* Group targets external hire - sources
* Ciro Echesortu to step down after just a year as CEO
* Commodity trading firm says part of corporate transition
* Trading firms wrestle with consolidation, succession
(Adds sources on external hire sought, analyst comment,
By Gus Trompiz
PARIS, April 25 The chief executive of
commodities giant Louis Dreyfus is stepping down in a surprise
move after just one year, leaving the group to seek a new CEO as
it overhauls corporate structure to more closely resemble a
Louis Dreyfus is the "D" of the so-called ABCD majors that
dominate agricultural commodities, alongside Archer Daniels
Midland, Bunge and Cargill.
Chief Executive Officer Ciro Echesortu is to leave the
position as of June 1, with Chief Financial Officer Claude
Ehlinger becoming interim CEO, Louis Dreyfus Commodities said in
a statement on Friday.
The group is concentrating on finding an external candidate,
and an outside recruitment firm is advising the board, company
sources said, adding there was no fixed timetable for the
A new CEO from outside Louis Dreyfus would reinforce its
shift towards a public-style corporate structure, which it sees
as necessary to sustain its growth.
Dreyfus last month reported a sharp fall in annual profits,
citing the knock-on effects on grain markets from a severe U.S.
drought, but stuck to plans to spend $4 billion over the next
five years as it attempts to double in size.
The change in CEOs is part of a previously planned
transition, the company said.
"One year ago, we agreed with Ciro Echesortu to begin a
transition under his leadership, aiming to adapt our strategy
and accelerate the group's transformation, in order to reinforce
our leading position in the industry," Margarita Louis-Dreyfus,
chairwoman of the group's holding firm and its main shareholder,
said in the statement.
"Thanks to our solid performance in 2013, the conditions are
now right to implement a longer-term solution, and the
supervisory board has therefore initiated an active search
process for the new CEO," she added.
The temporary nature of Echesortu's CEO tenure had been
established from the start but not announced as it was unclear
how long it would take to make governance changes such as the
recent nomination of three new board members, the sources said.
CHANGING OF THE GUARD
The family-owned group has said it is leaving open the
possibility of a share listing or a tie-up with a partner,
although it says nothing has been decided. Dreyfus has issued
three bonds in less than two years.
"Part of it is governance, and part of it is that they want
to remain a major player. They see the need for additional
outside expertise," James Dunsterville, an analyst with AgFlow
in Geneva, said of the changes at Louis Dreyfus.
"I think the Dreyfus we see today and what we will see in 10
years will be completely different. Longer down the road, they
will probably become more of a public company," he said.
A flurry of consolidation deals among agricultural traders
and the listing of diversified commodity group Glencore
have fuelled speculation about the future ownership of the Louis
Dreyfus is a leading trader in agricultural commodities and
is also developing presence in metals.
Abrupt leadership changes at commodity traders Trafigura and
Gunvor this year have also underlined the delicate issue of
management succession in closely held trading firms.
But like previous CEO Serge Schoen, Echesortu, a 29-year
veteran at the firm, will retain a role in the company, in a
sign that Louis Dreyfus wants to proceed with a gradual
Echesortu, who was promoted last year from chief operating
officer, is now to become head of strategy. Schoen, who had
stepped aside after a successful eight-year reign, is currently
chairman of the group's supervisory board.
Ehlinger is to resume his CFO role when a new CEO is named.
Earlier this month, Louis Dreyfus Commodities appointed
three new members to the supervisory board, including the
chairman of crop chemical group Syngenta.
(Reporting by Gus Trompiz in Paris and Sarah McFarlane in
London; Editing by Veronica Brown and Jane Baird)