April 25, 2014 / 9:51 AM / in 4 years

UPDATE 2-Louis Dreyfus, in overhaul, changes CEO after only a year

* 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, background)

By Gus Trompiz

PARIS, April 25 (Reuters) - 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 public company.

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 appointment.

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.


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 group.

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 transition.

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)

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