Wednesday November 28, 3:35 PM EST By Deborah Cohen
CHICAGO (Reuters) - Agribusiness giant Archer Daniels Midland Co. (ADM) sees biofuels such as ethanol and biodiesel as key profit drivers over the next five years and beyond, as laws limiting pollutants in the United States and elsewhere grow stricter, company executives said on Wednesday. Decatur-based ADM has been branching out beyond its mainstay food additives and ingredients such as salad oils and vegetable proteins into more specialized niche products made from primary raw materials soybeans and corn. Biofuels remain one of the strongest growth areas for the company, driven by increased concern over pollutants such as MTBE (methyl tertiary-butyl ether), a gasoline additive that has been known to contaminate ground water. The state of California, for example, plans to eliminate the use of MTBEs soon, and 11 other states have similar legislation pending, said John Rice, who heads ADM's global bioproducts and foods division. "Ethanol is the fuel of the future, and the switch from MTBE because of ground water concerns is really the driving force behind ethanol's growth right now," said Rice, who spoke to Wall Street stock analysts during a Wednesday presentation at ADM's Decatur, Illinois, headquarters. ADM is the leading producer of ethanol, a renewable fuel it manufacturers from corn, with roughly 50 percent of the estimated two- billion-gallon U.S. market. The market is expected to double by the end of 2003, Rice said. DIESEL RESTRICTIONS SPELL MORE ETHANOL DEMAND U.S. legislation restricting the use of sulfur in diesel fuels by 2006 will provide even greater opportunities for ethanol, boosting demand by an estimated 486 million gallons annually, Rice said. Those diesel fuel restrictions will also open doors for biodiesel, another renewable fuel manufactured by ADM from soybeans. Biodiesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a biodiesel blend. ADM is already the leading biodiesel producer in Europe, where big markets such as Germany have been steadily growing. Now the company is preparing to capture the dominant share of the pending U.S. market, executives said. "We think it has significant U.S. potential," said Paul Mulhollem, who heads the company's grain, oilseed processing and cocoa business. "Biodiesel can substitute for sulfur." In addition to expanding ADM's prospects, the use of biodiesel fuel could lead to lower U.S. farm subsidies, Mulhollem said, as its production will increase sales of soybean oil ordinarily wasted as part of the soybean meal crushing process, boosting revenues to soybean farmers. U.S. soyoil stockpiles rose to 2.7 billion pounds in October from 2 billion pounds a year ago, according to U.S. government statistics. ADM shares were up 41 cents at $15.45, a rise of 2.73 percent, in late-afternoon New York Stock Exchange Trading on Wednesday, after touching a year high of $15.53 earlier in the day. ©2001 Reuters Limited. Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Please do NOT send "unsubscribe" messages to the list address. To unsubscribe, send an email to: [EMAIL PROTECTED] Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
