The Andersons remain firmly in their position despite obstacles.
According to Patrick E. Bowe, president and chief executive officer, The Andersons, Inc., Maumee, is well-positioned to weather challenges shaking the country, even as the company grapples with a hard environment in its ethanol sector.
Mr. Bowe stated that those in the agricultural industry should consider themselves fortunate, considering the current state of disruption in many US industries.
He declared, “We have good debt capacity and a strong balance sheet at The Andersons.” “We’re able to absorb short-term setbacks. We consider ourselves fortunate in light of numerous other sectors of the economy. The US ag supply chain will continue to benefit from our efforts, as the ag sector is still robust. We strive to be quick-thinking and creative in order to serve clients, and we’re honored to be a part of it. Supply chains have not experienced any disruptions, and we do not anticipate any.
The Andersons’ production facilities are all exempt from working limits under the “essential business” exemption. Grain elevators and processing facilities, among other facilities, are still in operation even though office workers are working remotely from home.
The most important thing, he said, is to make sure we are doing it safely, with adequate cleanliness and social separation. “The good news is that our facilities are primarily located in rural areas and require little labor force.”
Nevertheless, a lot of adjustments have been made to improve sanitation, such as keeping social distance and closing break rooms. One of these is having truck drivers fill out paperwork from within their vehicles while loading and unloading cargo at The Andersons’ facilities.
“At this point, truckers don’t leave their cabins,” Mr. Bowe stated. They used to visit us for popcorn and to have conversations with our operators. The security and welfare of our coworkers is our top priority.
According to Mr. Bowe, the sector as a whole has a broad sense of benevolence, which has helped The Andersons manage swiftly shifting conditions amid the pandemic.
He stated, “It’s been the case for our customers in feed, ethanol, soybean processing, flour milling, and everyone else.” It’s been a pleasure working with and supporting each other’s needs. When times are hard, everyone helps out.
The Andersons’ four main business areas have all been impacted by the coronavirus epidemic, but ethanol has been the most severely and directly.
The Andersons announced on March 24 that four plants owned by The Andersons Marathon Holdings LLC (TAMH), a joint venture between The Andersons and Marathon Petroleum Corp., will have their regular spring maintenance and repair periods extended this year.
According to the firm, its output of ethanol and coproducts in April is anticipated to be almost 50% lower than usual. The business stated that production will return to more typical levels “when demand improves.”
This has to do with gasoline demand, which the epidemic is expected to reduce by 40% to 50%, according to Mr. Bowe.
According to him, ethanol has been running on narrow margins for a while.
He continued, “And our ethanol facilities are some of the top operating plants in the industry,” noting that the ethanol market’s circumstances have been made worse by a sharp decline in the price of crude oil.
According to Mr. Bowe, The Andersons has been contributing to the communities in which it works during the pandemic. The corporation has looked for methods to give back wherever it has facilities, in addition to giving money to the United Way of Greater Toledo for lunches to feed children who are not in school and a similar donation in Kansas City.
He declared, “We want to do everything in our power to help those in need in our communities.”
According to Mr. Bowe, staff members at The Andersons have come up with inventive ways to assist. One IT worker came up with a method to create face shields—protective gear designed to shield the complete face from exposure, not just the mouth and nose—using a 3D printer.
The Andersons gave a hospital in Texas a supply of the highly sought-after N95 masks, which had previously been used by staff members when working in dusty environments.
“It’s not a huge amount, but they should be going to the medical community,” he stated. “We’ve reached the absolute minimum that will protect our workers from dust.”
Going into spring, the Andersons’ other firms, Trade (agricultural) and Plant Nutrient (fertilizer), have promising futures. After severe flooding in 2019, Mr. Bowe expressed optimism for improved weather this year.
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He remarked, “This is a busy time of year for our fertilizer business.” “Weather-wise, planting season looks promising with drier and warmer conditions. Particularly in the East, we could use a strong start to the planting season.
In response to the coronavirus outbreak in the US, the grain and oilseed markets originally declined along with other financial markets, but according to Mr. Bowe, the outlook for The Andersons Trade company has improved.
There has been a lot of demand from grain processors such as flour millers and feeders. Because of the phase one contract that was finished early this year, demand from China has been expected to strengthen for months. In recent days, there have been indications that China may increase its purchases from the United States.
The fourth firm owned by The Andersons, rail, has been struggling for a while, and this year hasn’t seen much of an improvement due to low car loadings across numerous industries.
“The demand for grain cars has not been strong so far this year, but it would be helped by a larger 2020 crop,” Mr. Bowe stated.