By Karl Plume
CHICAGO (Reuters) -Grains merchant Archer-Daniels-Midland will permanently close its soybean processing plant in Kershaw, South Carolina, later this spring as part of a cost-cutting and consolidation push announced earlier this year, the company confirmed to Reuters on Monday.
ADM has been cutting jobs and downsizing some operations since it announced in February that it planned to cut costs by $500 million to $700 million over three to five years.
"After exploring a wide variety of alternatives, we’ve determined that our Kershaw crush plant no longer aligns with our future operational needs," ADM spokesperson Dane Lisser said.
The company, still reeling from an accounting scandal last year that sent its stock price tumbling, is now facing stiff headwinds amid rising trade tensions between the United States and key markets including top soybean importer China.
The Kershaw plant will be the first U.S. soybean processing plant to close following a multi-year, industry-wide expansion amid soaring vegetable oil demand from biofuels makers, according to industry sources.
But the biofuel sector has more recently been throttling back production due to U.S. biofuels policy uncertainty and the potential for a worsening trade war.
The Kershaw plant is the smallest of more than a dozen dedicated soy processing facilities operated by ADM in the United States, with the capacity to crush 50,000 bushels a day, according to industry sources.
ADM said it will help Kershaw employees find new jobs and provide financial severance for those that elect to leave the company, but did not disclose the number of workers impacted.
The Kershaw plant employed between 11 and 50 workers, according to South Carolina Department of Commerce data.