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Bunge CEO Sees Optimization Plan in Place by Mid-2020

Mario Parker
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Bunge CEO Sees Optimization Plan in Place by Mid-2020

(Bloomberg) -- Bunge Ltd. Chief Executive Officer Greg Heckman expects the agribusiness giant to have most of its major turnaround initiatives completed by the middle of next year.

Since taking the helm in January, Heckman has overhauled management, centralized trading activities and formed a biofuel venture with BP Plc. Last week, he announced plans to move Bunge’s headquarters to St. Louis from White Plains, New York.

Rather than a mere cost-cutting measure, the move to St. Louis is an efficiency play given the Missouri inland port city’s strong agricultural ties, Heckman said in his first interview as Bunge CEO. It’s all part of his push to defend margins amid fast-changing policies and markets.

“If you don’t make a decision in this industry you’re making a decision,” he said by telephone. “The velocity of what’s happening in the world with crops coming off multiple times during the year and foreign exchange and government policy and all of the things you can’t control, you really have to make decisions around the things that you can.”

Back in February, when Heckman was laying out his vision for the company, he said he wanted to optimize Bunge’s sprawling portfolio to focus on businesses where it can “win.” In Tuesday’s interview, he said moves aren’t one-time and are made with an eye toward having the company execute simpler and with more transparency going forward. That should drive performance and shareholder value.

Heckman was brought in to the 201-year-old firm as part of an arrangement with activist investors D.E. Shaw and Continental Grain after dwindling returns and valuations drew takeover interest from rivals Archer-Daniels-Midland Co. and Glencore Plc.

Bunge has beaten earnings estimates in the past two quarters and its shares have outperformed those of ADM this year. But Heckman continues to navigate a tough environment. Over the past year, trade and weather disruptions have added further uncertainty to oversupplied crop markets.

“The U.S.-China trade situation, it’s just not clear how that’s going to play out,” he said, reiterating the firm’s view that second-half results would be weighted toward the fourth quarter. “Then you add on top of that some of the unrest really globally around developing markets and currency.”

(Updates with CEO comments in fifth paragraph.)

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Reg Gale

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