Kershaw, South Carolina ADM soybean processing plant closing this spring after over 50 years in operation

By Jane Alford jalford@paxtonmedia.com
 

KERSHAW, S.C. — The ADM soybean processing plant in Kershaw will be closing later this spring.

“It’s a total shock to me and to everyone here,” said Kershaw Mayor Mark Dorman, who was notified of the impending closure in an email Tuesday, April 15, from Archer Daniels Midland (ADM), a multinational food processing corporation based in Decatur, Ill.

“ADM has made the difficult decision to close the soybean processing plant in town,” said Christopher Riley, ADM director of state government relations, in the email. “I know this is not easy news to hear, either for our colleagues or for our partners and the Kershaw community. Kershaw has been a great community for ADM to be a part of for over 50 years.”

“It’s been there for decades. It’s a landmark here — everyone knows where ADM is,” Dorman said of the plant at 413 N. Hampton St., just blocks from Kershaw Town Hall. “This is a major blow to us, and a lot of people here are upset about it.”

ADM has run the facility since 1973, when it bought the former Kershaw Oil Mill from the J.T. Stevens family.

Company officials shared the news with employees at the plant later Tuesday, dismissing the front office staff immediately, according to one employee who had been with the company for 21 years.

“We have about 40 colleagues at the facility,” Riley said. “They’ll be able to stay on until we end production, which we expect to be in late May… Once we reach that date, they’ll receive severance, including outplacement assistance. A small number will stay on a little longer to clean and do maintenance in order to safely shut down the plant.”

Why is it closing?

The decision comes as ADM is in the midst of a global restructuring. In February, Reuters reported that ADM planned to cut 700 jobs (1.7% of its global workforce) and cut costs by $500 million to $700 million in the next few years. In late March, Reuters said ADM began cutting jobs in its oilseed division in its European headquarters.

“Many alternative courses of action were considered, but ultimately it was determined that a smaller, older facility like Kershaw is unlikely to be able to compete and serve customer’s needs efficiently,” Riley said.

It is also on the heels of the escalating tariff trade war with China, which is a big importer of U.S. agricultural products, including soybeans and oilseeds. China has recently imposed a 125% tariff on farm products.

ADM spokesperson Dane Lisser said Friday afternoon that the closure is not related to the tariffs, but “to our long-term view of this facility’s ability to compete and serve customer needs efficiently.”

“ADM has an unmatched footprint in North America and around the globe, and we’re continuing to look at opportunities both for strategic simplification and organic growth to ensure we’re operating the right assets to meet the needs of our customers and our company,” Lisser said. 

Other impacts

Dorman said beyond the job losses, the closure will also impact town finances as ADM is one of its three largest water and sewer customers. So will Lancaster County Natural Gas Authority.

“I hated to hear that ADM is closing,” said Rocky A. Hudson, LCNGA general manager. “They are our biggest customer. We will take a big hit with this.”

Dorman also expressed concern about others who will be affected by the closure, including local farmers.

One of those farmers is David Kirk, 54, who’s been farming in the Heath Springs/Rich Hill area all his life, first with his father and now with his son, Brady, on about 2,000 acres. They usually plant about 150-200 acres in soybeans right about now.

He said the only bright spot about this is the timing of the ADM closing announcement, since it came before most farmers have planted their soybeans. At least now, he said, farmers can make some decisions about what to plant, rather than finding out in June or July when the beans are already in the ground.

He said the additional cost of hauling the soybeans to Fayetteville, N.C., which will be the nearest processing plant, will hardly be worth it.

“Soybeans have fell off some from what they were a few years ago. A year or two ago, they were $12-$13 per bushel, now it’s $10,” Kirk said. “Around here, our soils are not so good as soils out west like Iowa and Illinois, where they can make double the bushels per acre. If we make 40-50 bushels here, we’re lucky.”

With that kind of margin, there’s not much extra money or time for hauling the beans further, or waiting in long lines at the plant, like they’ve done at ADM.

“We’re not equipped for long hauls,” Kirk said, noting that they will probably plant more corn to feed their cows, and let some fields lie fallow. His farm also raises turkeys and row crops, so it’s not dependent just on the soybeans, which he said were often planted as a follow-on crop behind corn, wheat or oats.

“It will hurt a lot of farmers,” he said, especially those who grow a lot of soybeans. “It’s like anything else — you have to change with the times and keep going.”

Don Hinson, owner of J&D Inc. in Lancaster, says the closing presents a challenge to his business, which buys soybean meal, hulls and oil from ADM, and also sells them soybeans. His company buys and sells soybean products and trucks them to other farms, usually hauling 10-12 loads a week from the ADM plant.

Some of the products, such as soy hulls, will be harder to get, he said, and soy meal will have to come from the Midwest.

Hinson said it will be, “logistically difficult and will definitely cost us because it will involve more hauling.” But he noted that it will cost farmers more. Where they are used to paying about 25 cents per bushel for hauling, now it will likely be 75 cents, he said.

Hinson said the closing will also impact the local railroad, with fewer cars going to and from Kershaw.

The Kershaw ADM plant’s closing will leave just one soy crushing facility in the Carolinas — the Cargill plant in Fayetteville, two and half hours away, Hinson said. The other closest ones are the Cargill plant in Gainesville and the ADM plant in Valdosta, both in Georgia.

“We hate that it happened,” Dorman said of ADM’s closing. “We pray for the best and hope that some other company will buy it,” noting the plant is next to the vacant property once occupied by the Springs textile mill.

“We feel for the employees and their families, and the farmers, town government, and on and on,” Dorman said of the ripple effect it will have on the community.

Source Link: The Lancaster News

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