(Adds details on Cargill operations)
By Tom Polansek
CHICAGO Feb 17 Cargill Inc will stop
selling seeds, fertilizer and crop chemicals to farmers in the
Black Sea region, as the global trader continues to cut back
operations in the face of sliding commodity prices.
The 150-year old company, one of the world’s largest
privately held corporations, is in the middle of a restructuring
aimed at improving the way it responds to market swings.
Cargill will immediately start winding down its crop input
business in countries including Russia, Ukraine, Romania and
Hungary, and completely exit the business in the region by the
end of May, according to a statement on Wednesday.
The company “has been unable to realize many of the expected
synergies” between selling crop inputs and buying grain, the
statement said.
Exiting the business will probably impact about 180
employees, according to Cargill. The company had about 25,000
employees in Europe, the Middle East and Africa last year and
150,000 worldwide, according to a 2015 corporate fact sheet.
As the company pulls out of inputs, it will aim to increase
the volume of grain it buys in the region.
“The company will refocus its attention on its grain and
oilseeds origination, merchandising and trading activities in
these markets,” the statement said.
Last year, Cargill began a restructuring as global
agricultural companies came under pressure from slumping
commodity prices, slowing demand in China and weakness in
emerging markets.
A global glut of grains and oilseeds has sparked a sharp
drop in crop prices that has prompted farmers worldwide to
review their expenses, including spending on fertilizer, seeds
and chemicals.
In Romania, Cargill entered the crop inputs market in 2001
and has distributed a wide variety of seeds, pesticides and
fertilizers since 2008, according to a company website. At one
point, it dedicated three warehouses in the country to the
distribution of inputs.
The Black Sea is a major producer and exporter of crops
including corn and wheat.
Cargill will continue to sell crop inputs in other
countries, including the United States and Canada, where Cargill
AgHorizons operates a network of facilities that buy grain from
farmers and sell inputs.
The company said in December that it would sell its crop
insurance unit and in January that it would close its London
shipping office.
(Reporting by Tom Polansek; Editing by Bill Rigby and Alan
Crosby)
