WESTCHESTER, ILL. — One of Ingredion’s largest facilities again is running at normal production rates, but issues with the Argo facility outside Chicago continued to impact financial results negatively in the second quarter ended June 30.

Ingredion had net income of $114 million, or $1.80 per share on the common stock, which was down 42% from net income of $196 million, or $3.04 per share, in the previous year’s second quarter. Net sales increased 1% to $1.85 billion from $1.83 billion.

Within Ingredion’s Food & Industrial Ingredients – US and Canada business, net sales of $488 million were down 7% from $523 million in the previous year’s second quarter. Operating income of $58 million was down 33% from $86 million. Lower production at the Argo facility drove the decline. Ingredion began having operational challenges at the Argo facility in 2025.

“We are pleased to say that Argo reliability and production sequentially improved during the quarter, and at the end of June, the plant was operating at normal production rates across all major operating units,” said James Zallie, president and chief executive officer, in an Aug. 4 earnings call.

Ingredion, in its fiscal-year outlook for its Food & Industrial Ingredients – US and Canada business, now expects net sales to be down by low single-digit percentages and operating income to be down 20% to 25% when compared to the previous fiscal year, driven by Argo’s operational headwinds in the first half of the fiscal year, said Jason Payant, Ingredion’s interim chief financial officer.

Zallie said, “We have systematically addressed the various issues that arose at Argo over the last number of quarters -- I guess, starting with the grind. It is now operating reliably and at expected run rates.”

In Ingredion’s Food & Industrial Ingredients – LATAM business, sales increased 3% to $611 million from $596 million. Operating income fell 7% to $118 million from $127 million. Mexico’s transactional currency impacts and a more challenging demand environment drove the decrease.

“While the macroeconomic conditions in Mexico have been challenging, underlying long-term market trends remain intact,” Zallie said. “The business in South America continued to benefit from broad regional strength, particularly the growth in Brazil's industrial and brewing markets.”

VOLUME GROWTH IN TEXTURE

Within Ingredion’s Texture & Healthful Solutions business, sales rose 5% in the quarter to $627 million from $599 million. Operating income of $117 million was up 5% from $111 million. Volume growth was offset partially by unfavorable price mix and higher tapioca costs.

“Quarter two marked the ninth consecutive quarter of net sales volume growth in the segment, up 7% with broad-based growth from our solutions offerings and clean label ingredients,” Zallie said. “While the consumer environment remains mixed, we are seeing robust customer innovation activity with reformulation across health and wellness, protein and fiber fortification and clean label all supported by new product launches.”

Tapioca prices have risen more than 40% since the start of the year due to weather-related impacts limiting supply, he said.

Payant said, “It does take about a quarter to 1.5 quarters to completely pass those prices through and get more to a neutral place.”

Weather events led to lower tapioca supply and higher prices. | Source: ©FOMAA – STOCK.ADOBE.COM

ACQUISITION ADVANCES

Ingredion is in the process of acquiring Tate & Lyle PLC for approximately $3.71 billion. Shareholders of Tate & Lyle on July 28 voted to approve the transaction. Once it is completed, more than half of Ingredion’s total revenue will come from Texture & Healthful Solutions, Zallie said.

“Ultimately, Tate & Lyle will accelerate our shift toward higher-value and higher-margin solutions and positions Ingredion to be an even stronger innovation partner and reliable supplier,” he said.

Companywide over the first six months of the fiscal year, Ingredion had net income of $256 million, or $4.05 per share on the common stock, which was down 35% from $393 million, or $6.09 per share, in the same time of the previous year. Six-month net sales of $3.642 billion were down slightly from $3.646 billion. 

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