Sweet sodas and diet desserts alike get their taste from Ingredion's ingredients. The company (formerly Corn Products International) 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 60% of the firm's $6.6 billion in 2013 sales. South America contributes about 21% of sales, followed by the Asia Pacific region (13%), and Europe, the Middle East and Africa (8%).
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 3% decline in 2013. The 2013 decrease was due to a 3% volume reduction and an unfavorable currency translation of 3% (thanks to the strong US dollar), which more than offset improved price/product mix of 3%. Ingredion saw a sales decline in North and South America, offsetting growth in Asia Pacific and EMEA.
The company's net income decreased by 7% to $32 million in 2013 due to decline in revenues partially offset by a drop in operating expenses.
Operating cash flow decreased by $113 million to $619 million in 2013 due to a growth in cash used in accounts receivable and prepaid expenses and accounts payable and accrued liabilities partially offset by lower inventory quantities and raw material costs.
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.
In 2013 the company expanded its infrastructure, opening a new dry-starch production facility at its manufacturing plant in Bedford Park, Illinois, and expanding of its global R&D facility in Bridgewater, New Jersey to help meet increased market demand.
Mergers and Acquisitions
In 2014 Ingredion agreed to acquire 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 is valued at $340 million.
The acquisition of National Starch from the Netherland's Akzo Nobel in 2010 extended the company's reach into Asia -- giving it access to Chinese food businesses -- and added higher-margin processed items, and provided a platform for growth in Europe. The addition of National Starch, gave Ingredion more than 35 manufacturing sites in 15 countries.
The purchase of National Starch also reduced Ingredion's reliance on sweetener products. Besides being a key ingredient in processed foods, starches have a wide range of industrial uses. Ingredion's sweeteners are used as sugar substitutes in everything from soft drinks and beer, to confections and canned foods. Taking advantage of a recent development in artificial-sweeteners, as well as customer demand for lower-calorie products, Ingredion jumped on the stevia bandwagon. It gained the global marketing and distribution rights to a stevia-based sweetener developed by Japanese company, Morita Kagaku Kogyo in 2008. Products made from the stevia plant have been found to be 400 times sweeter than cane sugar. Nutritional supplements containing stevia have a GRAS (generally regarded as safe) status with the USDA and may be used and sold in the US. The Ingredion/Morita sweetener is called Enliten.
The name change from Corn Products International to Ingredion in mid-2012 followed the company's purchase of National Starch and is meant to showcase its role as a global ingredients supplier.