Archer Daniels Midland Company (NYSE: ADM) is making progress on its strategy to enhance shareholder value by improving returns, and the company sees many more opportunities ahead, according to President and Chief Operating Officer Juan Luciano. “Our returns strategy is beginning to deliver for us, and we are just getting started,” Luciano told investors at the BMO Farm to Market conference in New York City, adding that the strategy comprises several integrated elements, including capital allocation, costs, cash, portfolio-management and strategic growth. He noted that the company’s trailing, four-quarter average adjusted return on invested capital of 6.9 percent at the end of the first quarter of 2014 represented an increase from 6.6 percent at the end of the fourth quarter of 2013, and an improvement of 140 basis points over the company’s first-quarter 2013 ROIC. ADM’s objective is to achieve, on average, ROIC of 200 basis points above its weighted average cost of capital, or WACC, over an agricultural cycle. Based upon long-term WACC of 8 percent, ADM will aim to achieve, on average, a 10 percent ROIC when the U.S. interest rate environment returns to more normal historical levels. Improving Cost Structure, Capital Allocation and Cash Position ADM achieved its 2014 year-end goal of $200 million in run-rate cost savings more than a half-year ahead of schedule through an emphasis on maintenance, procurement, and improvements in energy efficiency and process technology, Luciano said. This success has led the company to double its cost-reduction target to a total of $400 million in run-rate savings by Dec. 31, 2014. A more disciplined approach to capital allocation and planning has generated positive results as well, he added. The soybean crush operation ADM opened in Paraguay in May 2013 generated first-year ROIC of 11.3 percent. And through ongoing efforts to improve ADM’s cash position, the company has identified an additional $500 million in opportunities and is pursuing them aggressively, Luciano said.