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About The Andersons Inc

Agribusiness giant The Andersons operates in a variety of areas, including trade, ethanol, and plant nutrients and rail. It generates about half its sales from grain trading — primarily corn, soybeans, and wheat — via grain elevators located in the midwestern US. The company purchases and sells ethanol, offers facility operations, risk management, and ethanol and corn oil marketing services to the ethanol plants it invests in and operates. The Anderson's Plant Nutrient Group makes and sells fertilizers, crop protection chemicals, and related products, and the company leases, repairs, and sells railcars, locomotives, and barges through its Rail Group. It operates primarily in the US where nearly 80% of the company's total revenue is generated from.

Operations

The Andersons operates through four business segments: Trade Group (nearly 80% of sales), Ethanol Group (more than 10%) Plant Nutrient Group (nearly 10%), and Rail Group (generates the remaining).

It operates grain elevators and ethanol plants in Ohio, Indiana, Michigan, and other US states through which customers buy and sell grain — primarily corn, soybeans, and wheat — and ethanol. The company also provides customers with marketing, operations support, and other services related to its grain and ethanol businesses.

The Andersons also sells a host of lawn, plant, and crop care products such as liquid and pelleted fertilizers and golf course and turf applications as well as corncob-based animal bedding and cat litter materials. In addition, it leases, repairs, and sells new and used boxcars, gondolas, tank cars, locomotives, and barges and offers fleet management services.

Geographic Reach

Based in Ohio, The Andersons' agricultural and Ethanol operations are spread across some 15 US states as well as Puerto Rico and Canada. Its railcar operations, which include about two dozen repair facilities and a fabrication shop, are primarily in the southern, western, and midwestern US. The US generates about 80% of the company's total sales.

Sales and Marketing

The Andersons distributes its products through its distributors and retailers. Most of the company's exported commodity sales are made through intermediaries while some commodities are shipped directly to foreign countries, mainly Canada. The company ships grain from its facilities by rail, truck, or boat. Rail shipments are made primarily to grain processors and feeders with some rail shipments made to exporters on the Gulf of Mexico or east coast. Boat shipments are from the Port of Toledo or the Port of Houston. In addition, commodities are transported via truck for direct ship transactions in which producers sell grain to the Company, but delivered directly to the end user.

The Company does not have any customers who represent 10%, or more, of total revenues.

Advertising expense of $2.5 million in 2019, $1.9 million in 2018 and $2.5 million in 2017, respectively.

Financial Performance

After a rise in revenue in 2015, it slid down for three consecutive years until a sudden surge in 2019. Net income fluctuated for the same period.

In 2019, the company reported revenue of $8.2 billion, a jump of 168% from the prior year. The change was a result of huge increases in sales of the trade segment.

Net income slid down 56% that year to $18.3 million as operating, administrative and general expenses increased 69% from previous year.

Cash at the end of 2019 was $54.9 million, an increase of $32.3 million from the prior year. Cash provided by operations was $348.6 million, while investing activities used $325 million, mainly for acquisitions and purchase of assets. Financing activities added $8.7 million to the coffers.

Strategy

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.

To capitalize on some of those trends, the company is focused on growing its food ingredients and specialty grains business within the Grain Group while revamping the division with divestitures (four grain elevators in Tennessee) and acquisitions (Lansing Trade Group and its Canadian joint venture with Lansing, Thompsons Limited). It expects to achieve some $10 million in productivity synergies from the Lansing purchase by the end of 2020.

The company continuously look for opportunities to enhance its existing businesses through strategic acquisitions, and trade group will focus on growth of originations, risk management services and the food ingredient business while monitoring macroeconomic events which could cause more volatility in the market.

Mergers and Acquisitions

In 2019, The Andersons took full ownership of Kansas-based, Lansing Trade Group (it previously owned nearly a third) for some $324 million. The purchase, which will be merged into the Grain Group to create The Andersons Trade Group, enhances the company's position in the broader US agricultural marketplace.

 

Company Background

The Andersons grain terminal was founded in Maumee, Ohio in 1947. It expanded into other areas of agriculture (fertilizer blending, ear corn and cob milling, lawn products) over the next two decades. 

The company goes public in 1996, the same decade sales reach $1 billion. The Andersons enters the ethanol business the following decade.

The Andersons Inc

1947 Briarfield Blvd
Maumee, OH 43537-1690
Phone: 1 (419) 893-5050

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: ANDE
Stock Exchange: , NASDAQ
Chairman: Michael J. Anderson
President and CEO: Patrick E. Bowe
CFO: John J. Granato
Employees (This Location): 150
Employees (All Locations): 2,320

Major Office Locations

Maumee, OH

Other Locations

San Diego, CA
Woodland, CA
Immokalee, FL
Lake Placid, FL
Manly, IA
Milford, IA
Champaign, IL
Mansfield, IL
Delphi, IN
Dunkirk, IN
Galveston, IN
Indianapolis, IN
Logansport, IN
North Manchester, IN
Oakville, IN
Waterloo, IN
Albion, MI
Hemlock, MI
Jonesville, MI
Litchfield, MI
Oakley, MI
Standish, MI
Webberville, MI
White Pigeon, MI
Kansas City, MO
Bay Saint Louis, MS
Mocksville, NC
Fairmont, NE
Gibbon, NE
Kearney, NE
Paxton, NE
North Las Vegas, NV
Bowling Green, OH
Carey, OH
Columbus, OH
Fostoria, OH
Fremont, OH
Gibsonburg, OH
Greenville, OH
Maumee, OH
Metamora, OH
Sylvania, OH
Toledo, OH
Warren, OH
Darlington, SC
Paris, TN
Union City, TN
West Haven, UT
Arena, WI