Exclusive-Cargill internal memo describes structural overhaul to streamline company by Reuters

By Amy Lv and Naveen Thukral

BEIJING/SINGAPORE (Reuters) – Global trading house Cargill will undergo structural changes after missing domestic profit targets, with plans to streamline operations into three units instead of five, according to an internal company document seen by Reuters and from two company sources.

Agricultural traders such as private-equity Cargill are facing challenges as prices for the crops they sell are near four-year lows and crop-processing margins have fallen.

“Our recent performance and the market trends unfolding before us have proven a clear and compelling case for change,” Cargill CEO Brian Sikes said in a memo to staff Wednesday.

Effective Sept. 1, Cargill will transform from five businesses to three: Food, Ag & Trading and a specialty portfolio, the memo said.

A Cargill spokesman said in a statement to Reuters that the company has set a clear plan to evolve and strengthen its portfolio. The spokesman did not give details.

Cargill’s competitors Archer-Daniels-Midland and Bunge (NYSE: ) Global recently missed Wall Street estimates for second-quarter earnings. Cargill does not publicly issue quarterly earnings statements.

The memo said less than a third of Cargill’s businesses met their earnings target in fiscal 2024.

“We will reduce costs and optimize our capital investments,” the memo said, promising to “streamline and simplify the organization.”

Jon Nash, currently head of Cargill’s protein and salt business, will lead the new food business, while Roger Watchorn, who heads the agricultural supply chain, will become head of Ag & Trading, the document said.

David Webster will lead the new specialist portfolio.

The new food business will combine the Food & Bio and Protein & Salt teams, while Cargill Risk Management and Metals will move into the new Ag & Trading business.

“At our core, we will always be a food and agriculture company. As such, these two businesses are highly interconnected and will be supported by an independent operating system that builds on our deep expertise, connections along the supply chain and unique position at the heart of the global food system,” the note said.

The specialist portfolio will focus largely on Animal Nutrition and Health.

The US-headquartered trading house has recently seen a move of senior executives.

Paul Ruston, Cargill’s metals business leader, will leave the firm at the end of August, and another Cargill veteran, Ross Hamou-Jennings, will retire later this year as Asia-Pacific president and enterprise leader for financial services and metals (FSM). ).

Julian Chase will retire by the end of December as Cargill’s head of commercial operations and supply chain, according to the notice.