Beijing commodities trader COFCO shakes up European operations

Dhaka,  Sun,  20 August 2017
Published : 12 Aug 2017, 21:24:05
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Beijing commodities trader COFCO shakes up European operations

LONDON/PARIS, Aug 12 (Reuters): 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 center 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.
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