LONDON, March 27 (Reuters) - U.S. agribusiness company Cargill said on Thursday it was forming a joint sugar trading business with Brazil’s Copersucar in a move that will create one of the world’s largest traders of the sweetener.
Both companies have suffered severe setbacks in their sugar businesses with a fire at Copersucar’s sugar terminal in Brazil last year paralyzing operations for months.
Cargill had a major shake-up of its sugar trading activities in late 2011, a period which saw the company post its worst quarterly performance in a decade with sugar losses among factors cited.
Top trader Jonathan Drake left the company in late 2011 and was replaced by Ivo Sarjanovic who will be appointed chief executive officer once the new company is formed.
“The destruction of the terminal weakened them (Copersucar) enough so they had no choice,” one U.S. trader said.
The joint venture, in which both companies will own a 50-percent stake, is expected to be completed in the second half of this year.
Both companies ethanol businesses and fixed assets, such as terminals and mills, are excluded from the transaction.
Cargill is also exiting coal trading and will stop dealing in gas and power in Europe, the global commodities giant said on Thursday, becoming the latest company to step away from the sectors that have been hit by falling margins.
The privately-held firm, which employs 140,000 people in 65 countries, said its Energy, Transportation and Metals (ETM) division would close the businesses following a review that identified limited long-term opportunities in the sectors. (Reporting by Nigel Hunt, editing by William Hardy)