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Agricultural commodity giant Louis Dreyfus CEO points to stronger results, rejects crisis talk

[PARIS] Agricultural commodity giant Louis Dreyfus has seen improved results this year and has no plans to be absorbed in a merger, its chief executive said on Wednesday, rejecting talk of a crisis after the surprise exits of its former CEO and finance chief.

Ian McIntosh was speaking a day after Louis Dreyfus Company announced his appointment following the resignation of CEO Gonzalo Ramirez Martiarena and CFO Armand Lumens.

Their departure revived speculation about instability at the family-owned firm.

The company, the "D" of the "ABCD" quartet of agricultural commodity majors alongside Archer Daniels Midland (ADM), Bunge and Cargill, has gone through a series of CEO changes since 2013 and faced financial pressures related to a market downturn and a buyout of minority shareholders.

Mr McIntosh said the top management departures were "not ideal" but not a sign of trouble at the 167-year-old company.

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"There is absolutely no crisis," he told Reuters. "In absolutely no way were either of these departures relating to financial performance or results or any strategic issues whatsoever."

Louis Dreyfus said on Tuesday that Mr Ramirez was pursuing other opportunities and Mr Lumens had left for personal reasons.

Mr McIntosh, who has worked for Louis Dreyfus since 1986 and was most recently its strategy chief, rejected the idea he would be a stop-gap CEO, saying: "I'm here as a long-term appointment."

Having sold non-core units such as metals trading and fertiliser distribution during a restructuring phase, the company was looking to accelerate growth down the food chain and profit from current volatility linked to trade tensions, he said.

"We are on track to deliver a pretty good year. As of this morning our financial performance year to date, year on year, is significantly improved."

Louis Dreyfus will publish first-half results on Oct 8. It had reported higher earnings for 2017 but excluding its now-divested metals unit, net profit declined.

Volatility had notably boosted oilseed crush margins, helped by the company's strong presence in South America and China, he added.

Soya beans have been one of the products most affected by a trade dispute between Washington and Beijing, with top importer China slapping extra tariffs on US soya beans and stepping up purchases from South America.

Resulting fluctuations in prices and trade flows also boosted recent earnings for ADM but were blamed by Bunge for a surprise quarterly loss.

The weak cycle in agricultural commodities in recent years had raised expectations of consolidation in the sector, a prospect fuelled by diversified commodity group Glencore's approach last year for Bunge.

Margarita Louis-Dreyfus, who inherited control of the company when her husband Robert died in 2009, has said previously she will keep options open regarding the group's capital, including a potential merger.

"At this stage there is certainly no mandate to execute any high-level merger or anything of that nature whatsoever," Mr McIntosh said.

"We're still a fully functioning independent business and I see no reason why that would change."

Speculation about the future of Louis Dreyfus, founded in eastern France in 1851, has increased due to the burden of its US$1 billion equity injection this year into debt-laden Brazilian sugar unit Biosev, and a requirement for Margarita Louis-Dreyfus to buy a stake from minority shareholders.

To expand further in downstream processing, Louis Dreyfus would look at opportunities for joint ventures, partnerships or acquisitions, McIntosh said, citing the recent takeover of an oilseed factory in northern China.


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