Exclusive-Cargill internal memo describes structural overhaul to streamline company
2024.08.08 12:33
By Amy Lv and Naveen Thukral
BEIJING/SINGAPORE (Reuters) – Global trading house Cargill will undergo structural changes after missing internal earnings goals, with plans to streamline operations into three units instead of five, according to an internal company document seen by Reuters and two company sources.
Agricultural merchants like privately held Cargill are facing challenges as prices of the commodity crops they trade approach four-year lows and crop processing margins have fallen.
“Our recent performance and the market trends unfolding in front of us have proven a clear and pressing case for change,” the memo sent to staff by Cargill CEO Brian Sikes on Wednesday read.
Beginning Sept. 1, Cargill will transform from five enterprises into three: Food, Ag & Trading and a Specialised Portfolio, the memo said.
A Cargill spokesperson said in a statement to Reuters the company has laid out a clear plan to evolve and strengthen its portfolio. The spokesperson gave no specifics.
Cargill’s competitors Archer-Daniels-Midland and Bunge (NYSE:) Global recently missed Wall Street estimates for second-quarter earnings. Cargill does not publicly release quarterly earnings statements.
The memo said less than a third of Cargill’s businesses met their earnings goal in fiscal year 2024.
“We will reduce our costs and optimize our capital investments,” the memo said, promising to “streamline and simplify the organization.”
Jon Nash, currently head of Cargill’s protein and salt enterprise, will lead the new Food enterprise while Roger Watchorn, who is leading the agricultural supply chain, will become the head of Ag & Trading, the document showed.
David Webster will head the new Specialized Portfolio.
The new Food enterprise will combine Food & Bio and Protein & Salt teams, while Cargill Risk Management and Metals will be moving into the new Ag & Trading enterprise.
“At our core, we will always been a food and ag company. As such, these two enterprises are highly interconnected and will be supported by an independent operating system that builds our deep expertise, connections across the supply chain, and unique position at the heart of the global food system,” the memo read.
Specialised Portfolio will largely focus on Animal Nutrition & Health.
The U.S.-headquartered trading house has recently seen movement of senior executives.
Paul Ruston, Cargill’s metals trading lead, will leave the firm at the end of August and another Cargill veteran, Ross Hamou-Jennings, will retire at the end of this year as Asia-Pacific chair and enterprise leader for financial services and metals (FSM).
Julian Chase will also retire by late December from his role as head of Cargill’s Business Operations and Supply Chain, according to the memo.
