CHICAGO — ADM expects 2024 to be a more challenging year than either 2022 or 2023, with tailwinds that supported a portion of the company’s performance over the past few years changing direction, said Juan Luciano, chairman and chief executive officer.

To continue building a stronger company for the future Luciano and the leadership team at ADM have identified three key priorities for 2024: managing the cycle, nutritional recovery and enhanced return of cash to shareholders.

“Our destination marketing efforts continue to bring us closer to our customers and enable us to serve them in a differentiated capacity, and we continue to expand,” Luciano said during a March 12 presentation in connection with fiscal 2023 financial results. “In 2023, we added three new offices across Asia and the Middle East, and in 2024, we plan to add two to four more. Through this ongoing expansion, we expect to achieve 6% growth in our destination marketing volumes. Direct farmer buying has been steadily increasing over the past several years and provides ADM an opportunity to maximize value for both sides by creating efficiencies through working directly together.”

Luciano said ADM plans to take these efforts even further in 2024 by leveraging its network of more than 200,000 farmer relationships to grow direct origination volumes year-over-year by about 10%. He also said the company continues to build capacity to serve growing customer demand, pointing to the opening of its Green Bison soy processing facility and expansion of its Marshall, Minn., starch facility as recent examples of progress.

Additionally, ADM has commissioned more than 300 projects and expects to see $500 million in traceable cost savings over the next two years across all aspects of its business, from operations to supply chain to corporate costs, Luciano said.

Nutrition recovery is a second priority for ADM in 2024. Coming off a difficult year with results well below expectations, Luciano said ADM has been working “aggressively” to change this and return to growth.

“We’re already taking action on the areas we can improve,” Luciano said. “Many of the supply issues are the result of the complexity built into the Nutrition business over time. In our zeal to meet our customers’ needs, we have created one of the strongest pantries in the industry. This added complexity in our operations and supply chain that at times impacted our ability to efficiently fulfill demand. To address this, we have made important changes to drive simplification across the Nutrition business that will ease the pressure on our overall supply chain and dramatically improve our demand fulfillment performance. First, we have created a stronger division of duty across operations leadership and added new leaders with a strong expertise in supply chain management. We have also taken steps to build our COE expertise back into the core business, helping make our overall supply chain capabilities more agile and responsive to commercial demand signals.

“We have also engaged third-party experts to help identify further opportunities for operational excellence improvements across our largest facilities. We have also greatly simplified the product and production landscape to further achieve operational and supply efficiency, reducing the brands we are presenting to customers by two-thirds and downsizing about 17% of our SKUs, alongside the strategic production line simplification. A recent example of this is the closure of more than 20 Animal Nutrition production lines in 2023, now better serving the product mix and supply chain efficiency of the business.”

Luciano said ADM also is taking steps to optimize its Nutrition business portfolio, noting the company is leveraging its experience in both large-scale and bolt-on acquisitions to enhance its approach to M&A integration to increase value creation.

“We continue to assess our portfolio for strategic fit, making surgical decisions to achieve the returns target we expect,” he said.