Bunge Limited

Bunge Limited is an American agribusiness and food company, incorporated in Bermuda,[2] and headquartered in St. Louis, Missouri, United States.

Bunge Limited
TypePublic
NYSE: BG
Russell 1000 Component
IndustryFood processing
Founded1818 (201 years ago)
FounderJohann P. G. Bunge
HeadquartersSt. Louis, Missouri, US
(operational headquarters)
Bermuda
(legal domicile)
Area served
Worldwide
Key people
Kathleen Hyle
(Chairman)
Greg Heckman
(CEO)
ProductsList of products
RevenueUS$ 45.743 billion (2018)
Number of employees
32,000 (2017)[1]
WebsiteBunge.com

As well as being an international soybean exporter, it is also involved in food processing, grain trading, and fertilizer. It competes with Cargill and Archer Daniels Midland. The company has approximately 32,000 employees in 40 countries.[1]

History

Formation and listing

Bunge & Born was founded in 1818 by Johann Peter Gottlieb Bunge in Amsterdam, it was relocated to Antwerp by Edouard Bunge in 1859. Edouard's brother; Ernest Bunge, took the Bunge name to Argentina in 1884, and in 1905 the business extended to Brazil and later on to the United States. The company was converted into the Bermuda-registered Bunge International in 1994, retaining the Bunge y Born name only in Argentina. Bunge remained a privately held company of 180 shareholders (including the longtime controlling family interests) and divested itself in 1998 of almost all its retail foods interests in favor of a greater role in international agribusiness and commodity markets; by then the company's gross annual turnover had reached US$13 billion.[3] Bunge ultimately went public on the New York Stock Exchange in 2001, becoming Bunge Limited.

In 1994, the Bermuda-registered Bunge International was created as the main company in which the families had shares. There were around 180 shareholders—the main families were Hirsch, Bunge, Born, Engels, and De La Tour. This replaced the older structure in which individual shareholders had stakes in all the different Bunge companies. Now only in Argentina does the Bunge y Born name still exist.

The New York Stock Exchange on August 4, 2011, when Bunge celebrated the 10th anniversary of its listing on the exchange.

In 2001, under the leadership of Alberto Weisser,[4] Bunge was listed on the New York Stock Exchange. Through their three businesses—agribusiness, fertilizer, and food products—they have established a leading global presence in the farm-to-consumer food chain. Bunge is the world's largest oilseed processor, the world's number one seller of bottled vegetable oil to consumers and the largest producer and supplier of fertilizers to farmers in South America.

Acquisitions

In 2004, Bunge acquired Cereol, parent of oilseed companies Central Soya and CanAmera Foods.[5] In 2008, Bunge acquired Walter Rau, a margarine company, from Germany.[6] In 2009, Bunge acquired the margarine business from Raisio Group, maker of functional food ingredients.[7] In 2017, Bunge announced intentions to acquire a 70% stake in IOI Loders Croklaan for $946 million from Malaysian palm oil producer IOI Corp Berhad.[8]

Brazilian sourcing protests

In 2012, Bunge came under criticism from NGO Survival International[9] for sourcing its sugarcane from the ancestral land of the Guaraní people in Brazil. It has been reported by the tribe that crop production has brought pesticides and machinery that has damaged their health, as well as restricting them to a small area that has prevented them from hunting and practicing their traditions. Also, in January 2003, opposition from the tribe had led to the killing of their chief Marcus Vernon by ranchers.[10] In 2012, survivors were requesting Bunge follows the example of the company Raízen, which agreed to stop the sourcing of sugarcane from the area.[11]

Recent

In May 2017, Glencore in Switzerland began pursuing the acquisition of Bunge.[12] In early June 2017, Bunge hired advisers to help it fend off Glencore's takeover interest.[13] In January 2017, Archer Daniels Midland agreed to sell its crop risk services (insurance) unit to Validus Holdings for $127.5 million.[14] On January 19, 2018, it was reported that Archer Daniels Midland had approached Bunge Ltd. about a takeover, with details "unclear." At that point, Bunge had a market value of about $9.8 billion, and was still being pursued by Glencore.[12]

In 2019, Bunge relocated its global headquarters from White Plains, New York, to the St Louis metropolitan area in 2020, where the company had its US headquarters.[15]

In April 2020, Bunge announced it agreed to sell 35 U.S interior grain elevators to Zen-Noh Corporation.[16] The completion of the sale is subject to regulatory approval and is expected to close in Q4 2020 or Q1 2021.

Products

The company's operations include:[1]

  • originating oilseeds and grains from the world's primary growing regions and transporting them to customers worldwide;
  • crushing oilseeds to make meal for the livestock industry and oil for the food processing, food service and biofuel industries;
  • producing bottled oils, mayonnaise, margarines and other food products for consumers;
  • crushing sugarcane to make sugar, ethanol and electricity;
  • milling wheat and corn for food processors, bakeries, brewers and other commercial customers; and
  • selling fertilizer to farmers.

Environmental record
See also: Gran Chaco § Conservation issues

In 2006, the United States Environmental Protection Agency filed charges against Bunge company regarding pollution emissions.[17] This involved twelve soybean processing plants and corn mills in eight states throughout the US. The lawsuit claimed Bunge violated the Clean Air Act by constructing major modifications that increased emissions. Bunge was required to implement engineering changes and pollution control projects, estimated to cost $12 million, to reduce emissions at the facilities by 2,200 tons a year. The settlement also called for Bunge to pay a cash penalty of $625,000 and to spend $1.25 million to fund community-based environmental projects selected by and to be supervised by the impacted states.[18] The state of Kansas will receive $22,000 of the $625,000 civil penalty, this being issued by the Kansas Department of Health and Environment.[19]

Biofuel production

In November 2005, Bunge created a Europe production joint venture biodiesel with French company KBBV and Diester Industrie. The new company received the name Diester Industrie International. The joint venture will produce biodiesel in Germany, Austria and Italy. The total capacity of the plants will reach 430 thousand tons biodiesel per year.

Corporate governance

As of 05 Feb 2020

  • Gregory Heckman, CEO, Bunge Limited
  • Aaron Buettner, President, Bunge Loders Croklaan
  • Brian Zachman, President, Global Risk Management
  • Christos Dimopoulos, President, Global Supply Chains
  • Raul Padilla, President, Global Agri Operations
  • Deborah Borg, EVP & Chief HR and Communications Officer
  • John Neppl, EVP & CFO
  • Josef Podwika, EVP & General Counsel
  • Pierre Mauger, Chief Transformation Officer
  • Robert Coviello, SVP Sustainably & Government Affairs
  • Robert Wagner, CRO

Tax dodging

A noteworthy case of transfer mispricing came to light in 2011 in Argentina involving the world’s four largest grain traders: ADM, Bunge, Cargill and Louis Dreyfus Company. Argentina’s revenue and customs service began an investigation into the four companies when prices for agricultural commodities spiked in 2008 and yet very little profit for the four companies had been reported to the office. As a result of the investigation, it was alleged that the companies had submitted false declarations of sales and routed profits through tax havens or through their headquarters. In some cases, they were said to have used phantom firms to buy grain and had inflated costs in Argentina in order to reduce the recorded profits earned in the country.[20] According to the country’s revenue and customs service, the outstanding taxes amounted to almost USD 1 billion.[21] The companies involved have denied the allegations. To date, the Argentinian tax authorities have not replied to the Swiss NGO Public Eye’s request regarding the current state of the case.[22] In its 2018 annual report to the US Securities and Exchange Commission (SEC), Bunge mentioned provisions which suggest that the case is still ongoing: “[A]s of December 31, 2018, Bunge’s Argentine subsidiary had received income tax assessments relating to 2006 through 2009 of approximately 1,276 million Argentine pesos (approximately $34 million), plus applicable interest on the outstanding amount of approximately 4,246 million Argentine pesos (approximately $113 million]).”[23]

See also

References
  1. "Agribusiness - Food Production Company - Bunge". bunge.com.
  2. "Bunge Limited, a company incorporated under the laws of Bermuda ( for Bunge (BG)". wikinvest.com.
  3. Clarín: La retirada final del grupo Bunge & Born (in Spanish) Archived copy
  4. Talati, Sonia (September 17, 2016). "UBS: New Boss, New Mission". Barron's.
  5. "Bunge Limited to Acquire Ft. Wayne's Central Soya". insideindianabusiness.com. Archived from the original on 2013-09-07.
  6. FoodNavigator.com. "Bunge acquires controlling stake of German oil supplier Walter Rau". FoodNavigator.com. Retrieved 2017-09-12.
  7. "Archived copy". Archived from the original on 2011-05-04. Retrieved 2010-11-08.CS1 maint: archived copy as title (link)
  8. "Bunge to buy 70 percent stake in IOI Corp unit for $946 million". Reuters. 2017-09-12. Retrieved 2017-09-12.
  9. Survival International. "US food giant accused over biofuel 'tainted with Indian blood'". survivalinternational.org.
  10. Ryan Villarreal (8 December 2012). "Deadly Ethanol: Brazil's Sugarcane Farms Take Toll On Indigenous People". International Business Times.
  11. Survival International. "Shell scraps controversial biofuels plan after Brazilian Indian protest". survivalinternational.org.
  12. Bunge, Jacob; Mattioli, Dana (January 19, 2018). "ADM Has Made Takeover Approach to Bunge Ltd". The Wall Street Journal. The New York Times, New York City, United States. Retrieved January 21, 2018.
  13. Hume, Neil; Fontanella-Khan, James (June 4, 2017). "Bunge hires JPMorgan and Shearman & Sterling in Glencore defence". Financial Times. United Kingdom. Retrieved June 5, 2017.
  14. "Deals of the day-Mergers and acquisitions". Reuters. January 31, 2017. Retrieved 2019-09-08.
  15. "Bunge Global Headquarters to Move to St. Louis | Bunge". www.bunge.com. Retrieved 2019-09-02.
  16. "Bunge agrees to sell 35 U.S. grain elevators | Bunge". www.bunge.com. Retrieved 2020-05-06.
  17. "Bunge North America Inc". lawyersandsettlements.com.
  18. "10/26/2006: $13.9 Million Clean Air Act Settlement with Multinational Soybean and Corn Processor Secures Major Pollution Reductions in Eight States - Settlement Expected to Eliminate More than 2,200 Tons of Harmful Emissions Annually". epa.gov.
  19. "FindArticles.com - CBSi". Archived from the original on 2008-09-27.
  20. Lawrence, Felicity (2011-06-01). "Argentina accuses world's largest grain traders of huge tax evasion". The Guardian. ISSN 0261-3077. Retrieved 2019-08-01.
  21. Bloomberg (2013-03-25). "Grain Exporters Owe Argentina 951 Million in Taxes". Retrieved 1 August 2019.
  22. Public Eye (June 2019). "Agricultural Commodity Traders in Switzerland" (PDF). Retrieved 1 August 2019.
  23. "Bunge Ltd (BG) 10K Annual Reports & 10Q SEC Filings". Last10K. Retrieved 2019-08-01.
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