Chairman (taking direct responsibility for group leadership and strategy), ED&F Man Commodities Ltd
Ep.10 – From olympic rowing to commodity guidance w/ Chris Mahoney
We are thrilled to announce that this Strong Source episode features Chris Mahoney, former CEO of Glencore Agriculture. Chris ...
Transcript (18 segments)
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Alex Martin0:07
Welcome to the Strong Source Commodity podcast. We are your hosts M BR and Alex Martin. Today we are super excited with this new guest, Chris Mahoney. Chris, where do I start introducing you? Not just an amazing trader, but also a medal winner at the Moscow Olympics in rowing. You've been head of Glencore Agriculture for 18 years, from 2003 to 2019, touching sugar, coffee, all kinds of commodities. Now you're chairman of ED&F Man as a non-executive director, and you're following the merger of Fiera and Bunge. Super exciting. I'm also very excited that you're here, reading about your long history in the commodity trade. I read that you worked with Andy Hall.
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Chris Mahoney1:50
Andy Hall? Yeah, that's correct, briefly, only six months. We just talked about Hoop Speings, a legend within Cargill. Then even Glencore, the CEO? I hope you have met Mark Rich. I haven't. First of all, it's my pleasure to be here, Alex Martin, thanks for inviting me. No, I have never met Mark Rich.
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Alex Martin2:14
I introduced you a bit more, but tell me: how did you end up in this beautiful world?
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Chris Mahoney2:21
By accident. I joined Cargill straight out of Oxford in 1981. I was rowing in the boat race and Olympics, so I could only interview after April. Cargill was one of them. I wanted to go into finance or banking, but commodity trading seemed close enough. It was by chance.
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Alex Martin3:09
You wanted to be in this industry because maybe you could have worked elsewhere? It's not something you study for.
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Chris Mahoney3:30
I studied geography at Oxford, which touched on commodities. The idea of travel appealed to me. But honestly, it was because they interviewed late. Other options like Guinness Peat were easy to turn down.
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Alex Martin4:06
How many years were you at Cargill before you went to...?
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Chris Mahoney4:15
I was at Cargill for 16 years, from 1981 to 1997. Then I worked a year with Andy Hall at Phibro, then moved to Glencore in 1998, where I stayed until I retired as an executive in 2019.
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Alex Martin4:38
That's amazing. How was your time at Glencore from the beginning?
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Chris Mahoney4:43
Glencore was fantastic. I reported to Ivan Glasenberg. No bureaucracy, swift decisions, very entrepreneurial. He trusted people and gave leeway. The company had tremendous financial resources, critical for transforming from a trader to a handler and processor. It could not have been better.
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Alex Martin6:01
Could you explain what you guys did at Glencore Agriculture?
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Chris Mahoney6:10
In the late 1990s, we felt pure trading would get harder due to transparency and liquidity. So we moved into owning assets. We started buying country elevators, port facilities, and crushing plants in Russia, Ukraine, Kazakhstan, avoiding the US and Brazil. The key was to buy assets that supported the trading business and drew flows in. This culminated in acquiring Viterra in 2014. Glencore did the same elsewhere.
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Alex Martin8:32
You make it sound easy, like buying futures. But you were a CEO and trader. How does the strategic process work from analysis to buying silos?
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Chris Mahoney10:05
It's like long-term trading. You start with a blank sheet: where will production and exports grow? Where is capacity tight? You look three to five years ahead. Then you need assets actually for sale. We kept in touch with customers, suppliers, bankers, and acted quickly when opportunities arose. We still traded around the assets; the team in Rotterdam was excellent, working collaboratively.
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Alex Martin12:58
But valuation of these assets—did you get experience along the way?
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Chris Mahoney13:04
Yes, we were good at cash flow analysis, looking 25 years out. Ivan came from accounting, so financial acumen was strong.
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Alex Martin13:48
There's a topic about assumed synergies in M&A being overestimated. You once said it's better to build or hire and develop people yourself for culture. How do you look at acquisitions of assets and people?
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Chris Mahoney15:14
For traders, you're better off promoting from within. With assets, you'd prefer to buy existing ones rather than build, to avoid adding capacity. When buying a company, you have to take the people too. At Glencore and Cargill, we didn't fiddle with numbers. The big calls turned out correct.