PARIS (Reuters) - Chinese grain trading group COFCO International aims to expand rapidly after focussing this year on integrating overseas acquisitions, its CEO told the Financial Times.
COFCO International (CIL) spent more than $3 billion (£2.24 billion) to buy Dutch trader Nidera and Noble Agri, the soft commodities arm of Noble Group. But it has faced an arduous integration process after inheriting losses at Nidera.
CIL, controlled by state-owned COFCO Corp, is preparing for a “fast pace of growth” and expects the business to expand in 2018, Chief Executive Johnny Chi told the paper.
The integration of Nidera and Noble Agri would be finished by the end of 2017 and CIL’s operations were “delivering profitable performances for 2017,” he said.
Prospects for CIL, which was officially launched in April, have been clouded by losses and irregularities at Nidera, as well as the departure of large numbers of managers and traders.
Chi, who said personnel gaps had been filled, said the goal was to be a global player like Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus Company, the so-called ABCDs of agricultural trading.
“We want to be an international trading house like one of the ABCDs . . . not just a procurement platform for COFCO Corporation or China,” Chi said.
CIL aimed to double the volume of commodities it buys from farmers to 60 million tonnes by 2022, reducing reliance on other trading houses from which it would purchase three-quarters of the 110 million tonnes it expects to handle in 2017, Chi added.
A stock market listing also remained an objective for CIL, Chi said, adding that this would be done after combining CIL with some of COFCO’s domestic operations.
Reporting by Gus Trompiz; Editing by Edmund Blair