Boston, MA 03/11/2014 (wallstreetpr) – The history of FMC Corp (NYSE:FMC) goes all the way back to 1883 when it was founded as the Bean Spray Pump Company. Since then, the company has gone through many phases including producing Armored Personnel Carriers and Bradley Fighting Vehicles during World War II. At present, FMC is focused on 1) Agricultural Solutions, 2) Health and Nutrition, and 3) chemicals and minerals.
The Re-Organization
In its 4Q2013 results, FMC Corp (NYSE:FMC) announced that it was going to be split up into two independent public companies. The new FMC will be comprised of the Agricultural Solutions and Health and Nutrition segments of the present company. FMC Chemicals will be spun off as an independent company comprising of the current FMC Minerals segment. FMC had a very upbeat 4Q2013 where their consolidated revenues and Agricultural Solutions segment earnings rose by 24% each. Health and Nutrition segment earnings rose by 13% while Minerals segment earnings went down by 18%. The FY2013 figures show a growth in consolidated revenues, Agricultural Solutions earnings, and Health and Nutrition segments earnings but a decline in Minerals segment earnings.
The Rationale
The segmented outlook for FY2014 and beyond reflects continued high growth prospects in the Agricultural Solutions segment on account of newly introduced products and market penetration in Brazil plus acreage expansion in Latin America. This trend will be further amplified if FMC manages to enter into growth markets such as China, Africa, and India where agricultural output is growing and needs to keep growing to meet the demands of a growing population base.
The Health and Nutrition segment is also expected to witness smart growth on the backs of food and pharmaceutical ingredients.
It makes sense to consolidate these two operations primarily related to food and agriculture and pharmaceuticals. Globally, these are growing sectors and FMC Corp (NYSE:FMC) should continue to prosper and grow.
The FMC Corp (NYSE:FMC)’s Minerals segment deals with inorganic chemicals such as Alkalis and Lithium. It has a different business dynamic and would do better as a separate company with separate management.
