WRAPUP 1-Cargill energy closures signal focus on competitive markets
By Tom Polansek
CHICAGO, March 27 (Reuters) - Cargill Inc has shifted its focus in the energy sector with its exit from coal and European power and gas markets, confirming a commitment to areas where it can be more competitive.
The 149-year-old company is shutting its power and gas trading desks in Europe 14 years after establishing the business in Geneva, becoming the first traditional commodities firm to step away from a sector hard-hit by falling margins.
Cargill said all of the closures were unrelated to losses in U.S. energy markets, which one report put at more than $100 million.
The closures follow just six months after new chief executive David MacLennan stressed plans to expand Cargill's energy business to include more physical trade.
"It is likely that Cargill has made these changes to help optimize the overall profitability of its broad global portfolio of businesses," said Judi Rossetti, a senior director for Fitch Ratings.
One of the world's largest privately held corporations and biggest commodities firms, Cargill is best known as a top grains trader. Its revenue of $136.7 billion for fiscal 2013 would have placed it No. 10 on the Fortune 500 list of publicly held companies.
Investors will watch to see whether other trading firms follow the energy strategy of Cargill, which also has closed its carbon emissions trading and renewable energy businesses.
"We are making these decisions in order to focus our resources where we can be most successful for our customers and for Cargill," spokesman Pete Stoddart said. Continuación...