January 16, 2019 / 3:02 PM / a month ago

Louis Dreyfus to exit dairy by mid-2019 as part of overhaul

PARIS, Jan 16 (Reuters) - Louis Dreyfus Company said on Wednesday it would sell or wind down its small dairy business by the middle of this year as the trading giant focuses on commodities such as grain and oilseeds.

Privately held Louis Dreyfus previously earmarked the dairy business as a non-core activity, it said in a statement.

"The business accounted for roughly 1 percent of our revenues in 2018 and demanded substantial working capital resources," Chief Financial Officer Federico Cerisoli said.

"The exit will have practically no impact on our global sales ... and is expected to have a slight positive effect on our working capital from 2019 onwards," the company said.

Like rival agricultural commodity groups, Louis Dreyfus has reorganised activities amid declining margins in traditional merchandising.

Its biggest divestment has been the sale of its profitable metal trading business for $466 million last year. It has also sold fertiliser distribution activities and previously earmarked its orange juice business for a possible spin-off.

Louis Dreyfus last month announced the creation of a new role of head of food innovation, mirroring efforts by other agricultural traders to move down the food chain into higher-margin areas.

Reporting by Gus Trompiz Editing by Edmund Blair

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