April 1, 2021

By Lynda Kiernan, Global AgInvesting Media

Weren’t we just here discussing Louis Dreyfus Company’s move to sell out of its sugar holdings? 

Well, now another of the global ABCD-giants is following suit. Cargill is exiting sugar trading, and has agreed to sell its 50 percent stake in Alvean, the largest sugar company in the world, to its joint venture partner in the company – Brazil’s Copersucar SA.

The deal will leave Copersucar as the sole shareholder of the company, which trades 12 million tons, or 20 percent of the world’s sugar supply, each year. However, an unidentified source close to Copersucar said the company was open to the possibility of adding a new partner in the company in the future. 

“We are fine with the idea of managing Alvean alone, but we will not put away the possibility of a strategic partnership that could strengthen the business, that could give it more efficiency,” the source told Reuters.

The Alvean joint venture was launched by Cargill and Copersucar in 2014, bringing together two of the world’s top sugar trading actors. Operating as an independent entity, upon its formation, Alvean’s trading activity was based in Geneva, with offices in Bangkok, Bilbao, Delhi, Dubai, Hong Kong, Jakarta, Miami, Moscow, Sao Paulo, and Shanghai.

At the time, Soren Hoed Jensen, COO, Alvean said, “Alvi, derived from the Latin word albus signifies white/crystal clear and symbolizes our engagement to be ethical and inclusive towards our partners. The suffix ‘an’ brings the notion of movement, expressing the dynamism of the sugar market and our commitment to be the unique link between supply and demand around the world. Alvean will seek new ways to be innovative and agile for the benefit of our customers and suppliers by bringing comprehensive global market knowledge and trading expertise.”

The deal giving Cargill an exit from the joint venture will depend on approval from Brazil antitrust agency CADE. Once received, Copersucar stated that it will fund the transaction with cash from its reserves, but declined to disclose specific financial details.

For Cargill, the company said that the move, which was part of a strategic review of its portfolio, will allow it greater focus on its core food, agriculture, and trading businesses.

“Cargill remains active in both global commodity trading as well as the sugar ingredient business, with business interests in the United States, Mexico and Brazil,” said the company in a statement.

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.