A Conversation with Greg Heckman – CEO Bunge
Greg Heckman grew up in Cerro Gordo, IL – a farming community of 1,200 people 13 miles from Decatur. He studied Agricultural Economics at the University of Illinois and took a job with ConAgra as a trainee trader. He spent 24 years with ConAgra, becoming CEO when he took the commodities businesses private in 2008, renaming it Gavilon. He remained as CEO of Gavilon until he retired in 2015.
Greg joined the Bunge board in 2018 and became CEO of Bunge in 2019.
When you first joined the grain business did you ever imagine that you would end up as CEO of an ABCD?
No, I never really looked that far ahead. The team and I took on the challenge that was in front of us, conquered it and then looked for the next hill to climb. The rest of it kind of takes care of itself.
I do love leading teams though, I really enjoy putting people in the best position to succeed, putting them in a role that is their highest best use for the organization while also being a place they can continue to develop. Seeing them be successful and do more by working together than they every imagined possible.
I also really enjoy seeing people’s success enable them to do the things they want for their families – like buying homes and educating their kids and spending quality time together with family.
What are your biggest challenges in being CEO of an ABCD?
The current global environment is my biggest challenge. The industry has been overbuilt and needs some consolidation. Technology is changing rapidly and Ag and Food have been slow adopters. In addition, consumer trends are evolving and changing rapidly.
The industry has been built on what we expected to be continued globalization and open, fair and free trade. However, we have been experiencing a move back to nationalism recently, which is causing major trade flow disruptions.
You recently launched a strategic review of your business. This has led to rumours that Bunge might exit grain and oilseed trading to concentrate on higher value-added businesses. How would you respond?
We are looking at everything in our business to ensure we are creating shareholder value.
That being said, there will continue to be volume growth in agricultural commodities to feed a hungry world, and the majority of that supply volume growth won’t be where the demand volume growth happens.
We also have a global processing infrastructure to feed and support. We are the #1 Global Soy Crusher, we have an excellent soft seed crushing franchise and a strong wheat milling franchise in S. America, and wheat and corn milling in N. America.
Our newest business is our acquisition of Loders Croklaan, which has given us an excellent platform to value-add our fats and oils output from our crushing.
Bunge appears to be navigating the trade wars reasonably well. Do they remain a threat to your business model?
Absolutely, these businesses were built believing free, open and fair trade would continue to drive globalization. This is what needs to happen to feed a hungry world in the most low cost and sustainable way. Allowing crops to be grown in the areas with the most comparative advantage, and move in the most low cost value chains to where they need to be processed and ultimately consumed.
Investors in publicly quoted companies look for steady growth, but G&O trading is cyclical. How do you resolve that contradiction?
We are much more than a trader and distributor of agricultural commodities. We do need to continue to build out our diversification, which will lower our volatility of earnings and dampen some of the cyclicality.
The other thing we must do is communicate our business better, make it more transparent and simple to understand, so that our investors can appreciate the seasonality and cyclicality, and what it means for our earnings and returns.
Thank you Greg for you time and insight!
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This is an extract of a conversation in my book Out of the Shadows – The New Merchants of Grain, available now on Amazon.