January 30, 2020 / 5:03 PM / a month ago

ADM CEO says no 'significant' coronavirus business impact for now

CHICAGO, Jan 30 (Reuters) - The coronavirus that is quickly spreading across China and beyond is not expected to have a significant business impact on global grain trader Archer Daniels Midland at this point, Chief Executive Officer Juan Luciano said on Thursday.

The company, which operates in China, however, could be impacted if the coronavirus outbreak impacts the global gross domestic product, Luciano said during a post-earnings conference call with analysts.

“We are in a very fundamental business, which is the business of food,” Luciano told analysts. “So I think that we will be impacted to the extent that GDP, the global GDP will be impacted - and that will depend on the magnitude” of the outbreak.

Luciano said that consumer dining and entertainment habits will likely shift, where people will stay at home instead of going outside.

“Maybe pulp consumer products could be impacted in demand, but people will have to eat inside anyway. So in that sense, more the packaged goods will probably pick up a little bit,” Luciano said.

“At this point in time, we don’t expect a significant impact in our business,” he said.

The International Monetary Fund said it is closely monitoring China’s coronavirus outbreak, but it is too soon to quantify the global potential economic impact.

Oreo cookie maker Mondelez International Inc expects its first-quarter revenue to be impacted by the virus while Starbucks Corp has closed thousands of restaurants in China.

Infections from coronavirus spread to more than 8,100 people globally on Thursday, surpassing the 2002-2003 SARS epidemic’s total in a fast-spreading health crisis forecast to pummel the world’s second-largest economy.

The vast majority of patients are in China where the virus originated in an illegal wildlife market in Wuhan city and has also claimed 170 lives, latest official data showed.

ADM has approximately 1,100 employees in China, and no employees have fallen ill, Luciano said.

The Chicago-based company also holds a significant stake in the Asia-focused Wilmar International Ltd, which shuttered its two facilities in Wuhan for the Chinese Lunar New Year. Its facility in Shanghai is closed until Feb. 9, Luciano said.

It is unclear when those facilities will reopen, he said.

On Wednesday, Wilmar said it has sufficient inventory to meet normal business demand, and is working with its suppliers and distributors to ensure a stead supply of products.

ADM reported its fourth-quarter earnings on Wednesday after markets closed. (Reporting By P.J. Huffstutter in Chicago. Editing by Marguerita Choy)

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