Download your FREE Agricultural Investment Guide here.
The inspiration for Ivan Glasenberg’s entry into the commodities business was distinctly humble: candle wax.
As a young accountancy student at Witwatersrand University in Johannesburg he took a course that changed his life. “I observed a man sourcing candle wax from South America and selling it to Japan. I thought, ‘that’s unbelievable’. Talking on the phone in his office, that man made money moving candle wax from one country to another’. It really interested me,” he says.
Download your FREE Agricultural Investment Guide here.
Three decades on the career launched by that youthful fascination is set to be crowned this week with the announcement of the initial public offering of Glencore, the group Mr Glasenberg now heads.
While Glencore, based in the unassuming Swiss town of Baar, near Zurich, and its chief executive may prefer a shy, retiring style, the company itself and its IPO lend themselves to superlatives.
From Baar Glencore’s senior executives marshal huge quantities of commodities such as oil, copper, coal and wheat that are vital to the global economy, and controls multibillion dollar investments in mines, oil fields and farmland.
The IPO in London and Hong Kong is set to be the largest in history for the UK market and the third largest in Europe – only the privatisations of Deutsche Telekon and Enel of Italy in the late 1990s were bigger. In the process it will transform a highly publicity shy company into a publicly listed $60bn giant, with all the attendant glare. Unsurprisingly bankers – whether involved in the deal or not – consider it the event of the year whose importance reaches beyond the capital markets.
Download your FREE Agricultural Investment Guide here.
At a time of rising commodities prices on the back of the industrialisation of high growth markets such as China and India, the listing will give Glencore’s army of 2,700 traders the financial fire-power to pursue acquisitions that until now were beyond their reach. In short, the flotation is set to trigger a new round of consolidation in the natural resources sector.
“The company has reached a stage where if it wishes to grow by acquiring more assets, the capital structure, as a private company, does not work any longer,” says Mr Glasenberg, 54, in his first interview since becoming chief executive in January 2002. “We want to set a structure that, when opportunities to buy new assets present themselves, we don’t have to walk away from them because we are not in a position to buy them.”
Download your FREE Agricultural Investment Guide here.
Source: FT.com