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Benson Hill Partners with ADM to Scale Production of High-Protein Soy Ingredients

In August 2022, Benson Hill, a food technology company, forged a partnership with ADM (Archer Daniels Midland Company) to expand the production of high-protein soy ingredients specifically catered to the North American market. This collaboration aims to meet the increasing demand for nutritious plant-based products and leverage the synergies between the two companies.

The partnership with ADM is just the beginning for Benson Hill, as they actively seek additional partners to further enhance their capabilities and extend their global reach. Adrienne Elsner, the interim CEO, stated during the second-quarter earnings call on August 9 that the company’s future strategy involves establishing robust partnership models. These models will allow Benson Hill to maximize their platform, pipeline, capabilities, and intellectual property in both existing and new markets, including large-acre livestock feed and international opportunities.

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Exploring the Livestock Feed and International Markets

Adrienne Elsner emphasizes that the livestock feed sector represents a significant opportunity for Benson Hill. While this market generally yields lower margins compared to the human food market, it offers substantial volume potential. Benson Hill’s high protein, low anti-nutrient soybeans provide a feed efficiency and sustainability advantage that could revolutionize segments of the livestock feed industry. Furthermore, these soybeans are easier to digest, making them a more appealing and cost-effective alternative to ingredients currently used in animal food.

The company’s interest extends globally, targeting various international markets that offer unique advantages. Europe presents opportunities for sustainability initiatives, while Latin America shows potential for meat extension possibilities. In addition, Benson Hill aims to contribute to greater nutrition security in regions experiencing explosive population growth, such as India, Asia, and Africa. These partnerships, facilitated by the company’s varied portfolio and pipeline attributes, are expected to benefit every aspect of the agricultural food value chain.

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Positive Outcome and Future Prospects

Regarding the partnership with ADM, Adrienne Elsner expressed satisfaction with ADM’s utilization of Benson Hill’s 2022 crop. ADM’s processing capacity and extensive network serve as assets in effectively leveraging Benson Hill’s high-protein crops. Encouragingly, the 2023 crop dedicated to the collaboration appears to be performing well thus far, with minimal impact from widespread drought conditions. The potential for this partnership to yield significant benefits is a source of excitement for both companies.

Despite the positive developments, Benson Hill reported a net loss of $57 million for the quarter, compared to a loss of $28 million in the same period the previous year. However, revenues increased by 17% to $109 million, showcasing steady growth. Over the first six months of the fiscal year, Benson Hill recorded a loss of $60 million, a slight increase from the $44 million loss in the corresponding period of the previous year. Notably, revenues for the six-month period surged by 53% to $244 million, highlighting the company’s expanding market presence.

To enhance financial performance, Benson Hill plans to reduce operating expenses by $10 million annually in 2024. Additionally, the company is actively evaluating options for its soybean crush assets in Seymour, Indiana, as part of their ongoing effort to optimize operations and improve working capital management.

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