Chinese food commodities trader COFCO International is restructuring operations in Europe which will involve relocation and job cuts, as the state owned firm continues to integrate businesses it bought three years ago, sources say. COFCO group, which owns trading arm COFCO International, agreed in 2014 to acquire Rotterdam-headquartered grain trader Nidera and the agribusiness of Singapore-listed Noble Group
for more than $3 billion, but has struggled to integrate them. The overall aim of the integrated COFCO International is to directly challenge the "ABCD" quartet of agricultural commodity traders - Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus Company - that have long dominated the global business.
COFCO International was inaugurated in April 2017, bringing together Nidera and its Swiss-based grain arm COFCO Agri, under new Chief Executive Johnny Chi. Sources with knowledge of the matter say COFCO International is in the process of scaling down the Rotterdam office and re-focusing much of the division's overall activities at its Geneva headquarters. The overall number of job cuts expected is unclear although the sources said they were likely to be significant.
"The focus is on cost cutting," one of the sources said. A spokesman for COFCO International confirmed on Friday that a "restructuring is in progress", but could not say how many job cuts were expected. "The function of Geneva office will be the global headquarters, and that of Rotterdam will be the EMEA headquarters. There should be some staff/functions transfers according to this change," the spokesman said.
The company has already increased staff numbers in Geneva, home to COFCO International's headquarters and the centre of its grains and oilseeds business. Its Rotterdam office has separately played a core role in trading activities. Company memos seen by Reuters showed there had already been a string of departures in recent months from Nidera. These included head trader Wolfgang Stiehler, who had joined Nidera only in January this year to provide strategy. Others who have left included regional managers and office staff.
Sources have told Reuters that COFCO International is also overhauling its activities in South America especially in Brazil. In a sign of further change, COFCO International has appointed Fernando Barreiro as its new global head of wheat and barley, who will be based in Geneva, following the departure of predecessor Gergely Novak.
The company added separately that Pierre Lorinet, former chief financial officer with trade house Trafigura, had joined the board of COFCO International as an independent director. Serge Schoen, a former chief executive of Louis Dreyfus, is also an independent director on COFCO International's board. COFCO International's chairman Patrick Yu said in a statement it was pleased to have Schoen and Lorinet joining. "They bring deep knowledge of the industry as well as valuable experience in managing a global business, and help the company to enhance its corporate governance," Yu said.
One of about 100 conglomerates controlled by China's central government, COFCO Group has interests that include hotels, real estate and some of China's leading food and drink brands including GreatWall wine. It trades more than 78 million tonnes of grain a year, according to state media. The acquisition deals have given COFCO assets in some of the top grain, vegetable oils, sugar and coffee producing regions.
Comments
Comments are closed.