Jesse Riseborough and Andy Hoffman London
GLENCORE, the Swiss mining house and commodities trader, was seeking more deals in agriculture following the success of the C$6.1 billion (R60.4bn) takeover of Viterra three years ago, chairman Tony Hayward said.
“If we can find the right opportunities to expand the agriculture business, we will,” the former chief executive of BP told the FT Commodities Global Summit in Lausanne, Switzerland yesterday.
The acquisition of Canadian grain handler Viterra, which helped spur an $800 million (R10bn) increase in profit at Glencore’s agricultural division last year, had been “fantastic” for the company, he said.
While Glencore has been expanding in agriculture, it lacks any presence in the US, the biggest grain exporter.
The US grain trading sector was already fairly consolidated, but medium-size businesses including Scoular, Andersons and Lansing Trade Group might be targets for Glencore, sources said. Those companies would add physical assets like grain silos and terminals.
Chief financial officer Steve Kalmin highlighted the company’s lofty ambitions in grains last year. He said in December that Glencore, or G, should be added to the crop industry’s ABCD, the informal acronym representing the biggest players in grain trading – Archer-Daniels-Midland, Bunge, Cargill and Louis Dreyfus Commodities.
Glencore is one of the world’s two biggest traders of wheat, handling about 18 percent of the global seaborne trade. It is also among the top three agricultural exporters in Russia, the EU, Canada and Australia – all key countries in the global food market.
On top of trading and processing grains, Glencore also farms 180 000 hectares of land in eastern Europe.
Shares added 1.94 percent to close at R54.06 on the JSE yesterday. – Bloomberg