Andre to retain core grain business, reduce workforce in major restructuring

by Emily Wilson
Share This:

After several years of heavy losses that have threatened its survival, international grain trader Andre et Cie recently announced a major restructuring that includes a dramatic reduction in its work force and the sale of some non-core industrial businesses in South America.

At a Jan. 19 press conference at the company's Lausanne headquarters, J. Friedrich Sauerlander, Andre's chief executive officer, said the company would continue in its "core business" of trading in wheat, oilseeds and products, rice, coffee and cocoa. Andre also will continue trading in certain specialty commodities but will no longer trade in sugar.

Sauerlander, who was named Andre c.e.o. in October, said the company would concentrate on the physical aspects of trading, including shipping, storage and insurance. He said Andre would increasingly use risk management tools to protect its trading operations and plans to halt speculative trading for its own account.

The press conference marked a first for the company, which had never before commented on its financial affairs. The presentation included a number of extremely blunt comments about what precipitated the current difficulties. Reviewing several years of "unsatisfactory performance," Sauerlander said the company was lacking in performance culture, operating controls, transparency, communication and leadership.

He said Andre would break even in 2001 after heavy losses in 1999 and 2000. But it will do so with smaller sales — an expected U.S.$2.9 billion, down from U.S.$4.2 billion in 2000 and U.S.$5.35 billion in 1999.

"Following an analysis of the problem, we have decided to concentrate our efforts on the products we want to maintain and develop while discarding the others," Sauerlander said. "Nothing less than a business plan will enable us to get rid of the problems of the past."

Specifically, the company plans to cut its global work force to 565 from 1,430 at all levels, including eliminating 75 positions at headquarters. Andre also plans to reduce its number of operating companies to 23 from 80.