Sweet sodas and diet desserts alike get their taste from Ingredion's ingredients. The company makes food ingredients and industrial products from corn and other starch-based raw materials. It serve 60 markets, including food, beverage, brewing, and pharmaceutical companies. More than 40% of sales come from sweeteners, including high-fructose corn syrup, which is used by just about every beverage maker and a good many food companies, to sweeten their products. Ingredion also produces corn starch (a thickener for processed foods), corn oil, and corn gluten (for animal feed). Ingredion operates manufacturing plants throughout Africa, Asia, Europe, and North and South America.
Ingredion has 36 manufacturing plats as well as R&D and sales offices in more than 40 countries. The company serves customers in more than 60 markets in over 100 countries.
North America (Canada, Mexico, and the US) is Ingredion's largest market, accounting for about 55% of the firm's 2014 sales. South America contributes about 21% of sales, followed by the Asia Pacific region (14%), and Europe, the Middle East and Africa (10%).
Ingredion organizes its operations geographically. To this end, its business segments include North America, South America, Asia Pacific, and EMEA.
Sales and Marketing
The company supplies a range of customers, including the food, beverage, brewing, pharmaceutical, paper and corrugated products, textile and personal care industries, as well as the global animal feed and corn oil markets. Ingredion sells its products through its own sales force directly to manufacturers and distributors.
Ingredion reported continuous growth in revenues until 2012 followed by a 3% decline in 2013 and a 10% drop in 2014. The decline for 2014 was highlighted by a decrease in net sales in North America driven by lower raw material costs (primarily corn). South American sales decreased 10% as the company also experienced weaker foreign currencies.
Ingredion experienced net losses in 2013 and 2014. The loss for 2014 was attributed to an impairment charge of $33 million to write-off goodwill at its Southern Cone of South America reporting unit and $2 million in after-tax costs related to a pending acquisition. Cash provided by operations increased 18% in 2014, reflecting improved cash flow associated with working capital activities and an increase in accounts payable and accrued liabilities associated.
Beyond acquisitions, Ingredion is also growing organically, broadening its ingredient portfolio and geographic coverage. Outside North America, the company's second-largest market is South America. To support its growth there, the company is investing up to $100 million to expand its operations in Brazil -- its biggest market in the region. Ingredion currently operates about a half a dozen manufacturing plants and two ingredient development facilities there.
In 2014 Ingredion entered an agreement with Alliance Grain Traders (AGT) to be AGT's distributor of that company's pulse flours, protein and bran ingredients, a move that complements three of Ingredion's growth platforms - wholesome ingredients, texturizers, and nutritional ingredients.
Mergers and Acquisitions
Ingredion in March 2015 acquired Iowa-based Penford Corp., a maker of carbohydrate-based specialty starches used by the paper, packaging, and food industries, for $19 per share in cash. The deal was valued at around $340 million and extended Ingredion's core offerings and geographical footprint; Penford has offices and plants in Colorado, Idaho, Iowa, Pennsylvania, South Carolina, Washington, and Wisconsin.