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June 17, 2013 9:16 am
Serge Schoen is set to retire as chief executive of Louis Dreyfus Commodities later this month after eight years in the post, during which he boosted the profitability of the privately owned agricultural commodities trading house.
Dreyfus, as the company is known, and its rivals Archer Daniels Midland, Bunge and Cargill are the “ABCD” group of companies that dominate global flows of food commodities.
Margarita Louis-Dreyfus, chairman and the biggest shareholder, said in a statement the company had seen “exceptional growth” during the past few years under Mr Schoen. “It has more than tripled its turnover, multiplied its net results tenfold and increased its shareholder funds sixfold,” she said.
Excluding its sugar subsidiary in Brazil, which was spun off, Dreyfus reported its best year in 2012, with net income rising to almost $1.1bn, up from $875m in 2011. Including the Brazilian sugar business, known as Biosev, it reported its second best year, with net income just above $1bn.
Dreyfus is in the middle of a transformation, tapping the public capital markets for the first time in its more than 160-year history, to finance acquisitions and investments. The trading house raised $350m last year through a perpetual bond. Dreyfus has announced a $7bn spending programme for 2012-17, a 40 per cent boost compared with the 2006-11 period
Mr Schoen suggested for the first time this year the next step could be abandoning its private status. The departing chief executive told the Financial Times Global Commodities Summit in Lausanne, Switzerland: “I’m not sure that in the next phase, the next five years, we can necessarily stay private”.
The company said on Monday that Ciro Echesortu, until now chief operating officer, will take over from June 30. Mr Echesortu joined Dreyfus in 1985.
Long tenures are the norm among agricultural trading sector bosses. This month Alberto Weisser stepped down as chief executive at Bunge after 14 years. He remains executive chairman. Greg Page has been chairman and chief executive at Cargill since 2007.
The agribusiness sector has seen a wave of consolidation over the past 18 months, with Glencore spending $6bn to buy Toronto-based grain trader Viterra; Marubeni, the Japanese trading house, spending $2.6bn for US-based grain trader Gavilon, and ADM paying A$3bn for Australia’s GrainCorp.
Mr Schoen become chief executive after Robert Louis-Dreyfus, the late husband of Ms Louis-Dreyfus and a great grandson of the founder, took control of the trading house in the mid 2000s, restructuring the business.
Ms Louis-Dreyfus, last year increased her control over the holding company that owns Louis Dreyfus Commodities, buying shares from other members of the family. Through a family trust known as Akira, she raised her stake in Louis Dreyfus Holding to 65.1 per cent, up from 50 per cent five years ago. Louis Dreyfus Holding controls roughly 80 per cent of the trading house, with the balance owned by approximately 500 senior employees.
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