PARIS (Reuters) - Sierentz, a family holding of Louis-Dreyfus members, officially launched a new agricultural commodities trading firm on Friday with a primary focus of exporting grain from the Black Sea region, its chief executive said.
Reuters first reported plans to launch Sierentz Global Merchants (SGM) in Europe in October, after the company’s registration in Paudex, near Lausanne, Switzerland.
David Ohayon, who had been Head of Grains at Louis Dreyfus Company (LDC), left the agricultural major along with a group of other colleagues in August 2017 after differences of opinion with the company’s management.
Sierentz is controlled by members of the Louis-Dreyfus family, separate from the historic group Louis Dreyfus Company where Ohayon spent more than 25 years.
Ohayon said the trading company would first focus on exporting grain from the Black Sea region to private and state-backed customers in Africa, the Middle-East and Asia.
“Concretely what we will do is to originate Black Sea, trade European markets and gradually expand our footprint to have a more global approach around grains in particular and other products if we see that there is an opportunity for it,” Ohayon told Reuters in an interview.
SGM has established relationships with farmers, originators, and agroholdings in those countries that will allow them to supply the grains to the world market, he said.
“The idea is to gradually become a major player in the region,” he said.
Russia, Ukraine and other Black Sea countries like Kazakhstan form the Black Sea grain exporting region, one of the world’s largest. They ship grain in competition with the European Union, the United States and Australia to customers in the Middle East, Africa and Asia.
State-backed customers include one of the world’s largest wheat buyers, Egypt’s purchasing arm GASC, which sources most of its supply from the Black Sea region.
“We think the Black Sea is a market that will continue to grow and that we have an understanding of the market that can allow us to have a place that is non-negligible in the future,” Ohayon said.
SGM’s operations are expected to start in May.
Ohayon, who will be based in Geneva, said origins could widen beyond the Black Sea, including French or German grain, but there were no plans to open another office in Western Europe.
Reuters reported last year that SGM had opened offices in Kiev and Moscow.
Sierentz’s move to launch a new agricultural trading unit contrasts with a more challenged environment among major commodities players, struggling in recent years with squeezed margins stemming from years of high global grain output.
“I don’t think at all that the agricultural commodities market is over and that there is no interest anymore,” Ohayon said.
“We may even start a new era in the coming years that could be interesting. “The world needs to feed itself, world demand keeps on growing, supplies are always at risk of weather problems but the key is to have the appropriate structure.”
Sierentz already has an energy trading unit also named Sierentz Global Merchants based in the United States.
Reporting by Sybille de La Hamaide; Editing by Veronica Brown and Alexander Smith