NEW YORK — In an industry where consolidation is the norm, Bunge Ltd. doesn’t see itself as just a buyer or seller, said Soren Schroder, chief executive officer.
|Soren Schroder, c.e.o. of Bunge|
“I think we have a history of building strong partnerships,” Mr. Schroder told participants at the BMO Capital Markets Farm to Market Conference held May 18 in New York. “Last year we had three good examples of doing that.”
Those partnerships, he said, included joint ventures with Amaggi and the Saudi Agricultural Livestock Investment Co. (SALIC). Going forward, Bunge will look to similar partnerships, he said.
“They (partnerships) can be big; they can be small,” Mr. Schroder said. “I think they’re likely to be more regional in nature. In Brazil, the grain handling and the domestic crushing business is under pressure. So I wouldn’t be surprised if there are other ways for us to partner up with locals and extract synergies. In Argentina, we have a long history of doing it. We have a strong partnership with crush as well as in ethanol, very strong partnership … (with) the largest co-op in Argentina.
“I think we can do similar things in the U.S. I don’t see sort of any big bang thing, but rather a number of very thoughtful joint venture partnerships that like-minded companies, or there’s a mutual benefit for efficiencies. If there was something bigger, we’re open to it, of course. It is very clear that there are too many trying to do the same thing with a small margin. So there is need for consolidation, and this has been our way of approaching it and continues to be.”
As Bunge considers potential partnerships the company also is faced with changing U.S. trade policies. Mr. Schroder said trade talks have created “a heightened level of uncertainty and anxiety.” Even so, the company remains well positioned to respond to any market circumstance, he said, and is one of the reasons Bunge is focused on perfecting its global footprint.“(We want to make sure) we’ve got a balance presence everywhere,” he said. “And so if there was any dislocation for trade policy reasons with China or with Mexico, we would be in a very good position to fill up the slack with Brazil, Argentina, Ukraine. Mexico … has been busy in making sure that the prerequisites for imports from, for example, Argentina with wheat … arrangements and other trade issues are resolved, so that there is an open flow now if the prices rise. So people are preparing for something. Nobody knows what that is, but people are getting ready, and of course China, both direct inflows to where pricing quality is the right one. So I think if there was a major dislocation because of trade policy, our footprint would be in an advantage position.”