Photo courtesy of Glencore.
BAAR, SWITZERLAND — Glencore Plc’s total agriculture production drifted down 10% for the first quarter of 2017 compared to 2016.
The total 2.355 million tonnes of ag production consisted of 1.705 million tonnes of crushing, 223,000 tonnes of wheat milling, 37,000 tonnes of rice milling, 168,000 tonnes of biodiesel, 10,000 tonnes of farming and 212,000 tonnes of long-term toll agreement.
Both the crushing and wheat milling segments decreased 7% compared to the first quarter of 2016.
The decrease in agricultural processing volumes mainly reflect the later start to the sugarcane crushing season in Brazil, starting April rather than in March, and maintenance at the Timbues crushing plant in Argentina.
In late February, the company decided it was time to grow its ag segment following the sales of assets and debt reduction in the billions of dollars.
|Ivan Glasenberg, CEO of Glencore.|
“We reduced the debt considerably: net funding by $14.7 billion and net debt $14.1 billion, respectively, over the past 18 months,” Ivan Glasenberg, chief executive officer of Glencore, said during a Feb. 23 earnings call with analysts. “And the debt has moved down, $32.6 billion; and net debt down at $15.5 billion. So, a significant decrease since the implementation of the deleveraging process of the company.”
Glencore sold 50% of its agricultural segment during this process, which allowed the company to reduce debt but also focus on growing its ag sector.
Growing the ag sector of Glencore will include new infrastructure in areas of the world that the company does not have a strong footprint.
Switzerland-based Glencore is one of the world’s two biggest wheat traders, handling 18% of the world’s seaborne trade, and is one of the top three agricultural exporters in Russia, Canada, Australia, and the E.U. The group is vying for a position among the world’s biggest ‘ABCD’ commodity traders – Archer Daniels Midland Co., Bunge Ltd, Cargill and Louis Dreyfus Commodities BV.