Gavilon in Leadership Shakeup Amid Commodities Rout

While an ongoing commodities rout takes a greater and greater toll on the ag sector, Omaha-based grain trading giant, Gavilon LLC is in the midst of a leadership shakeup as Marubeni, its parent company, was disappointed with the company’s weak performance, reports Bloomberg.

Marubeni, Gavilon's parent company, has expressed disappointment with the company’s weak performance. Marubeni chief executive, Fumiya Kokubu has said he will take drastic measures in response. As a result, Gavilon’s chief executive officer, chief operating officer, and the head of its North American grain division will be stepping down from their positions with the firm, according to Omaha.com.

Gavillon has named Lewis Batchelder to replace outgoing chief executive Jim Anderson beginning March 1, while Chris Faust was internally promoted to vice president to replace Greg Konsor, the outgoing general manager of the North American grain unit, while John Neppl, the outgoing Chief Operating Officer will not be immediately replaced.

Marubeni acquired Gavilon in 2013 in the largest transaction by a Japanese trading house to that point, for $4.6 billion including debt. However, the integration of Gavilon and Marubeni’s grain operations didn’t progress as expected, and last May Marubeni attributed its 50% decline in profits between 2013 and 2014 to poor results from its oil and grain trading activities. As a result, Marubeni had to write down $420 million in association with Gavilon, according to Omaha.com, and to enact a 50% pay cut for Gavilon’s chairman and chief executive, and a 30% pay cut for a range of other executives.

The newly appointed Gavilon CEO, Batchelder, has a forty year history in the grain industry, previously serving a vice president of agricultural services at Archer Daniels Midland Co., and also as chairman of Alfred C. Toepfer International. In addition, Mr. Batchelder has had an extensive working relationship with Marubeni, which may help facilitate the successful further integration between the two companies.