons has seen steady revenue growth since 2010. In fiscal 2012 the company logged revenue increases of 15% as compared to 2011, thanks to increases across all segments of its business. Its Grain Group posted gains from higher grain prices from corn and soybeans and an increase in bushels shipped (soybeans and wheat). The company's Ethanol Group saw sales increases from rising volume as a result of TADE (purchased in 2012), as the average price per gallon of ethanol sold dropped significantly during the year. Meanwhile, corn oil sales contributed to the significant increase over the prior year. Within the company's Plant Nutrient Group it posted higher sales thanks to an increase in tons sold and a boost in the average price per ton sold for the year. The Andersons also logged a 46% growth rate in Rail Group revenue, attributable to car sales, repairs, and fabrication, as well as an increase in leasing. The company points to more cars in service, higher volume transactions, and favorable lease rates for the gains.
Despite the revenue successes, The Andersons saw profits slip 16% during the same reporting period, due to the rising cost of sales and merchandising revenue; operating, administrative, and general expenses; and the loss attributable to non-controlling interest and decrease in equity in earnings of affiliates.