Bunge's businesses stretch from the farm field to your local supermarket shelf. A leading integrated agribusiness and food company, Bunge produces, stores, and sells agricultural products such as oilseeds and grains, which it turns into vegetable oils and protein meals. Customers include animal feed, poultry, and aquaculture producers. The agribusiness markets vegetable oils used in the biodiesel industry. The company's edible oil products segment sells packaged oils, like shortening and margarine under brands Bunge Pro, Floriol, and Olek. A sugar and bioenergy unit produces sugar and ethanol, which are sold primarily in Brazil. Bunge also mixes and distributes crop fertilizers to farmers in South America.
Bunge has operations in Africa, Asia, the Caribbean, Europe, the Middle East, North and South America. Europe is the company's largest market, accounting for nearly a third of total sales. The US represents about a quarter of sales, while Asia accounts for nearly a fifth.
The integrated agribusiness and food company divides its operations into four divisions. Agribusiness is the largest, accounting for nearly three-quarters of the company's sales. It's primarily involved in the purchase, storage, transport, processing, and ultimately the sale of agricultural commodities in North and South America, Europe, and Asia. Bunge's Food and Ingredients division houses edible oils products and milling products and includes businesses that produce and sell edible oils, shortenings, margarines, mayonnaise, and milled products, such as wheat flours, corn-based products, and rice. The Sugar and Bioenergy segment produces and sells sugar, and ethanol derived from sugarcane. The firm's shrinking Fertilizer arm makes, blends, and distributes fertilizer products for the agricultural industry primarily in South America.
Bunge's sales approached $61 billion in 2012, a 4% increase versus 2011. Agribusiness and Edible Oil Products outperformed the company's other business segments, posting sales increases of 15% and 7%, respectively. The company's Sugar and Bioenergy operation's sales tumbled 20% in 2012 versus the prior year, while sales of milling products declined by nearly 9%. Asia, Canada, and the US each posted double-digit annual sales comparisons, while sales in Europe rose 6%. Brazil posted a 3% gain in 2012 sales, while Argentina suffered a 16% decline. Overall, 2012 marked the third consecutive year of increasing sales for Bunge, although the rate of growth has slowed. Indeed, in 2011 sales jumped 29% versus 2010.
Net income plunged 93% in 2012, its second year of steep decline, due primarily to an after-tax charge related to the impairment of the Sugar & Bioenergy segment goodwill and a loss of $342 million for results of discontinued operations.
Diversified Bunge is building some of its businesses, while retrenching in others, such as fertilizer. Indeed, in 2013 the company sold its Brazilian fertilizer business to Yara International ASA for $750 million in cash. Also in 2012, the firm sold its 28% stake in Soloe, LLC, its joint venture with DuPont formed in 2003, for $440 million. Bunge will continue to supply fertilizer to farmers as part of its grain organization activities.
Bunge intends to fuel growth by investing in projects that strengthen its leadership in grains, oilseeds, and food ingredients.
Mergers and Acquisitions
In line with its focus on agriculture and environmental concerns, Bunge in 2012 acquired London-based Climate Change Capital Group, parent to Climate Change Capital (CCC), a UK-regulated sustainable asset manager and adviser. CCC makes investments in projects, companies, and technologies, focusing on carbon finance, private equity, and property. Also in 2012 Bunge's subsidiary in India acquired the edible oils and fats business of Amrit Banaspati. The purchase, which included the rights to the vanaspati (cooking oil) brand GAGAN, furthers Bunge's presence in the Indian consumer foods market. The deal followed Bunge's purchase (through its North American subsidiary) of a pair of margarine production facilities and their assets from The C.F. Sauer Company in mid-2011. Bunge scooped up an assortment of low saturated and trans-fat products for its North American customers, which include restaurants and food processors.
In April 2012 Bunge purchased the assets of MCN BioProducts, a privately-held Canadian technology company. The purchase creates opportunities for Bunge to provide protein alternatives in existing and new markets.