- Unconventional Ag
COFCO CEO, Matt Jansen Building for IPO
Plans have been publicly afloat for the past year about COFCO's intentions to go public. COFCO has undergone numerous shifts since rumors began circulating. Last year, Matt Jansen assumed the role of chief executive officer after former chief Frank Gaoning was named chairman of Sinochem. Earlier this year, the full acquisition of Noble Agri, now to be known as COFCO Agri, was finalized with 45 asset locations in 29 countries and sales of $17 billion last year. But the question remains, is COFCO’s strategic plan one focused on food security, or as the group looks toward a listing, profits?
In a recent interview with Financial Times, Matt Jansen explains that COFCO is indeed a company focused on becoming an “investment grade” operation in search of returns prior to going public in the medium term.
Looking forward to 2016, Jansen states that in light of a lack of commodity dislocation and volatility the sector can expect a continuation of tight margins throughout the year, however, given the uncontrollable factors that affect the sector such as weather, these trends will prove cyclical.
Indeed, despite market conditions that currently offer little opportunity for growth, Jansen notes COFCO's intention to expand its footprint into its singular lacking region - North American grain origination - as it strives to achieve a truly global presence. The group’s powerful shareholders including state-owned enterprise, Tomasek, COFCO itself, Standard Charter, Hopu, and CIC have made it known that they are awaiting the right merger and acquisition targets to be presented for consideration.
Given the nature of the group, when discussing COFCO it is nearly impossible not to also discuss China and its policies. Jansen notes that over the past ten years China has moved away from subsidizing crops such as soybeans and now corn, and he believes that this distancing from such a structure will continue for other commodities as the country depends more on global markets to set prices as it deals with high domestic stockpiles.
Click here to watch the interview in this video.