UK: Armajaro selling commodity trading arm to Ecom Agroindustrial
Published: 11/12/2013, 12:47:22 PM
London-based Armajaro Holdings Ltd will sell its commodity trading arm to Swiss agricultural trader Ecom Agroindustrial Corp Ltd, creating one of the world's biggest physical cocoa and coffee dealers in the latest deal to roil this niche market, according to Reuters.
The sale, announced in a statement from both companies on Monday, follows months of talks with several suitors and is the latest in a series of deals that are transforming the trade and processing of coffee, cocoa and sugar across the globe.
The agreement marks the end of a 15-year foray into physical trading by Armajaro co-founders and majority owners Richard Gower and Anthony Ward, who built the company into one of the world's biggest cocoa trading houses. Ward's bold deals in cocoa futures earned him the nickname "Chocofinger."
The trading business reported a US$7.5 million loss and negative cash flow in its fiscal year to end-September 2012.
For family-owned Ecom, whose roots go back over 150 years to cotton trading in Spain, Armajaro Trading provides a vast global logistics and storage network, and increases its presence in capital-intensive and high-risk cocoa and coffee trading.
"It moves us further down the path of being the leading integrated soft-commodity company," Ecom Chief Executive Officer Andrew Halle said in the statement.
Combined with Armajaro, Ecom will compete with Archer Daniels Midland Co and Cargill Inc in cocoa trading, and privately held Neumann Kaffee Gruppe in coffee.
Ecom's deputy head of cocoa and coffee chief, Alain Poncelet, will become CEO of the new company, and Mark Dendle will be the chief financial officer. Both will retain existing roles within Ecom.