Cargill restructures the company amid financial challenges — Reuters
Cargill, one of the world’s leading agricultural traders that operates from the U.S., is set to undergo significant structural changes from September 1, as revealed in an internal memo circulated by CEO Brian Sikes, that got into possession of Reuters journalists. The overhaul, prompted by underwhelming financial performance and challenging market trends, will see the company condense its current five units into three streamlined divisions: Food, Ag & Trading, and a Specialised Portfolio.
This strategic reorganization comes at a time when the agricultural sector faces declining commodity prices and reduced crop processing margins. The memo underscores a pressing need for change, with only a third of Cargill’s business sectors meeting their earnings objectives in fiscal year 2024. “We will reduce our costs and optimize our capital investments,” Sikes stated in the memo, emphasizing a focus on simplification and efficiency.
The restructuring will also bring shifts in leadership. Jon Nash, currently at the helm of Cargill’s protein and salt operations, will lead the new Food enterprise, which merges the Food & Bio and Protein & Salt teams. Roger Watchorn, current head of the agricultural supply chain, will oversee the Ag & Trading enterprise, which will now include Cargill Risk Management and Metals. The Specialized Portfolio will primarily concentrate on Animal Nutrition and health under the leadership of David Webster.
Additionally, the restructuring aligns with significant personnel changes within the company. Paul Ruston, the lead of Cargill’s metals trading, and Ross Hamou-Jennings, the Asia-Pacific chair, are set to depart by the year’s end. Julian Chase, head of Business Operations and Supply Chain, will also retire in late December.
This move by Cargill mirrors broader industry challenges, as competitors like Archer-Daniels-Midland and Bunge Global also report earnings below Wall Street expectations. Cargill’s reorganization aims to address immediate financial concerns and fortify its core operations in food and agriculture, ensuring resilience in the face of global economic pressures.
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