Cargill Inc, one of the world's largest privately held corporations and a top commodities trader, will likely remain private for at least another decade, the chief executive said on Tuesday as he assessed challenges facing the 150-year old company.
David MacLennan, who has led Cargill for the past 13 months, also revealed that unrest in Ukraine had affected plans for the company's expansion in the Black Sea, a key grain-producing region. In the United States, he said new financial reform rules have made it harder for Cargill to manage risk.
The families who own Cargill leave the "vast majority" of their profits in the company to improve infrastructure and make acquisitions, and they want it to stay private, he said in a speech.
"I don't see public ownership coming anytime soon," MacLennan, 55, added.
Cargill does not have a port on the Black Sea, an export hub for corn and wheat, and wants to invest more in the region, MacLennan said. The company's board approved expansion plans in May 2014, but they were subsequently put on hold, he noted.
"You've got to be in Ukraine if you're a global food company," he said.
China, the world's fastest growing corn market, hurt Cargill when it began rejecting shipments of U.S. grain in November 2013 due to the presence of a biotech trait that had not been approved for import.
"We were right in the middle of it," MacLennan said about the rejections, adding that Cargill suffered "a lot of financial damage." He called the rejections "a seminal moment" for the company.
In September, Cargill alleged in a lawsuit against Syngenta AG that the seed maker had misrepresented when Beijing would approve the trait blamed for China's rejections. Cargill had previously said the rejections had reduced earnings.
The U.S. Dodd-Frank financial reform rules have been a "head banger" making it harder to manage risk, MacLennan said.