Swiss commodity trader Ecom Agroindustrial to buy UK’s Armajaro Holdings

Swiss commodity trader Ecom Agroindustrial to buy UK's Armajaro Holdings

The 160-year-old Swiss commodity trading and processing company Ecom Agroindustrial Corp Ltd has agreed to buy UK's Armajaro Holdings'commodity trading operations, in a transaction that would make it one of the world's biggest cocoa and coffee traders.

Both companies did not disclose the financial terms of the transaction.

The deal comes amidst a shake-up in the global coffee business. In December 2012, Barry Callebaut, the world's largest chocolate manufacturer, acquired the cocoa ingredients division of Singapore-based Petra Foods, for $950 million, while US crop giant Cargill Inc is close to buying Archer Daniels Midland Co's cocoa business worth $2 billion.

Ecom, the world's second-biggest coffee and third-largest cocoa trader, did not disclose financial terms of the acquisition.

Founded in 1998, London-based Armajaro Trading Ltd is one of the world's largest traders in soft commodities specialising in the cocoa, coffee and sugar.

Its customers include all of the major global chocolate manufacturers and most of the world's leading coffee manufacturers and roasters. It recently added sugar trading to its business.

Armajaro rattled the cocoa industry in July 2010, when it bought 240,100 tonnes of cocoa from London's NYSE Liffe exchange for £658 million, accounting for 7 per cent of annual global cocoa production.

This was the second time it cornered the cocoa market after having bought three quarters of the 204,380 tonnes of cocoa in 2002 from the Euronext Liffe exchange, accounting for more than 5 per cent of global cocoa production and driving cocoa prices to a 17-year high of £1554 a tonne.

On both occasions the company denied that it was manipulating global prices of cocoa, but the deals earned Armajaro's co-founder Anthony Ward the nickname "Chocofinger."

Founded in 1849 in Barcelona, Spain, by cotton merchant Jose Esteve, Ecom's coffee, cotton and cocoa operations span 18 countries and is a global leader in all of its core businesses.

The Esteve family established itself in the US, Brazil and Mexico and, in 1999, Ecom combined all commodity and merchandising operations and moved its headquarters to Pully in Switzerland.

Today, Ecom, controlled by four brothers of the Esteve family, is one of the top three merchants in coffee, one of the largest coffee millers in the world, and amongst the top five merchants in both cotton and cocoa.

The company's turnover in 2011 was in excess of $4 billion, handling approximately 11 million bags of coffee, 2 million bales of cotton and 250,000 tons of cocoa, according to the company's web site.