Wednesday 16 January 2019 5:24 pm | Updated: Monday 03 June 2019 3:40 am

Global trader Louis Dreyfus to exit dairy sector as part of strategic overhaul

Louis Dreyfus Company (LDC), one of the world's biggest agricultural commodity traders, announced today that it will exit its dairy business by mid-2019.

The company, majority-owned by Russian-born heiress Margarita Louis-Dreyfus, has already separated the dairy business from the rest of its operations and intends either to wind down the division or find a buyer.

The move is part of the agricultural giant’s efforts to divest non-core assets and focus on key sectors such as grains, freight, coffee and cotton.

The company said dairy business accounts for about one per cent of revenues and demands significant working capital resources.

Dairy “was identified as non-core in 2017 due to its lack of critical mass within the company’s portfolio”, said Federico Cerisoli, LDC’s chief financial officer.

“The exit will have practically no impact on our global sales, which continue to grow overall, and is expected to have a slight positive effect on our working capital from 2019 onwards,” he added.

The company has already divested its metals business and its fertilizers division as part of its strategy to reshape the business and said it plans to expand its food innovation capability, with the aim of sustainably meeting the needs of the world’s growing population.

Margarita Louis-Dreyfus wrested control of LDC from some of her family members late last year following a long-running shareholder dispute.

LDC, which delivered sales of $18.8bn (£14.6bn) last year, entered the dairy sector in 2009 and supplies milk powders, lactose and whey products around the globe, including in Asia, Mexico and North America.

Following the exit, LDC’s only exposure to dairy will be a non-controlling stake in a processing plant in Australia.