Archer Daniels Midland 2007 Annual Report Download - page 15

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7
Item 1. BUSINESS (Continued)
Status of New Products
The Company continues to expand its business in line with the Company’s strategy to be a world leader in
BioEnergy whilst maintaining its premier position in the agricultural processing value chain through the
development of new products.
The Company’s researchers have developed a number of custom low trans fats and oils for bakery and quick-
service restaurants that utilize the Company’s Novalipid portfolio of low trans fats and oils. These products meet
the growing needs of food service customers driven by legislated municipal bans on the use of fats and oils that
contain trans fats.
Our Aspire business model continues to be developed to leverage the Company’s finished food product
development capabilities. Under this program, ADM works with customers to supply finished food products such
as nutrition bars, beverages and other items in a final packaged form ready for retail distribution. The development
of the prototypes is done by research and development staff and the manufacturing is accomplished through a
network of co-manufacturers. This program helps customers introduce more new trait-enhanced products more
quickly than they would otherwise be able to accomplish.
The Company’s cooked, dried edible bean products are finding a number of new applications due to the increased
interest among our customers in improving nutrition, especially in the area of foods targeted for children. These
edible bean powders are being used in a wide range of convenient foods.
The Company’s alliance with Metabolix is proceeding on schedule. Semi-works production of PHA, a
biodegradable plastic, is underway for market development, and construction of the Company’s 50,000 ton per
year commercial manufacturing facility is on schedule for startup in December 2008.
The Company is proceeding with construction of a commercial propylene glycol (PG) facility in Decatur,
Illinois. Value-added derivatives of PG are being pursued by research and development staff.
Source and Availability of Raw Materials
Substantially all of the Company’s raw materials are agricultural commodities. In any single year, the
availability and price of these commodities are subject to unpredictable factors such as weather, plantings,
government (domestic and foreign) farm programs and policies, changes in global demand created by population
growth and changes in standards of living, and global production of similar and competitive crops. The
substantial majority of the Company’s raw materials are procured from thousands of grain elevators and
wholesale merchants, principally in North America, South America, and Europe, pursuant to short-term
agreements (less than one year) or on a spot basis. The Company does not grow crops and a relatively small
proportion of the Company’s raw materials are purchased directly from growers. The Company is not dependent
upon any particular grower, elevator, or merchant or group of growers, elevators, or merchants as a source for its
raw materials.
Patents, Trademarks, and Licenses
The Company owns several valuable patents, trademarks, and licenses but does not consider any segment of its
business dependent upon any single or group of patents, trademarks or licenses.