World Grain - June 2021 - 30

FEATURE: STRUCTURALLY POSITIONED FOR SUCCESS
allowed us to unleash the power of one Bunge. It's the
information that we have, the speed and agility to move
to respond to customer needs at both ends of the supply
chain; the ability to utilize our information to help
solve problems for our customers and the ability to
continue to take costs out. "
One Bunge approach
Shifts in global trade patterns made the necessity to shift
the corporate structure more apparent, Heckman said.
" As an example, look at Brazil soybeans going to
our crushing facilities in China, " he said. " In the past it
would have crossed multiple P&L (profit and loss) lines,
and there would've been multiple internal transactions.
So now the destination value chain, it is one transaction.
Last year was a great example. The Brazilian real
goes down. The Brazilian farmer wants to market their
crops, and we were able then to buy that crop to help the
Brazilian farmer lock in their profitability but then also
sell that through our value chain through our crushing
by selling oil and meal at that time to the Chinese market
and locking in those crush margins in a much more efficient
manner than in the old Bunge.
" The regional lines were a construct that had previously
served very well, but the way the world works in
running the global platform, and the benefits that we
have to serve our customers when there is dislocation,
you have to look at the total platform. That's when you
think about a one Bunge approach. "
Basic to the need for this approach is that Bunge
must focus on customers on both ends of the supply
chain, Heckman said.
" That's different than how a lot of industries think, "
he said. " The farmer is our customer, and we have to
help him and her be successful. At the other end is the
end consumer, and we deal with both B-to-B customers
and B-to-C customers. So how do we take the friction
out of our internal system to be most efficient on the
value chain and to get the consumer what they want
and get it most efficiently all the way back down that
value chain and send the right signals to the farmer? "
Even as farm storage of grain has grown significantly
over the last several years, the relationship between
growers and grain companies needs to deepen,
Heckman said.
" In some ways they need our services more than
ever, " he said. " The more storage they have, the more
flat-price risk that they have to manage; the more
they're not forced to make a marketing decision. Now
they need to be thoughtful about that marketing decision.
With more on-farm storage they have more logistical
risk than they've ever had, and they also have
more quality risk in storing that crop than they ever
have, risk that used to be passed to the commercials immediately.
Now for some of that reward in the carrying,
and the timing in marketing, that comes with managing
risk. Opportunity and risk are opposite sides of the
same coin, and it's our job to help them manage that at
the front end of the value chain. We want all of our customers
at both ends of the value chain to be successful
and to be growing because that is good for everyone,
and that's how we're going to feed a hungry world. "
Bunge's new structure will help the company in other
ways, Heckman said. For example, he said a new
approach to capital allocation will generate strong returns
over time. In the past, allocation was managed
regionally, with each region funded to pursue its most
promising projects/initiatives.
" Today the capital comes to the center, and we look
at projects in a way that is not, say, doing the best project
in South America or North America, we're doing
the best project at Bunge, " he said. " We'll all compete
for the best project whether it's specialty fats and oils,
whether it's serving renewable feed stock, whether it's
in our soft seed crushing or soy crushing. "
Discipline around financial focus was high on the list
of Heckman's priorities together with Bunge's management
of day-to-day risk.
" But it also was the investments and the financial dis30
June
2021 / World Grain / World-Grain.com
http://www.World-Grain.com
World Grain - June 2021

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