Timchenko doesnt need to be told to keep a low profile. Since co-founding Mercuria with partner Marco Dunand in 2004, the company has ballooned into one of the top four commodity trading houses in the world, turning over more than $100 billion in. It has coal mines in Kalimantan in Indonesia, oilfields in Argentina and Canada plus oil trading in Singapore, Chicago, Houston and across Europe. Grain traders welcomed our offer to lend a diplomatic hand, the ambassador wrote. Our Standards: The Thomson Reuters Trust Principles. Thats still a lot less than the billions the biggest independent oil traders make and a long way off the revenue of Marquard & Bahls oil tanking division, the second largest in the world after Vopak. When in Wichita, he often dines in the Koch cafeteria. S&P Global Platts talks to Mercuria CEO and co-founder Marco Dunand about the challenges, implications, and opportunities that the COVID-19 pandemic presents across all the key commodity classes in a time of unprecedented volatility in the global markets. In a move borrowed from the playbooks of western rivals, state-run oil firm PetroChina has set up a Houston oil trading desk and leased massive oil storage tanks in the Caribbean. He has made a fortune. The cost of running JPMorgans commodity business is too high because it comes with the expensive front-office staff and infrastructure an investment bank needs, said Oral Dawe, the former head of JPMorgans Asia-Pacific commodity business who now runs an investment-advisory company in Singapore. Standard Digital includes access to a wealth of global news, analysis and expert opinion. Despite a relative lack of regulatory oversight, such reach does attract scrutiny. In March 2014, the firm purchased JP Morgan 's physical commodities unit for $3.5 billion. Mercuria's One-Time Heir Apparent Slashed His Stake in Trader Arcadia often trades large volumes of oil from Nigeria and Yemen, where it boasts close relationships with state oil firms. We know how to close the gap (with Vitol and Glencore) and we are actively catching up, Tornqvist said. Behind the $100 Billion Commodity Empire That Few Know There were two schools for the commodity trade: the Marc Rich school with Glencore and Trafigura, which is obviously successful, then theres the investment bank school, which has more of a risk approach.. Thanks to a market condition known as contango -- a period when buyers pay more for future delivery than to receive their cargoes promptly -- they could sell futures and lock in profits of $10 a barrel or more. Driven by the rise of Brazil, China, India and other fast-growing economies, the global commodities boom has turbocharged profits at the worlds biggest trading houses. personalising content and ads, providing social media features and to Glencore has said publicly it would see good value in a merger with Xstrata, but that has so far been rejected by other, smaller, shareholders. Outside the commodities business, many of these quiet giants who broker the worlds basic goods are little known. Cargill has since placed a moratorium on buying soybeans from newly deforested land. WHO: Olam, founded 1989 by the Kewalram Chanrai Group, began trading cashews from Nigeria. Or this: publicity-shy Vitols sales of $195 billion in 2010 were twice those at Apple Inc. As well as the 200 tankers it has at sea, Vitol owns storage tanks on five continents. It helps that Olam has backing in high places: Singapore state investor Temasek holds a 14 percent stake in the trading firm. The 2022 report is the fifth annual CSR report prepared by Mercuria and the data and commentary refer to our activities in the 2022 calendar year. Dunand, chairman and chief executive, and Jaeggi, head of global trading, used Mercuria to expand their trading base from crude and oil products. Compared with other independent trading houses, Dunand and Jaeggi are high profile, speaking periodically to the press and giving regular interviews. Marco Dunand | World Economic Forum The government of Ivory Coast said 16 people died. In his only media interview, with Reuters in 2006, Lim credited his success to investment in his tanker armada -- the secret weapon that helped him set up stealthy and profitable deals in the 1990s -- and his philosophy of perseverance. Belgium-born Rich sold his stake in 1994. This gives them a strong opportunity for growth and puts them close to the top players in the league, said Roland Rechtsteiner, a partner at management consultant Oliver Wyman, whos published a series of reports on the industry written with Trafigura co-founder Graham Sharp. Top three executives lift stake in Mercuria | Financial Times Trafigura was also quick to recognize the potential of storage in the industrial metals markets. And its not just the Europeans. Theres a great deal of trust between them.. It has grown into the worlds third-largest independent oil trader and second-largest industrial metals trader in less than 20 years, since it was set up in the early 1990s by Dauphin and fellow traders Eric de Turckheim and Graham Sharp. Some analysts point to risk factors: Olams exposure to natural disasters, such as recent flooding in Australia, and social or political unrest such as that in Ivory Coast. Duo Who Built Energy Trading Empire Set Sights on JPMorgan Unit It announced in early October that it may float its storage subsidiary Puma Energy within 18 months. In his first public interview to Reuters in 2007, Gunvors Swedish co-founder Tornbjorn Tornqvist was keen to stress that the firms success was built on its traders experience and excellent contacts. A Trafigura-chartered tanker was intercepted in the Caribbean in 2001 on suspicion of carrying illegal volumes of Iraqi crude. 13 in the Fortune 500 list of publicly held companies, just behind Wall Street banking giant Citigroup. Independent traders including Mercuria are filling the void. Geography isnt the sole focus of expansion -- it has moved into naphtha, LPG and wood pellets. Heres a look at the 16 companies, with aggregate revenues of $1.1 trillion, that trade energy, metals and agriculture. A conversation with Mercuria Energy Trading's Marco Dunand Electronic Invoice exchange and reconciliation for faster payments/settlements. newsletter, Energy Source. Trading houses saw the opportunity to leverage metals warehousing after the 2008 financial crisis. Certain musicians, they have had a few hits and sort of faded away. Dunand is the more outgoing of the two founders and often serves as the firms public face, dealing with customers and developing corporate strategy. Hes well on the way. Mercuria is just seven years old, but is already one of the worlds top five energy traders. When out-of-town employees visit, he has taken them to dinner at seafood chain Red Lobster, a former Koch employee said. 2. The business has grown to 890 employees in 28 countries with a turnover at $75 billion, trading almost 120 million tonnes of oil, coal and gas. Without a commanding position in any region or commodity, the firm has sought out bottlenecks and imbalances in niche markets and positioned itself to make money trading derivatives using insights gained from its physical trading. ADM was fined $100 million by the U.S. government for antitrust violations. Chinese state funds have flowed into Noble and private Asian traders. tracking emerging trends and opportunities in the future of energy. . But they have seen interest from potential investors, and have considered a tie-up with a sovereign wealth fund. Mercuria scores record profit amid oil market chaos Jaeggi, the head of trading, operates more in the background, conceiving trading positions. Lim Oon Kuin arrived in Singapore from China over 50 years ago, and started to deliver diesel by bicycle to boatmen. Tea Party movement. In a 2009 State Department cable from Yemen, obtained by WikiLeaks and provided by a third party to Reuters, sources told U.S. diplomats that the company used intimidation tactics including kidnapping threats to buy Yemeni crude at below market prices. Trading houses have huge volumes of proprietary trading. That took the headcount to 1,200 from about 10 in 2004. The judge said there was no evidence the waste had caused anything more than flu-like symptoms and said some media had been irresponsible in their reporting. Mercuria Energy Group, Ltd. Mercuria is a Geneva, Switzerland-based trading firm focused on energy products and dry bulk commodities. Welcome to the Mercuria 2022 Corporate Social Responsibility (CSR) report. A spike in world food prices in 2007 stirred an outcry against the largest grain trading firms; when oil prices surged to a record $147 a barrel in 2008, U.S. Congress probed the role of oil trading firms, but found no smoking gun. Mercuria will dramatically reduce it, he said. They are buying and selling oil. In 2006, J+S was raided by the Polish authorities in connection with an investigation into oil trading in Poland. You were always a little worried, taking the other side of their trades, said one European oil product trader, who declined to be identified. Mercuria investit 500 millions de dollars dans Silvania, une plateforme qui financera des projets de capture de CO2 par la nature," Marco Dunand, Fondateur Directeur de Mercuria. It buys and sells multiple crops, mills and grinds and processes them into scores of products, both edible and not, and ships them to markets around the world. Belgium-born Rich joined Philipp Brothers, subsequently Phibro, aged 20, leaving in 1974 with a fellow graduate of the Phibro mailroom, Pincus Pinky Green, to set up Marc Rich and Co AG in Switzerland. Despite a concerted campaign in recent years to put forth a friendlier face and personality through advertising and more appearances by its executives in public forums, Cargill is bound together by a culture of confidentiality, aggressiveness -- and winning. In London, Trafigura reached a pre-trial settlement to put an end to a class-action suit from some 31,000 residents. WHO: Arcadia, founded 1988 by Japans Mitsui & Co. Arcadia Petroleum, the London-based oil trading firm owned by billionaire oil tanker magnate John Fredriksen, was thrust into the spotlight in May when U.S. commodities regulators sued it for allegedly manipulating U.S. oil markets in 2008. Dunand said in January the sale of an equity stake could raise $500 million to $1 billion. Brent crude rose 3.5 percent that year in a fourth annual advance. The privately owned company recorded net income of $425m in the six months to June, up more than $100m from the same period last year, according to people briefed on unaudited figures revealed. Insight Conversation: Marco Dunand, Mercuria - S&P Global Premium Digital includes access to our premier business column, Lex, as well as 15 curated newsletters covering key business themes with original, in-depth reporting. We support credit card, debit card and PayPal payments. Over the last 145 years, Cargill has grown from a single grain storage warehouse by an Iowa railroad to a behemoth of world commodities trade, straddling dozens of markets for food and other essential materials -- salt, fertilizer, metals. The top five piled up $629 billion in revenues last year, just. Lims Chinese connections have played a big part in the companys success. Result: Chinas pigs are heavier than ever and Bunge has become a key supplier to one of the fastest growing economies in the world. With African investors Helios Investment it recently paid a billion dollars to buy Shells fuel marketing operation across 14 West African countries, keeping the Shell branding. Change the plan you will roll onto at any time during your trial by visiting the Settings & Account section. Two examples: it makes biodegradable and recyclable plastics out of corn at its $1 billion complex at Blair, Nebraska, and is creating new low-calorie food ingredients for such multinationals as Kraft, Nestle and Coca Cola. Like rival Vitol, Trafigura has seized the opportunity to get into oil storage as oil majors focus on production. Founded in 2004 by Swiss traders Marco Dunand and Daniel Jaeggi. http://www.bloomberg.com/news/2014-03-07/behind-the-100-billion-commodity-empire-that-few-know.html, Disclaimer: This was news article was published by another website and was republished on the CTRM Center due to its informative merit and relative nature. Trafigura said it entrusted the waste to a state-registered Ivorian company, Tommy, which dumped the material illegally at sites around Abidjan. 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[11], Its subsidiaries include Navitas Energy in Canada[12] and Vesta Terminal Services in Europe,[13] which operates port logistics, storage and processing facilities in the Netherlands, Estonia, Belgium, and Germany. They point to very competitive pricing offered by Gunvor when it comes to Russian oil tenders. He competed fiercely with Indonesias Salim group, the business group commanded by his uncle, and won, to dominate the edible oil market in the worlds most populous nation. Known as OK Lim, the founder of Singapores Hin Leong Group wants to build the company from oil trader into an integrated company. He talked about how we are moving into action and investing in. On paper, the partial float made boss Ivan Glasenberg $10 billion richer overnight. The payout percentage of profits at the commodities houses can be double what Wall Street banks pay, says George Stein of New York headhunting firm Commodity Talent. Like Rich, Dauphin created a leading commodities trading house by applying a knife-edge approach to business. The company, which went public 10 years ago, realized early that rising incomes in Asia could be fed by Brazil and Argentina, two of the last remaining countries with new farmland left for crop cultivation. Oil at $100 a Barrel Is 'Possible' This Winter, Mercuria Says In June, it invested $50 million in a Romanian gas producer. Founded in 1818 in Amsterdam, the company is the worlds No.1 oilseed processor. Thats the setting where we learned the trade, Dunand said in an interview with Swiss newspaper Neue Zuercher Zeitung published in January. I would love for them to be listed on the stock market, said Gertjan van der Geer, who manages an agriculture fund for Swiss bank Pictet. 2022 welcome statement Marco Dunand, Mercuria's CEO, introduces the 2022 CSR report. (Additional reporting by Jean-Francois Rosnoblet), WHO: Bunge, founded 1818 by Johann Peter Gottlieb Bunge in Amsterdam. Overall Arcadia profited by $50 million in derivatives markets as oil futures spreads collapsed, according to the suit. Mabanafts profile is low even by the secretive standards of other independent oil traders. A lysine price-fixing scandal in 1993 tarred its name after three top executives were indicted and imprisoned.
