(Company corrects to delete spokeswoman’s reference in paragraph 3 to Debertin placing increased rigor around business process.)
By Tom Polansek
CHICAGO, May 22 (Reuters) - CHS Inc, the biggest U.S. agricultural cooperative, named a new chief executive on Monday, after suffering a sharp decline in income and confirming it was a creditor of a failing Brazilian commodities trader.
Minnesota-based CHS picked Jay Debertin to take over immediately for Carl Casale, who had been CEO for six years. Debertin, who joined CHS in 1984, previously served as executive vice president and chief operating officer for CHS’s energy and foods business.
Last month, sources said CHS was among the largest creditors of Brazilian commodities trader Seara Ind e Com de Produtos Agropecuários Ltda, which filed for bankruptcy protection. CHS’s credits with Seara were estimated at around $200 million.
Debertin said in an interview it was too early to know how the bankruptcy would affect CHS’s results.
“The leadership transition occurred for a number of different reasons. I would not look at this one as being a cause and effect,” he said about Seara Ind e Com’s failure.
Major grain handlers have struggled lately to profit from their core grain trading businesses because large global supplies have created fewer opportunities to make money by moving crops to areas with deficits from areas with surpluses.
In its fiscal year 2016, CHS reported net income dropped 46 percent from the previous year to $424.2 million. The company’s annual report said 2016 was the most challenging year in more than a decade.
Earlier this month, the stock prices for rival grain companies Archer Daniels Midland Co and Bunge Ltd sank when they warned of troubles making money from global trading.
ADM has shaken up its global trading unit in a bid to boost profits.
Another competitor, Louis Dreyfus, has revamped operations and its head of grain trading in North America will retire at the end of the month.
Casale’s spokeswoman, Valerie Martin, said he had reached out to CHS’s board to start discussions about his departure.
“Performance objectives had been completely achieved,” Martin said. “It made sense to all involved.” (Editing by G Crosse)