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Founded in 1947 in Maumee, Ohio, The Andersons, Inc. (ANDE) is a diversified company operating in five different business segments ranging from buying, selling and storing grain, to leasing railcars, running retail stores offering the latest home hardware needs. The company has operations in seven U.S. states plus rail equipment leasing interests in Canada and Mexico. Earlier, Andersons had four reportable segments. In the first quarter of 2006, the company reclassified its business segments into five segments by splitting the Agriculture Group into two different segments, the Grain & Ethanol Group and the Plant Nutrient Group. Below is a description of the business segments:

The Grain & Ethanol Group (30% of 2006 profits, 8% gross margin) purchases and merchandises grain, operates grain elevator facilities in Ohio, Michigan, Indiana, and Illinois, and invests in and provides management services to ethanol production facilities. The company's elevator operations are an extension of merchandising and selling grain. The discount ANDE usually pays to acquire grain is factored in carrying costs. When the company buys grain from a farmer, it is stored in the grain operator facility. Andersons also makes money by storing grain for a farmer who wants it back at a later date. The group also has an investment in Lansing Trade Group LLC, which is in the grain and ethanol trading business.

The Retail Group (26% of 2006 profits, 29% gross margin) operates six retail stores under the name, "The Andersons" and a distribution center, all of which are located in several cities in Ohio. The stores sell traditional home center products (hardware, home remodeling, and lawn & garden), as well as automotive products, sporting goods, pet products, bath soft goods, and food. Typically each over 100,000 square feet in size, the retail stores rival the size of superstores such as Wal-Mart and Target.

The Rail Group (22% of 2006 profits, 40% gross margin) buys, sells, rebuilds, and repairs various types of used railcars and rail equipment. A large portion of the railcar fleet is leased from financial lessors and sub-leased to end-users. Also, the company sells railcars through non-recourse lease transactions. Management states it will continue to diversify its fleet in car types and industries through acquisition and open market purchases.

The Plant Nutrient Group (12% of 2006 profits, 9% gross margin) purchases, stores, formulates, manufactures, and sells dry and liquid fertilizer to dealers and farmers, provides warehousing and services to manufacturers and customers, formulates liquid anti-icers and deicers for use on roads and runways, and distributes seeds and a variety of farm supplies to dealers and farmers.

The Turf and Specialty Group (10% of 2006 profits, 20% gross margin) produces and markets turf and ornamental plant fertilizer products and control products for use in lawns and gardens and professional golf and landscaping industries, as well as corncob based products to the pet and the industrial markets. Professional turf products are sold directly and through distributors to golf courses. From the end of the third quarter 2005, the company decided to re-focus on the professional lawn market and minimize resources on the consumer side.


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