market. We have a fantastic portfolio of customers with
commodities-related risks. Now it's a matter of leveraging
that position and using the opportunities to help our
customers and make money for Rabobank," Hungate says.
Another change Rabobank could make to improve
collaboration across the bank is to change the review
and reward system, so that it reflects the roles various
people play in deals, Bottenbruch says. To make this
work, we all have to look beyond our own products
and geography. We have to think about our clients as
a whole, what affects them - like the sugar market -
and what Rabobank can do to help them. If we can do
this, we will do more business, bigger deals and forge
even better relationships with our clients. The road
ahead is pretty clear, we have to focus on our clients
and leverage our existing strengths. It's all there already.
We just have to use it more effectively."
The volatility on the world's sugar markets
has had a big impact on the financing
needs of sugar producers and traders. For
French sugar trader Sucres et Denrees
(Sucden), the sharp fluctuations in sugar
prices have led to a big increase in
the company's short-term financing
needs. In October, Rabobank Trade&
Commodity Finance agreed to commit
USD 30 million in a USD 150 million 2-year
hedge financing facility, which secures
liquidity for margin call exposure on the
price risk hedges on Sucden's purchase
contracts with raw sugar processor Cosan.
The deal is a win-win situation for both
Rabobank and Sucden, enabling Rabobank
to get closer to Sucden while meeting the
sugar trader's immediate financing needs.
CFO Thierry Bourvis welcomed the deal,
at a difficult time in the sugar industry.
"The availability of credit had become a lot
tighter, too. And when that situation was
starting to improve in the second quarter
of 2009, sugar prices started to rise very
Sucdens's policy has always been to
develop long-term relationships with core
partners, both commercial and financial,
Mr Bourvis added. "On the financial side,
we need banks with real expertise in soft
commodities and Rabobank has that. Their
teams know our business, which means we
can demonstrate the logic and rationale
of our credit requirements. The bank's
network in the key countries in which we
operate, like Brazil, also means Rabobank
knows the sugar business in those specific
markets, so they can make an accurate
assessment of any risks."
Given the fluctuations in sugar prices,
the biggest increase in demand from
both producers and traders has been
for hedging products, plus additional
funding loans to cover higher prices.
The ongoing wave of consolidation in
the global sugar industry has also led to a
sharp rise in the demand for M&A advisory
services. Rabobank's knowledge of these
developments, and Sucden's business,
means that the bank can offer Sucden
solutions adapted to specific situations.
'It is essential that we can rely on financial
institutions like Rabobank, especially in
difficult market conditions."