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PILLSBURY ENTERS FLOUR MILLING AGREEMENT WITH ADM

 PILLSBURY ENTERS FLOUR MILLING AGREEMENT WITH ADM


Joint Venture to Increase Productivity, Reduce Costs and Strengthen
 Pillsbury's Branded Flour Business
 MINNEAPOLIS, March 26 /PRNewswire/ -- Pillsbury and Archer Daniels


Midland (NYSE: ADM) today announced an agreement to enter into a flour milling joint venture whereby Pillsbury will receive $68.5 million. The 50-50 joint venture will be called ADM/TPC Milling.
 The partnership will increase productivity, reduce overall costs and ensure a supply of competitively priced, high-quality flour to Pillsbury, thus strengthening Pillsbury's branded baked goods and flour businesses. It will also mean shared capital expenditures on future milling improvements.
 Under the new agreement, Pillsbury will continue to market its branded family flour and sack flour, which is sold to commercial customers. ADM will manage and operate the mills, which are located in Buffalo, N.Y.; Enid, Okla.; Minneapolis, Minn.; and St. Louis, Mo.
 The partnership will be governed by a management committee consisting of two representatives from each partner. The facilities will be operated by ADM through an agreement stipulating that flour will be supplied to Pillsbury at agreed terms.
 "This joint venture leverages the strengths of both companies," said Paul S. Walsh, chief executive officer of Pillsbury. "The agreement will allow us to focus on marketing our branded flour, which has been identified with quality and value for more than 120 years. We also expect to gain efficiencies that will provide benefits for consumers."
 "ADM is enthusiastic about the prospects of the partnership," said H.D. "Joe" Hale, chief executive officer, ADM Milling Co. "We are joining up with a company that has one of the flour industry's great brands, and we will enhance our capability to produce high quality flour at the lowest possible cost in the process."
 As part of an overall strategy to emphasize its branded products, Pillsbury over the past year has been implementing ways of building its branded flour business and de-emphasizing bulk flour. In June 1991, the company sold four flour mills for $100 million, ensuring flour for internal needs while substantially exiting from the commodity part of the market. Those mills are located in Lake City, Minn.; Los Angeles, Calif.; Odgen, Utah; and Springfield, Ill.
 Pillsbury's Special Commodities Division, which is involved in food and feed ingredient commodity trading, will continue as an important part of Pillsbury and is not a participant in the joint venture.
 ADM, headquartered in Decatur, Ill., has been in the business of procuring, processing, transporting and merchandising agricultural products since 1902. Operating 136 domestic processing plants and 29 overseas, ADM is a world leader in the areas of oilseed processing, corn refining and wheat milling with net sales of $8.4 billion and net income of $466 million in fiscal 1991.
 Pillsbury is a subsidiary of the Food Sector of Grand Metropolitan PLC, one of the largest international companies in the United Kingdom and a world leader in drinks, retailing and food. Sales are in excess of $15 billion. Other U.S. subsidiaries include Burger King, Carillon Importers, GrandMet Foodservice USA, Haagen-Dazs, Heublein, the Paddington Corporation and Pearle Inc.
 -0- 3/26/92
 /CONTACT: Terry J. Thompson of Pillsbury, 612-330-4768, or Howard Buffett of ADM, 217-424-5413/
 (ADM) CO: The Pillsbury Company; Archer Daniels Midland; Grand Metropolitan
 PLC ST: Minnesota, Illinois IN: FOD SU: JVN


DS -- MN005 -- 1864 03/26/92 10:05 EST
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Publication:PR Newswire
Date:Mar 26, 1992
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