Russia grain terminal
The group recently shifted its business operations into two segments, the Value Chain segment and Merchandizing segment. 
Photos courtesy of LDC.
 
ROTTERDAM, NETHERLANDS — Net income at Louis Dreyfus Co. (LDC) for the first half ended June 30, 2017, was $159 million, up 14.4% from $136 million in the same period of last year.

Gonzalo Ramírez Martiarena LDC CEO
Gonzalo Ramírez Martiarena, chief executive officer of LDC.
“The half-year results, in what continues to be a fundamentally challenging market for the agricultural sector, show our ability to adapt to constantly evolving conditions through the diversity of our platforms, and that our customer-centric and entrepreneurial mindset is helping us to deliver solid results,” said Gonzalo Ramírez Martiarena, chief executive officer of LDC, when results were released on Sept. 28. “We are starting to see renewed optimism, most notably in Europe, but still recognize the need for flexibility to adjust our geographic and operational footprint. We have successfully begun a divestment process for some non-strategic assets and since closing the first half of the year, we have also entered into an agreement to sell our African fertilizers and inputs business.”

Net sales reached $27.7 billion, up 18% from $23.5 billion in the same period last year. LDC attributed to the increase in sales to an 8% increase in volumes shipped year-on-year and a slight improvement in the market price environment for the majority of commodities that the group handles. 

LDC noted the 8% increase in shipped volumes year-on-year was caused by the release of goods carried through year-end 2016 by some platforms.

The group recently shifted its business operations into two segments, the Value Chain segment and Merchandizing segment. Total segment operating results was $602 million, compared to $456 million one year earlier.

The Value Chain segment operating results for the first half of 2017 was $352 million down $1 million from the same period a year ago. The segment comprises six platforms: Oilseeds, Grains, Rice, Juice, Sugar and Fertilizers & Inputs.

LDC invested more in its joint venture with Cargill to operate a berth at the solid bulk terminal at the Port of Santos in Brazil.
 
“The Oilseeds Platform delivered very satisfactory results despite operating in an environment of bearish fundamentals impacted by slow farmer selling in South America, enlarged worldwide acreage, continued growth in global crop sizes and substantial inventories,” LDC said. “The performance was generated by solid margins in crushing and logistics in the Americas and supported by additional sold volumes across the board.”

The company attributed the Grains Platform’s operating results to market volatility. 

“The Grains Platform’s operating results were globally low over the period,” said LDC. “The semester was particularly marked by relatively weak price volatility levels, which were due to expectations that grains crops will continue growing despite some isolated weather-related concerns. In addition, industrial margins remained constrained, particularly in the U.S. and in Brazil.”

The Value Chain segment invested $102 million over the period, mostly in developing its logistics network.

In the second quarter of 2017, LDC invested more in its joint venture with Cargill to operate a berth at the solid bulk terminal at the Port of Santos in Brazil. The joint venture between the two companies began in 2015 and is contracted to operate the berth for the next 25 years. 

Both the Grains and Oilseeds platforms focused on investing on the river export project in Para state, Brazil, continuing to develop a fleet of barges and pushers. Also in Brazil, the platforms are working on enhancing their logistics capabilities, constructing a warehouse in Confresa in the Mato Grosso state. 

Russia grain terminal
The company opened its first grain terminal in Russia in May. 
 
In Egypt, together with minority platforms began building a second warehouse, having completed a first warehouse project in 2016.

The company opened its first grain terminal in Russia in May. The new facility brings LDC’s total storage capacity in the country to over 1 million tonnes.

“Continuing to optimize industrial efficiency, both platforms also conducted comprehensive and regular maintenance of their assets,” LDC said. 

Within the Oilseeds platform, LDC targeted its investments to increase in productivity in its Wittenberg, Germany, by adding a new biodiesel blending tank and commencing construction of a heat recovery system.

In Brazil, consolidating its origination footprint, the platform started constructing a transshipment terminal at Caiaponia City, Goiás state. In Ivory Coast, the Oilseeds platform continued building tanks at the Siveng jetty in the Port of Abidjan. 

During the first half of the year, LDC made some executive changes in leadership in its EMEA region.

According to a LDC spokesperson, David Ohayon remains senior head of the grains and value chains platforms as his duties as head of the EMEA region were taken on by Pedro Nonay Vela. In addition to Nonay's new role, he also remains head of oilseeds of EMEA.

“Economy-wise, the first half of 2017 looked a bit brighter,” said Martiarena. “Though some emerging countries did not perform as well as expected, improved signals, notably in Europe, fueled regaining optimism. Still, political concerns persisted. All eyes were set on the new U.S. government, as uncertainties remained on what policies might come and their possible snowball effect on the overall economy.”

“Under these circumstances, LDC’s results demonstrates the group’s strengths: our ability to adapt to constantly evolving conditions through the diversity of our platforms, our foundational network of assets throughout the world and our renowned expertise as a global merchant for more than 165 years,” Martiarena said.