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 more than 75% of annual sales. The Andersons also boasts a Plant Nutrient/Turf & Specialty Group, a Retail Group, and a Rail 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 Andersons' main agricultural operations are located in Florida, Iowa, Minnesota, Nebraska, Puerto Rico, Tennessee, Texas, Wisconsin, Ohio, Indiana, Illinois, and Michigan.
The diversified company operates through half a dozen business segments: Grain Group (59% of 2014 sales), Ethanol Group (17%), Plant Nutrient Group (15%), Retail Group (3%), Rail Group (3%), and Turf & Specialty Group (3%). The company is combining its Turf & Specialty and Plant Nutrient groups in 2015.
Its 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 53% 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.
In the first quarter of 2015 the Plant Nutrient Group merged with the Turf & Specialty Group.
Sales and Marketing
The company's net sales declined in 2014 after experiencing steady growth since 2010. In 2014, net sales decreased by 19% due to decreased Grain, Ethanol, and Rail segment sales.
The Grain Group sales and merchandising revenues decreased due to lower commodity prices. Plant Nutrient Group sales and merchandising and service fee revenues declined by 60% as the result of lower ethanol sales. Rail Group sales revenues decreased. driven by a lower auto sales.
The Andersons' net income increased by 22% in 2014 due to decreased cost of sales, increased equity in earnings of affiliates, and other income, partially offset by lower sales.
Equity in earnings of affiliates increased from investments in three unconsolidated ethanol LLCs. Equity in earnings of affiliates also increased due to the continued strong performance of the Lansing Trade Group (LTG) and five months of income from the Thompsons Limited joint venture.
Other income grew due to the gain recognized from the partial share redemption in investment of LTG. Other income also increased due to the settlement of a legal claim during 2014.
Cost of sales and merchandising revenues increased due to the higher volume of sales and merchandising revenues.
The Andersons' net cash used for the operating activities was $10 million in 2014 compared to $337.1 million cash provided in 2013. The primary reason was due to change in accounts receivable, inventories and other accounts payable, and accrued expenses.
The Andersons is looking to profit from macro-economic trends, including world population growth, escalating demand for protein, and increasing North American crop production. Its diverse agribusiness and industrial based activities are all exposed to these trends in one way or another, from handling bulk commodities to using its rail cars and logistics assets to move them.
The company combined its Turf & Specialty and Plant Nutrient groups in 2015 to foster growth and enhance profitability. It plans to grow the lawn and cob business by adding new products and technology, and by seeking out opportunities to acquire new businesses. Indeed, acquisitions in existing and new markets are key to The Andersons' growth strategy.
A focus of the Group in 2015 is to grow the rail fleet and continue to look for opportunities to open new repair facilities and other adjacent businesses. It also anticipates future repair business related to potential mandated modifications in the tank car industry.
In 2015 The Andersons announced the establishment of Maumee Ventures, a venture capital subsidiary of The Andersons designed to foster promising innovations that strategically align with the company’s core businesses
Mergers and Acquisitions
In 2015 The Andersons purchased Kay Flo Industries, Inc. and certain subsidiaries for $125.2 million, including working capital.
Expanding the products and services it provides to the energy industry, in 2014, the Company purchased a fracking sand processing facility in Minnesota for $26.6 million
That year the company purchased Auburn Bean and Grain (six grain and four agronomy assets) for $60.9 million. It also bought two San Antonio-based food grade corn companies: United Grain, LLC; and Keller Grain, Inc.
In 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. That year, The Andersons and partner LTG established a 50:50 joint venture 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, for $152 million. (The Andersons paid $48 million in cash for its share.) By purchasing Thompsons, it established a foothold in Ontario with a similarly diversified agricultural company adjacent to its eastern corn-belt roots.
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' 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 was founded in Maumee, Ohio in 1947.