NETHERLANDS – The global agri-merchant firm, Louis Dreyfus Company B.V. has announced decision to exit its dairy business by mid-2019 as part of strategy to focus on core business operations.
As one of the leaders in the world’s agricultural product trade flows, the company is looking to exit non-core areas and focus on key product lines including investments in origination markets and expansion along the value chain.
Its dairy business dates 2009, supplying North America, Europe, Oceania and South America with milk powders, lactose and whey products.
The company is involved in involved in agriculture, food processing, international shipping, finance and is one of the ABCD quartet of companies, alongside Archer Daniels Midland, Bunge and Cargill- that dominates world agricultural commodity trading.
LDC’s Dairy Platform was identified as non-core in 2017 due to its lack of critical mass within the company’s portfolio.Federico Cerisoli, Chief Financial Officer.
The business accounted for roughly 1% of our revenues in 2018 and demanded substantial working capital resources.
LDC has been evaluating the best way to exit the business, either through an orderly wind down or a sale to potential buyers, these efforts are continuing and an exit will be implemented by the middle of this year.
The exit will have practically no impact on our global sales, which continue to grow overall, and is expected to have a slight positive effect on our working capital from 2019 onward.
Following the exit, LDC’s only exposure to dairy will be a non-controlling stake in a dairy processing plant in Australia, operated by a joint venture partner.
As part of the divestment strategy to focus on core business, the company, in 2017, sold its African fertilizers and inputs operations that included fertilizers, crop protection products, seeds and industrial chemicals to Helios Investment Partners.
In the same year, it sold its Australian fertilizer and inputs distribution business, Macrofertil Australia Pty Ltd, to Australian ag-retail business, Landmark Operations Ltd.
Part of the firm’s growth plans include continued investments in origination and destination markets, vertical and horizontal development downstream toward the end consumer and expansion in food innovation.