Plans by Chinese food group Cofco to build an international grain trading business to rival the biggest names in the industry have been thrown into doubt by the sudden departure of the unit’s chief executive.
Matt Jansen, who joined Cofco International 18 months ago, left the company this week for personal reasons, said the state-controlled group on Friday, as it announced the appointment of a long-serving executive as his replacement.
Mr Jansen joined Cofco under former chairman Frank Ning, who wanted to build an international grain trading business to compete with the four companies that dominate the market: Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus Company.
Since 2014 Cofco has embarked on an aggressive acquisition spree, spending more than $4bn on Nidera, a Dutch grains trader, and the agricultural trading arm of Noble Group, the Hong Kong-based commodity house.
But Cofco’s international expansion plans have suffered setbacks. The most recent was the disclosure last month of a $150m hole in the accounts of Nidera last month, which followed losses because of the actions of a rogue biofuels trader.
One person close to Cofco said Mr Jansen’s departure followed a clash over strategy. “The reasons Matt joined the business have changed,” added this person.
Sector watchers said the appointment of Jingtao ‘Johnny’ Chi as the new head of Cofco International signalled a focus on supplying food for China’s huge population rather than building a business to compete on the global stage.
“The Chinese are reining in Cofco International and taking back control,” said Jean-Francois Lambert, founding partner at Lambert Commodities, a consultancy, and former head of commodity trade finance at HSBC.
“The idea of building an international grains trading business is no longer on the agenda.”
Mr Jansen was poached by Cofco in 2015 from ADM, where he had risen through the ranks to head its oilseed trading unit.
He embarked on a full restructuring of Cofco International, replacing most of its senior managers and axing thousands of employees. One of his biggest achievements was improving the performance of its Brazilian sugar business.
Mr Jansen told the Financial Times in April that he was looking for Cofco International to take a stock market listing by 2020, and spoke of plans to make acquisitions in the US.
His departure could further delay plans to integrate Nidera with the assets acquired from Noble Group. This process was supposed to have started in December.
Mr Jansen, who will serve as a Cofco adviser on a temporary basis, could not be reached for comment.
Cofco highlighted Mr Chi’s record integrating businesses and his experience of international agriculture markets.
“Johnny successfully merged and consolidated three Cofco agriculture entities into a single platform that has produced a total turnround in performance,” said Patrick Yu, chairman of Cofco International. “He is well versed in the international agricultural business as he has led Cofco’s import and export business for the past seven years.”
Mr Ning left Cofco in December 2015 and is now the chairman of Sinochem, the state-owned chemicals and fertiliser company.
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