Meet The Mysterious Trading Firms Who Control The Price Of Commodities

Welcome to the real world of commodities trading. Home to firms like Vitol and Trafigura, who trade more oil than Saudi Arabia and Venezuela can produce.

In a new report, 18 Reuters’ reporters and editors profiled 16 giant commodity companies that often go unnoticed. Combined, they generate annual revenue of $1.1 trillion.  The top five pull in $629 billion, rivaling the five largest financial institutions on the planet.

What they learned: They’re massively profitable. They disrupt markets. Government’s have little ability to police them. And they have ambitious plans to grow.

WHO: Vitol, founded 1966 in Rotterdam by Henk Vietor and Jacques Detiger

WHERE: Geneva and Rotterdam WHAT: Oil, gas, power, coal, industrial metals, sugar

TURNOVER: $195 billion (2010) CEO: Ian Taylor STAFF: 2,700

On the world oil markets the name Vitol is as familiar as Exxon is at the petrol pump.

In public, for a company that turned over almost $200 billion last year trading 5.5 million barrels a day, its profile is nigh on subterranean.

But earlier this year the world’s wealthiest oil trader raised that profile, and did its reputation no harm, by becoming the first to deal with Libya’s rebels, long before the overthrow of Muammar Gaddafi.

That helped balance the reputational damage of being fined — along with many other companies — for paying surcharges a decade ago to Saddam Hussein’s Iraqi oil ministry during the U.N. oil-for-food program.

Vitol’s Saddam connection does not seem to have hurt it in Iraq. It became the first company to supply gasoline to the energy ministry after the war in 2003, and now is both a buyer of Iraqi crude and supplier of refined products.

An array of storage tanks on five continents oils the wheels of its vast trading operation and it has stepped into the gap left by the oil majors as they reduce their downstream presence to focus on upstream exploration and production.

With African investors Helios Investment it recently paid a billion dollars to buy Shell’s fuel marketing operation across 14 West African countries, keeping the Shell branding.

It has also dipped a toe in the upstream business. Together with Glencore, it pre-qualified to bid for exploration rights in Iraq in a licensing round next year that that could add the Iraqi upstream to its offshore West Africa operations.

Its early dealings with the Libyan rebels may offer the chance of a foothold in Libya’s oil and gas territory.

“Vitol’s goal was to supply the refined products and then try to pick up upstream assets in Libya,” said a western diplomatic source.

Glencore’s flotation has sparked speculation about a possible Vitol initial public offering and what it would be worth. Vitol says it is happy with its private status and has no IPO plans.

By annual revenue Vitol is richer than Glencore but the numbers aren’t directly comparable — Glencore owns more hard assets which, typically, are far more profitable than trade turnover.

Vitol’s wealth is spread across only 330 share-holding employees, fewer than Glencore’s 500. While Vitol would not comment, industry talk has it that none of its senior employees, including CEO Ian Taylor who joined from Shell in 1985 or long-timer Bob Finch who heads Vitol’s coal business, holds more than 5 percent of the company. That would put them well below the 16 percent stake Glencore CEO Ivan Glasenberg owns in his firm.

The company’s deal with Libya’s rebels was a gamble. Sanctions targeted Gaddafi. The firms now controlled by the western-backed rebels might still legally be linked to Libya’s national oil corporation. Was Vitol in violation? Lawyers said doing business with the rebels still required great care. But by the end of April, a U.S. Treasury directive authorized the Vitol transactions.

“They sail as close to the wind as they possibly can legally,” said an oil analyst who requested anonymity. “That’s the nature of their business.”

 

WHO: Glencore, founded 1974 as Marc Rich and Co. renamed Glencore in 1994

WHERE: Baar, Switzerland WHAT: Metals, minerals, energy, agricultural products

REVENUE: $145 billion in 2010 CEO: Ivan Glasenberg

STAFF: 2,800 people directly; 55,000 at Glencore’s industrial assets

Switzerland-based Glencore cast aside its famed secrecy earlier this year with a record market debut that turned its executives into paper millionaires and propelled the firm into the headlines.

Founded in 1974 by Marc Rich, who fell foul of U.S. authorities but was later pardoned by President Bill Clinton, Glencore has assets spanning the globe and an oil division with more ships than Britain’s Royal Navy. Top officials in many other large trading companies began their careers at Glencore.

The company handles 3 percent of the world’s daily oil consumption. It’s one of the largest physical suppliers of metals including zinc, lead and nickel, and a leading grain exporter from Europe, the former Soviet Union and Australia.

Though it began as a pure metals and oil trader, Glencore has bought a wealth of industrial assets since the late 1980s which now stretches from South American farmland to copper mines in Zambia.

Belgium-born Rich sold his stake in 1994.

The company’s largest shareholder is now former coal trader and Chief Executive Ivan Glasenberg, an intense and charismatic South African who holds a stake of just under 16 percent, worth around 4.5 billion pounds at current prices.

Still not entirely comfortable with his public profile, Glasenberg has described his shift into the glare of publicity as “crossing the Rubicon”. He is flanked in the top investor table by the youthful heads of Glencore’s major divisions. Together, Glencore employees, including many of its top traders, own just under 80 percent of the company.

Glencore has long made its fortune by working on the fringes and in areas where few others dared. That strategy has often succeeded, though last month it found itself at the center of a dispute in the newly minted nation of South Sudan. A row over oil export control could jeopardize its role in selling the nation’s crude.

Glencore’s initial public offering was the largest globally this year, attracting huge publicity as well as arguments that it marked the top of the commodities cycle. The shares listed at 530 pence in May but have since traded below that, dropping almost a quarter in three months.

A large part of Glencore’s market value comes from its listed stakes in other companies, most notably a 34.5 percent holding in Swiss miner Xstrata. 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.

 

WHO: Cargill, founded 1865 by William Wallace Cargill at the end of the U.S. Civil War

WHERE: Minneapolis, Minnesota WHAT: Grains, oilseeds, salt, fertilizers, metals, energy

TURNOVER: $108 billion (2010) CEO: Greg Page STAFF: 130,000

Tucked away in a private forest an hour’s drive from the downtown high rises of mid-western Minnesota stands a brick mansion that strikes most visitors the same way: isolated, solid, regal, powerful.

Inside the “lake office,” as it is known, sits the chairman of Cargill Inc., one of the largest privately held companies in the world.

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.

With global sales of $108 billion in 2010, Cargill would have ranked No. 13 in the Fortune 500 list of publicly held companies, just behind Wall Street banking giant Citigroup.

But Cargill is anything but public. 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.

“By and large they move as a team,” says one retired wheat trader who did business with Cargill for decades. “They have some superstars but mostly a lot of team players — what I would describe as well grounded, fundamental traders.”

One of their secrets: filling the empty barges headed home.

“You’ve always had grain going down the river and going through the Gulf and being exported. One of the great things that Cargill did was develop the salt business to transport back up, eliminate the snow during the wintertime, and fill barges back up with back hauls,” the wheat trader said.

“It was done a long time ago. People forget about it. But it was absolutely one of the greatest moves in the business.”

Cargill hopes to dominate new markets as well. 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.

TROUBLED PAST

At times Cargill’s power has got it into trouble. In 1937 the Chicago Board of Trade forced the company to sell its corn contracts and Secretary of Agriculture Henry Wallace accused it of trying to “corner” the U.S. corn market. In 1972 Cargill came under attack as it secretly sold millions of tonnes of wheat to Russia, using a U.S. export subsidy program to boot — and boosting food inflation.

It helps that the firm usually has the backing of Washington. In early 2007, when world grain prices were surging toward all-time highs, it faced a problem in Ukraine. Citing concerns over potential shortages and rising bread prices, Kiev had placed export quotas on cash crops and temporarily stopped granting export licenses for corn, wheat, barley and other grains.

Cargill, as well as fellow U.S. commodity trading firms Bunge and ADM, “agreed to undertake a public relations effort with the goal of creating a political problem for the Government of Ukraine”, according to a 2007 diplomatic cable by the U.S. ambassador to Ukraine that was obtained by WikiLeaks and made available to Reuters by a third party.

To achieve this, “it would be necessary to recruit the (Ukrainian) farmers to take an active role. This would be a challenge, since small farmers were unorganized, and most had already cashed in their crops by selling to the traders early… Grain traders welcomed our offer to lend a diplomatic hand,” the ambassador wrote.

Asked to comment, Cargill said the company actively backs free trade to boost agriculture in all countries and “is in dialogue with many important audiences, including governments… Additionally, we don’t believe export bans are the solution to either high grain prices or price volatility.” ADM declined to comment and a spokesman for Bunge could not be reached.

 

WHO: Koch Industries, founded 1920s by Fred Koch

WHERE: Wichita, Kansas

WHAT: Oil TURNOVER: $100 billion (2010)

CEO: Charles Koch STAFF: 70,000

Founded in the 1920s by patriarch Fred Koch, a U.S. engineer who developed a new method of converting oil into gasoline, Koch helped to build a refining network in the Soviet Union in the 1930s. Fred Koch returned to the United States with a visceral hatred for Joseph Stalin and communism. A fiercely libertarian ideology and ultra-competitive engineering prowess live on at Koch Industries’ spartan headquarters in Wichita, Kansas, a former Koch executive told Reuters.

With around $100 billion in sales, Koch Industries is a heavyweight among U.S. oil trading firms, and one of the most secretive U.S. corporations. Investors can forget about buying shares in the wildly profitable, family-run firm any time soon.

In oil markets, Koch is a brutally efficient middleman. A master of physical markets, it owns a 4,000-mile U.S. pipeline network and three of the country’s most profitable refineries. Many small producers rely almost entirely on Koch to buy, sell and ship their crude. The company now operates in 60 countries.

The Koch brothers, Chairman and CEO Charles and co-owner David Koch, are high-profile supporters of libertarian and anti-regulation U.S. politics. Among their campaigns is one to end the U.S. Environmental Protection Agency’s mandate for regulating greenhouse gas emissions. A profile in the New Yorker magazine last year identified the brothers as behind-the-scenes operators who bankroll the U.S. Tea Party movement. The Kochs have denied funding the Tea Party, but their empire’s far-reaching tentacles in the political arena have spawned a nickname: the ‘Kochtopus’.

The firm’s traders, according to two industry sources, made a fortune for Koch in 2009-10 during a contango in U.S. oil markets — a period when oil for future delivery was higher priced than immediate cargoes. Koch moved quietly to lead a boom in U.S. offshore crude storage, buying millions of barrels at cheap spot prices, parking them in supertankers near its Gulf Coast pipelines, and simultaneously selling into futures markets.

With Koch’s easy access to tankers and pipelines, the strategy locked in profits of up to $10 a barrel with virtually no risk, traders said. When spot and futures prices began to converge, Koch would quietly slip crude from the ships into its onshore pipelines. Koch declined to discuss its trading with Reuters.

Former Koch employees were implicated in improper payments to secure contracts in six foreign countries between 2002 and 2008, and the company’s officers admitted in a letter made public by a French court last year that “those activities constitute violations of criminal law”, according to a report in Bloomberg Markets Magazine this month. The report also details sales by a foreign Koch subsidiary of petrochemical equipment to Iran, which is subject to U.S. sanctions, and a history of criminal or civil penalties for oil spills, a deadly 1996 U.S. pipeline blast, and under-reporting of emissions of benzene, a carcinogen, from a Texas refinery in 1995.

On its website Koch said it dismissed several employees of a French subsidiary upon learning of the improper and unauthorized payments. It also said its foreign units had ended sales to Iran “years ago”, and did not violate U.S. law by conducting business with Iran earlier. Koch said its 90s-era pipeline blast was “the only event of its kind” in the company’s history, and that a report to Texas regulators was voluntarily submitted by the company in 1995 to reflect higher emissions than it had originally reported. Koch eventually pleaded guilty in 2001 to a felony charge related to its reporting of the benzene emissions.

The firm’s far-ranging industrial interests also include chemicals, forestry, ethanol, carbon trading and ranching. Its huge lobbying budget in Washington — estimated at $10.3 million a year in a recent investigation by the Center for Public Integrity — stands in contrast to Charles Koch’s frugal demeanor within the firm.

The CEO sometimes flies to speaking engagements with no entourage. When in Wichita, he often dines in the Koch cafeteria. When out-of-town employees visit, he has taken them to dinner at seafood chain Red Lobster, a former Koch employee said. “But make no mistake, if you perform well at Koch, you are richly rewarded in salary terms,” the person added. “And if you don’t, you’re out of there fast.”

 

WHO: ADM, formerly Archer Daniels Midland, founded 1902 by John Daniels and George Archer

BASED: Decatur, Illinois

TADES: Grains, oilseeds, cocoa

TURNOVER: $81 billion (2010)

CEO: Patricia Woertz STAFF: 30,000

“Corn goes in one end and profit comes out the other.”

That comment, by Matt Damon’s character Marc Whitacre in the 2009 corporate scandal film “The Informant”, described how U.S. agricultural firm Archer Daniels Midland Co. turned grain into gold. The line may be simplistic but it’s not too far from the truth.

Decatur, Illinois-based ADM is one of the world’s biggest commodities traders. 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.

A small Minnesota linseed crushing business more than a century ago, the firm is now is so big its financial performance is often viewed as a barometer of agribusiness as a whole. It owns processing plants, railcars, trucks, river barges and ships. It has trading offices in China, palm plantations and chemical plants across Asia, and silos in Brazil.

“We have a system that monitors the supply and demand needs, because often times they are working independently. For us in the middle, we have the ability then to manage the commodity risk that can be created by the timing differences between those buys and sells,” said Steve Mills, ADM’s senior executive vice president for performance and growth.

“You’ll hear things through the marketplace or the wire services that it’s raining someplace or not raining someplace and we’ll have people on the ground saying ‘I don’t know what you’re talking about’ … The futures market may take some of that information and run with it. One of the things that gives us an advantage is that we’re working in the physical markets as well so (we can) absorb all that information and make the calls.”

But ADM’s reputation has endured a black eye or two over the years.

A lysine price-fixing scandal in 1993 tarred its name after three top executives were indicted and imprisoned. ADM was fined $100 million by the U.S. government for antitrust violations. The incident was the subject of “The Informant”, filmed on site in Decatur.

ADM’s environmental record has also been questioned by the Environmental Protection Agency, resulting in fines and forced installation of pollution control measures.

 

WHO: Gunvor, founded 1997 by Swedish oil trader Torbjorn Tornqvist and Russian/Finnish businessman Gennady Timchenko

WHERE: Geneva

WHAT: Oil, coal, LNG, emissions

TURNOVER: $80 billion 2011, company estimate ($65 billion 2010)

CHAIRMAN: Torbjorn Tornqvist

STAFF: Fewer than 500

When it comes to his critics, Vladimir Putin is a heavyweight puncher. Yet it took Russia’s most influential politician almost a decade to publicly address one of the most serious allegations against him.

Critics, including the Russian opposition, put it simply — Russia’s paramount leader helped businessman Gennady Timchenko create the Gunvor oil trading empire, which saw a spectacular rise in the past decade when Putin was president and then prime minister.

Putin finally broke his silence last month: “I assure you, I know that a lot is being written about it, without any participation on my part.

“I have known the citizen Timchenko for a very long time, since my work in St Petersburg,” Putin told a group of Russian writers. Putin worked in the mayor’s office in the early 1990s when Timchenko and his friends, Putin said, spun off an oil trading unit of the Kirishi oil refinery.

“I never interfered with anything related to his business interests, I hope he will not stick his nose into my business either,” Putin said.

Timchenko doesn’t need to be told to keep a low profile. He is one of Russia’s most private tycoons. And his silence helped feed rumors about Gunvor’s remarkable growth.

In 2011 the company will turn over $80 billion, up from just $5 billion in 2004. In his first public interview to Reuters in 2007, Gunvor’s Swedish co-founder Tornbjorn Tornqvist was keen to stress that the firm’s success was built on its traders’ experience and excellent contacts.

“But … to involve Mr Putin and any of his staff in this dialogue is speculation,” he added. That comment didn’t help calm rumors and then Timchenko spoke too.

After a newspaper interview he wrote an open letter in 2008 headlined “Gunvor, Putin and me: the truth about a Russian oil trader”.

“It is true that I, together with three other businessmen, sponsored a judo club where Mr Putin became honorary president,” he wrote. “That is as far as it goes — yet time and again, the media wrongly jump to the conclusion that the judo club connection means that Mr Putin and I are ‘close’, then leap into conspiracy-theory mode.”

Tornqvist, a former BP trader and keen yachtsman, says he doesn’t share the vision of Mark Rich, the father of contemporary trading, that political links are the most prized asset in trading.

“If you don’t offer competitive terms, no one will work with you,” he told a Russian daily this month. For Gunvor’s rivals, too, favoritism is also an overly simple explanation of the company’s success. They point to very competitive pricing offered by Gunvor when it comes to Russian oil tenders.

Gunvor’s oil dominance has waned in the past two years — it is handling around a fifth of Russian seaborne oil exports, down from a third three years ago. Perhaps to make up for that, it has moved into new sectors such as natural gas, coal and emissions.

Tornqvist says Gunvor’s goal is to become a truly global company. “We know how to close the gap (with Vitol and Glencore) and we are actively catching up,” Tornqvist said. Like Vitol, he says, Gunvor has no plans to follow Glencore into an IPO.

 

WHO: Trafigura, founded 1993 by former Marc Rich traders Claude Dauphin, Eric de Turkheim and Graham Sharp

WHERE: Geneva, Switzerland

WHAT: Oil, metals

TURNOVER: $79 billion (2010)

CHAIRMAN: Claude Dauphin

The godfather of oil trading, Marc Rich, taught one of his most talented apprentices Claude Dauphin almost every trick in the business. Like Rich, Dauphin created a leading commodities trading house by applying a knife-edge approach to business. He has made a fortune.

But there was one lesson that Rich must have cut short: how to avoid jail. While Rich himself fled to Europe in the 1980s to escape possible imprisonment for tax evasion in the United States, Dauphin spent almost six months behind bars in Ivory Coast in 2006-7 in pre-trial detention involving a dispute over toxic waste dumping.

Shortly after the material was dumped, thousands of residents of the city of Abidjan complained of illnesses, including breathing problems, skin irritation and related ailments. The government of Ivory Coast said 16 people died. The material was dumped in open-air sites around Abidjan in August 2006 after being unloaded from a Trafigura-chartered tanker.

Trafigura said it entrusted the waste to a state-registered Ivorian company, Tommy, which dumped the material illegally at sites around Abidjan.

“We went to the Ivory Coast on a mission to help the people of Abidjan, and to find ourselves arrested and in jail as a result has been a terrible ordeal for ourselves and our families,” said Dauphin.

Trafigura paid a $200 million settlement and the country’s prosecutor declared that there was no evidence of any illegality or misconduct by any Trafigura company or staff.

In London, Trafigura reached a pre-trial settlement to put an end to a class-action suit from some 31,000 residents. 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.

The scandal has hardly hampered the firm’s stellar growth.

It has grown into the world’s 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.

Like rival Vitol, Trafigura has seized the opportunity to get into oil storage as oil majors focus on production. It announced in early October that it may float its storage subsidiary Puma Energy within 18 months.

Trafigura was also quick to recognize the potential of storage in the industrial metals markets. It bought UK-based metals warehouser and logistics firm NEMS in March 2010, a month after Goldman Sachs had acquired rival Metro and several months before Glencore and JP Morgan moved into the business.

WHO: Mercuria, founded in 2004

WHERE: Geneva

ENERGY TURNOVER: $75 billion 2011 company estimate (2010, $47 billion)

CEO: Marco Dunand

Mercuria is just seven years old, but is already one of the world’s top five energy traders.

Headquartered in Geneva, Switzerland, and named after Mercury, the god of merchants, Mercuria’s business straddles global energy markets.

It has coal mines in Kalimantan in Indonesia, oilfields in Argentina and Canada plus oil trading in Singapore, Chicago, Houston and across Europe.

Its meteoric growth has been piloted by a couple of the sharpest minds in commodities.

Marco Dunand and Daniel Jaeggi, both Swiss, have worked together closely for more than 25 years in a string of commodities companies, buying and selling crude and oil products in many of the hottest oil trading outfits: Cargill, Goldman Sachs’ J.Aron, Salomon Brothers’ Phibro and Sempra.

In two decades of oil trading, Dunand and Jaeggi built fearsome reputations for seeing profit margins where others could only see potential losses. They were early dealers in a range of financial derivatives that are now commonplace and brought a level of sophistication to their trading books that most of their competitors could often only envy.

“You were always a little worried, taking the other side of their trades,” said one European oil product trader, who declined to be identified.

NETWORK

Compared with other independent trading houses, Dunand and Jaeggi are high profile, speaking periodically to the press and giving regular interviews.

Their move to run their own empire came in 2004 when they founded Mercuria, raising capital from two Polish businessmen, Grzegorz Jankielewicz and Slawomir Smolokowski.

Jankielewicz and Smolokowski’s company, J+S Group, traded Russian crude oil and was a leading supplier of oil to PKN Orlen, Poland’s top oil refiner.

In 2006, J+S was raided by the Polish authorities in connection with an investigation into oil trading in Poland. J+S denied any wrong-doing and suggested the investigation was politically motivated. No suggestions of wrong-doing were leveled against Dunand or Jaeggi.

Dunand, chairman and chief executive, and Jaeggi, head of global trading, used Mercuria to expand their trading base from crude and oil products.

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.

NO IPO, YET

Dunand says he and Jaeggi have no intention of selling the company they have built so swiftly, or launching an initial public share offering (IPO). But they have seen interest from potential investors, and have considered a tie-up with a sovereign wealth fund.

“We are not thinking about an IPO — but that doesn’t mean we don’t have an open mind,” Dunand told Reuters in June. “We are keen to consolidate our culture before we could think about changing it. Having said that, we have also been approached by potential investors — sovereign funds and others — who wish to make a private-equity type of investment in our company.”

Dunand and Jaeggi are Mercuria’s largest shareholders but an employee share ownership scheme holds around 40 percent of the company. “We don’t see the need to raise money from the market,” Dunand said.

WHO: Noble Group, founded 1986 by UK scrap metal man Richard Elman

WHERE: Hong Kong

WHAT: Sugar, coal, oil

TURNOVER: $57 billion (2010)

EXECUTIVE CHAIRMAN: Richard Elman

STAFF: 11,000

Founded 25 years ago by Briton Richard Elman, the Hong Kong-based, Singapore-listed Noble Group buys and sells everything from Brazilian sugar to Australian coal.

Noble’s shareholders include China’s sovereign wealth fund, China Investment Corp., which bought an $850 million stake in 2009, and Korean Investment Corp., which has a minority stake.

Elman, the company’s chairman, holds around 30 percent of the company. After dropping out of school he began his career at 15 in a metals scrap yard in the UK. He spent time trading metal in Hong Kong before moving to New York and a stint at commodities trading giant Phibro. Back in Hong Kong, he traded commodities with China in the 1970s and was the first to sell China’s Daqing crude oil to the United States.

Noble has grown by acquiring troubled competitors. In 2001, for instance, it bought storied Swiss company Andre & Cie, once one of the world’s top five grains traders. Finding itself with a big client base, but short of the physical supplies it needed to meet demand, Noble built its own processing facilities. It’s a model it has replicated across various commodities.

Noble is now seeking to spin off its agriculture business with a listing on the Singapore Exchange. The grains business accounts for a third of its earnings and could have a value of more than $5 billion. Wall Street heavyweight JP Morgan is advising Noble on the planned listing.

The company’s early forays into trading gas and oil left it with a black eye. Noble quit its global liquefied petroleum gas (LPG) operations in 2010, a year it was censured in Nigeria for discrepancies in gasoline shipping lists. Nigeria’s Petroleum Product Pricing Regulatory Agency (PPPRA) said that in one transaction the amount of fuel submitted for subsidies did not match the actual quantity delivered. The company did not comment publicly on this incident.

And it sounded a rare retreat this week when sources close to the company said it had shut its European coal trading operations to focus on Asia and trading.

The China connection continues. In April Noble appointed Li Rongrong, former chairman of the state-owned assets supervision and administration commission of China, as a non-executive director.

PRIVATE FIRM, PUBLIC SPAT

WHO: Louis Dreyfus, founded 1851 by Leopold Louis-Dreyfus

WHERE: Paris WHAT: Cotton, rice, grains, orange juice

TURNOVER: $46 billion (2010)

CEO: Serge Schoen STAFF: 34,000

In the two years since Margarita Louis-Dreyfus inherited control of the world’s top cotton and rice trader following the death of her husband Robert, the woman the French press call “the tsarina” has been at the center of one of the most intriguing struggles in corporate Europe.

Analysts and commentators focused on differences between the forty-something, Russian-born Margarita Louis-Dreyfus and chief executive Jacques Veyrat over how to develop the 160-year-old family firm and whether to list its shares or seek a merger deal.

The winner? The tsarina, or MLD, as the press sometimes also calls her. In April, she and Veyrat told business daily Les Echos that the CEO would be stepping down to make way for Serge Schoen, head of Louis Dreyfus Commodities.

The very public power struggle was all the more remarkable because the company normally keeps everything, from its precise earnings to the exact age of its main shareholder and chairwoman, a secret.

Louis Dreyfus is a well-honed global operator, marketing agricultural commodities from wheat to orange juice. But most analysts think it needs fresh capital to grow, or to buy out minority family shareholders who will have the option to sell their stakes in 2012.

Unsuccessful talks have taken place with Singaporean commodities group Olam International Ltd, while bankers say they have been sounded out about a stock market listing.

Margarita Louis-Dreyfus told Les Echos that a listing, merger or the entry of a private investor were all options. But there’s little room for maneuver: the majority stake she inherited is locked up in a trust her husband set up to last for 99 years.

“There is no ideal solution. What matters is that the group and its name survive,” she said.

In the wake of Glencore’s listing this year, there is interest in another big trading house going public; investors want exposure to long-term demand for commodities.

“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. “Cargill and Louis Dreyfus are the large missing players in the commodity trading space.”

It doesn’t look likely anytime soon. “There is no rush, the company has been private for 150 years so there is no specific timing for changing the shareholding structure,” one source close to the company said.

A management shake-up this year at France’s most popular football club, Olympique Marseille, offers more proof of Margarita Louis-Dreyfus’ determination to defend her husband’s legacy and impose hard financial choices.

While pursuing Robert Louis-Dreyfus’ passion for the club, which drained millions from his fortune, she has placed strict conditions on new investment.

“Olympique Marseille is at a crossroads,” she told supporters in a statement to announce the changes at the club. It’s a message that could apply just as well to the Louis Dreyfus group.

REUTERS