Look no further than Ingredion (INGR) for the answer. If not Ingredion, where else? The company turns corn and other raw materials into sweeteners, starches and nutrition ingredients for the food, beverage, brewing and pharmaceutical industries.
Over its life, the more-than-100-year-old company has followed a tried-and-true recipe that's helped it buck the head winds in its cyclical industry and chalk up an impressive track record.
Profits have surged by at least double digits in all but two of the past 11 quarters.
"We have a solid business model and know how to create value," said Chief Executive Ilene Gordon in a presentation at its analyst day Nov. 28. "Over the last three years we have met or exceeded our long-term performance targets. Our balanced mix of products, geographies and industries served position us well now and into the future for growth."
Ingredion's business model is based on converting corn into a broad portfolio of value-added products for customers in over 60 industries, says Chief Financial Officer Cheryl Beebe. You can find its ingredients in everything from ice cream, frozen microwave meals, soda and beer, to IV solutions and cosmetics.
Key to the model's success is Ingredion's focus on operating as a local producer, using local management. The approach gives the company a unique understanding of the cultures and product requirements in each market. The regional operations are supported by several global functions, such as operations, IT, procurement and ingredient development centers.
Balanced Markets
Ingredion maintains a 50-50 balance between mature and emerging markets. Some 54% of sales come from North America, 25% are from South America; Europe, the Mideast and Africa account for roughly 9%, and the rest is from the Asia-Pacific region.
"The combination of a number of mature markets and emerging markets gives us favorable organic growth," Beebe said.
Ingredion's growth strategy also includes geographic and product expansion. That came into play with the October 2010 purchase of National Starch, the New Jersey-based global specialty starches business of AkzoNobel N.V. of the Netherlands.
Ingredion, then called Corn Products International, paid $1.3 billion for National Starch, which had 2009 revenue of $1.2 billion from sales of specialty starches to both local and multinational customers in the food, papermaking, consumer and industrial segments. The company's name was changed to Ingredion on June 4.
At the time of the buy, National Starch operated 11 plants in eight countries, including new geographies for the company, such as the United Kingdom, Germany, Australia and New Zealand.
