Sector News

Cargill likely to stay private, commits to Ukraine: CEO

January 28, 2015
Food & Drink
(Reuters) – Cargill Inc, one of the world’s largest privately held corporations and a top commodities trader, will likely remain private for at least another decade, the chief executive said on Tuesday as he assessed challenges facing the 150-year old company.
 
David MacLennan, who has led Cargill for the past 13 months, also revealed that unrest in Ukraine had affected plans for the company’s expansion in the Black Sea, a key grain-producing region. In the United States, he said new financial reform rules have made it harder for Cargill to manage risk.
 
MacLennan’s comments at a commodities conference in Miami gave rare insight into Minneapolis-based Cargill, a leading U.S. grain exporter, biofuels producer, food processor and energy trader.
 
The families who own Cargill leave the “vast majority” of their profits in the company to improve infrastructure and make acquisitions, and they want it to stay private, he said in a speech.
 
“I don’t see public ownership coming anytime soon,” MacLennan, 55, added.
 
Cargill is among four “ABCD” companies that dominate the flow of agricultural goods around the world, competing against rivals Archer Daniels Midland Co, Bunge Ltd and Louis Dreyfus Corp.
 
Cargill does not have a port on the Black Sea, an export hub for corn and wheat, and wants to invest more in the region, MacLennan said. The company’s board approved expansion plans in May 2014, but they were subsequently put on hold, he noted.
 
In July, a group of armed individuals occupied a Cargill plant in Ukraine’s Donetsk region. Still, Cargill is committed to staying in Ukraine, MacLennan said.
 
“You’ve got to be in Ukraine if you’re a global food company,” he said.
 
China, the world’s fastest growing corn market, hurt Cargill when it began rejecting shipments of U.S. grain in November 2013 due to the presence of a biotech trait that had not been approved for import.
 
“We were right in the middle of it,” MacLennan said about the rejections, adding that Cargill suffered “a lot of financial damage.” He called the rejections “a seminal moment” for the company.
 
In September, Cargill alleged in a lawsuit against Syngenta AG that the seed maker had misrepresented when Beijing would approve the trait blamed for China’s rejections. Cargill had previously said the rejections had reduced earnings.
 
The U.S. Dodd-Frank financial reform rules have been a “head banger” making it harder to manage risk, MacLennan said. (Reporting by Tom Polansek; Editing by Meredith Mazzilli and David Gregorio)

Related News

February 28, 2021

Tetra Pak introduces certified recycled PE polymers for food contact applications

Food & Drink

Two Tetra Pak production sites in Europe are now certified to produce packaging with recycled polyethylene (rPE) polymers, according to the Roundtable on Sustainable Biomaterials (RSB) Chain of Custody mass balance attribution method.

February 28, 2021

Cargill names Brian Sikes as chief operating officer

Food & Drink

Cargill has appointed Brian Sikes as its chief operating officer (COO), a role in which he will also serve as a management director on the company’s board.

February 28, 2021

Heineken and Coca-Cola System realign Brazil distribution partnership

Food & Drink

Heineken has reached an agreement with The Coca-Cola Company and the Coca-Cola System in Brazil to redesign their long-standing distribution partnership in the country.

Send this to a friend