ED&F Man has appointed ag industry veteran Chris Mahoney as chairman in the trading company’s latest board shake-up as it attempts to build on restructuring aimed at returning it to profit after four years in the red.
The agricultural commodities group said that Mr Mahoney, who led Glencore’s agricultural business for 17 years, would from March 15 join as non-executive chairman, taking over some responsibilities from Rafael Muguiro, who currently holds both chairman and chief executive roles.
Indeed, “the appointment follows the decision to return to the group’s traditional governance structure separating the roles of chairman and chief executive”, ED&F Man said.
Mr Muguiro will now “focus on his role as chief executive, with overall responsibility for leading the management team” and for implementing the group’s “strategic plans”, after its refocus under his leadership on its “core trading roots”, with some brokerage and production assets sold off.
The company - which is best known for its sugar trading and Volcafe coffee operation, but also trades the likes of feed and pulses - also revealed the departure of Lukas Paravicini as chief financial officer.
‘Challenging external environment’
Mr Muguiro said that Mr Mahoney’s “contributions as chairman will be very welcome as we continue to move forward in this new chapter in our history”.
While ED&F Man faces a “challenging external environment”, thanks to factors such as the Covid-19 pandemic, the trader also enjoyed “a more stable financial position following our refinancing”.
He noted that this process was “completed in September”, when the group gained court approval for refinancing $1bn in debt, after the pandemic hindered plans to raise cash from asset sales.
Mr Mahoney spent 17 years with Cargill, in areas such as grains and sugar, before joining Glencore in 1998, with responsibility for its farm product activities in the former Soviet Union, South Africa and South America.
He was promoted to director of the Glencore ag division in 2002, before leading its development in 2016 into a separate company, Glencore Agriculture – now called Viterra, after the Canadian merchant it bought in 2012.
Mr Mahoney oversaw the Viterra integration, besides the sale of a 49% stake in Glencore Agriculture to two Canadian funds in 2016.
While retiring from the group two years ago, he remains a non-executive director.
‘Continued negative impact’
ED&F Man ran up losses totalling more than $400m between 2017 and 2019, and appears to have remained in the red in the year to September 2020 too, to judge by accounts of Suedzucker, the German sugar giant which holds a 35% stake.
Suedzucker said last month that the trader proved a “profitable trading company” in the latest year, but was dragged into a loss by restructuring delays caused by the pandemic.
Nonetheless, it said that ED&F Man faced continued headwinds from “the continued negative impact on earnings from industrial holdings, the more difficult brokerage business due to the lower interest rate situation [and]higher refinancing costs” besides Covid-19 effects.
“We expect ED&F Man to continue to have a negative impact on our equity result in the upcoming quarters,” Suedzucker said.
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