The established hierarchy of the global agricultural market is in flux amid the sector’s largest wave of consolidation in over a decade, with new firms challenging the decades-long dominance of the four big firms.
Swiss commodity giant Glencore’s deal to buy Canada’s Viterra for over $6 billion will give it a 45 per cent market share in Canada as the country’s vast wheat industry opens to competition, and will put more pressure on Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus — the "ABCDs" that trade the lion’s share of the world’s grains.
Over half a dozen other companies are also racing to expand in the sector as the relentless growth in demand for food, feed and fuel and the emergence of China as a bigger importer opens opportunities for arbitrage and trades.
The spotlight may now fall on Gavilon, the privately held U.S.-based grain, fertilizer and oil trader that put itself up for a possible sale earlier this year.
Here are some facts on the main global grain handlers that follow the ABCDs:
Turnover: Net profit of $265 million on sales of $11.79 billion in fiscal 2011, majority from handling and marketing arm. CEO Mayo Schmidt, chairman Thomas Birks.
Ownership: Publicly traded, mainly on TSX
Headquarters: Regina, Sask.
Staff: 5,800 worldwide
Trade volume: 23.9 million tonnes in 2011 (Canada and South Australia)
Assets: Commands a 45 per cent grain-handling market share in Western Canada. It also owns export terminal capacity in Thunder Bay, Ont., and Prince Rupert, B.C., and roughly 50 per cent of the total industry export capacity at the port of Vancouver. Viterra also owns almost all of the storage and handling system in South Australia, which produces about 15 per cent of the crops grown in Australia.
Operations: Agri-Products unit, its retail arm that sells seeds, fertilizers and other farm inputs; its Grain Handling and Marketing unit, which controls grain elevators and port facilities; and its Processing business, which processes oat products for cereal and provides animal feed.
Turnover: Total $186 billion in 2011; agricultural products division alone posted revenues of $17.1 billion, with a loss on both the industrial and the marketing side, due to volatility on the cotton market and lower biodiesel volumes.
Ownership: Controlled by its employees including CEO Ivan Glasenberg, the largest single shareholder with a stake of just under 16 per cent.
Founded: Began trading agricultural commodities three decades ago with the acquisition of a Dutch trading company in 1981. Division is led by former Cargill executive Chris Mahoney.
Headquarters: Baar, Switzerland
Staff: Almost 58,000 people, with 2,800 people in its global marketing operations and 54,800 in its industrial operations.
Trade volume: Traded 25.3 million tonnes of grains in 2011 against 20.9 million the year before; commanded almost 9 per cent of the global market for grains at the time of its IPO.
Assets: Glencore has inland and port elevators, silos and train wagons, with elevators and silos in Argentina, Australia, Brazil, Estonia, Hungary, Paraguay, Poland, Romania, Russia, Ukraine, Kazakhstan and Uruguay. In May last year, its elevators had a combined storage capacity of around 1 million tonnes per year, while its silos had a combined storage capacity of 3.8 million tonnes per year.
Turnover: Revenue of $15.6 billion in the fiscal year ended September 2011, according to Moody’s. President and CEO, Greg Heckman.
Ownership: Sold in 2008 by ConAgra Foods to an group led by Ospraie Special Opportunities Fund, which also included General Atlantic LLC and Soros Fund Management LLC.
Founded: 1874, by Peavey Company
Headquarters: Omaha, Neb.
Staff: 2,000 employees.
Operations: North American and Australian origination of grains, oilseeds, feed and food ingredients. Distributes approximately 30 million metric tons of grain worldwide.
Assets: 145 grain facilities, with more than 320 million bushels of licensed storage capacity; more than 74 fertilizer storage and handling facilities, with capacity topping 1.2 million metric tons. Distributes about 8 million metric tons of ingredients; transportation and logistics services to move fertilizer; distribution of ethanol, biodiesel and biomass. North American origination, storage and transportation of crude oil, natural gas, natural gas liquids and renewable fuels.
Revenue: $4.6 billion; net income $95.1 million. Chairman and CEO, Michael J. Anderson.
Ownership: Publicly traded, under symbol ANDE on NASDAQ
Founded: 1947, by the Anderson family
Headquarters: Maumee, Ohio
Staff: 1,690 full-time and 1,295 part-time or seasonal employees
Trading volume: Originated more than 390 million bushels of corn, soybeans, and wheat in 2011
Assets: Storage capacity of approximately 109 million bushels. Owns three ethanol plants in Indiana, Michigan and Ohio that can collectively produce 275 million gallons of ethanol; formulates and distributes nearly 1.5 million tons of dry and liquid plant nutrients every year; runs in-house crop insurance agency
Other operations: Repairs, sells, manages and leases a fleet of almost 24,000 railcars and locomotives; runs five retail home-good stores in Ohio
Turnover: n/a. Chairman Hartley Richardson, CEO Curt Vossen.
Ownership: Privately held, subsidiary of James Richardson and Sons
Founded: 1857 by James Richardson in Kingston, Ont.
Headquarters: Winnipeg, Man.
Staff: 1,700 staff across Canada
Assets: Owns roughly one-quarter of Western Canada’s grain-handling capacity at country elevators; four port grain terminals; two oilseed-processing plants. Port grain terminals are located at Vancouver, Thunder Bay, Hamilton and Sorel-Tracy, Que. Has grain elevators and farm product retail centers across Alberta, Saskatchewan and Manitoba. Operates oilseed processing plants at Lethbridge, Alta. and Yorkton, Sask.
Operations: Involved in grain handling, farm product sales, canola processing, food ingredients.
Turnover: $800 million. Chairman, Gustavo Grobocopatel.
Ownership: Grobocopatel family
Founded: 1984, by Adolfo Grobocopatel
Headquarters: Carlos Casares, Buenos Aires province.
Staff: More than 1,000 employees
Trade volume: N/A
Operations: The company helped pioneer direct (no-till) planting of genetically modified soy seeds in Argentina, earning the fame as the country’s "soy king." Los Grobos farms about 280,000 hectares (self-owned and rented) in Argentina, Brazil, Paraguay and Uruguay.
Turnover: N/A. German company 8.5 billion euros ($11.2 billion) in 2010. Total will be much higher including the huge global operations outside Germany. Chairman, William W. Gaston, CEO Gary Towne.
Ownership: 80 per cent Archer Daniels Midland, 20 per cent InVivo
Founded: 1919, by Alfred Toepfer
Staff: Over 2,000 worldwide, about 340 in Germany
Trade volume: worldwide 45 million tonnes in 2011
Revenue: $56.7 billion (2010). 2011 profit $431 million. Chairman and acting CEO, Richard Elman.
Ownership: Shareholders include China Investment Corp., which in 2009 bought a 14.5 per cent stake for $850 million.
Founded: 1986, by Elman
Headquarters: Hong Kong
Operations: Noble, which is listed in Singapore, is an investment holding company engaged in managing the global supply chain of agricultural, industrial and energy products; ship ownership, chartering and the provision of technical ship management services; trade finance; coal mining, soybean and sugar cane crushing activities.
Turnover: 2010-11 S$15.7 billion. Chairman, Sunny Verghese.
Ownership: Olam is 14 per cent owned by Singapore state investor Temasek.
Operations: Olam is involved in all stages of the cocoa supply chain, including sourcing, processing, exporting, shipping and logistics, importing and distribution.
Turnover: $44.71 billion in 2011 versus $30.38 billion in 2010 (net profit $1.6 billion in 2011, $1.3 billion in 2010). Chairman, Kuok Khoon Hong, COO Martua Sitorus.
Founded: 1991, by Kuok Khoon Hong and Martua Sitorus
Operations: It is the world’s largest processor and merchandiser of palm oil as well as largest edible oils refiner. It is one of the largest oil palm plantation owners and the largest palm oil refiner in Indonesia and Malaysia. It has one of the largest oilseeds crushers, edible oils refiners, specialty fats and oleochemicals manufacturers, and flour and rice millers in China. Over 300 manufacturing plants and an extensive distribution network covering China, India, Indonesia and some 50 other countries.
Turnover: $2.8 billion in year to September 2011 versus $2.02 billion a year ago. Net profit $172 million in the year to September 2011 versus $80 million a year ago. Chairman, Alison Watkins.
Trade volume: It expects to export around nine million tonnes of grain in the year to September 2012, up from eight million tonnes last year and about double its annual exports in a normal year.
Assets: GrainCorp has more than 250 country elevators with a total grain storage capacity of up to 20 million tonnes, from Mackay in Queensland, to Portland in Victoria. It operates seven bulk grain export elevators, serviced by up to 20 contracted trains, with the capability of hauling up to four million tonnes of grain annually. GrainCorp also manages more than one million tonnes of road transport each year.
Operations: GrainCorp operates at all points along the grain supply chain, from country storage sites, through to export elevators, supplying grain to Australia’s domestic market and exporting wheat, barley and oilseeds around the world.