200

200 Years of Global Partnerships In MeMorY of MIchel frIbourG DeDIcatIon

This book is dedicated to the Fribourg family, members of the Board of Directors, and the employees of Continental Grain, both past and present for their loyalty, friendship and commitment.

1913-2001 table of contentS

a Message from chairman and ceo Paul fribourg ...... 6 the fribourg family legacy ...... 8

Profile of Michel fribourg ...... 14 an overview of the Grain Industry ...... 18 the foundation Years ...... 26

Global expansion in the 20th century ...... 38 recalibrating for the 21st century ...... 66 today and tomorrow ...... 82

Designed and Produced by Onward Publishing Inc. 6 Bayview Avenue, Northport, NY 11768 631-757-8300 a MeSSaGe froM chaIrMan anD ceo Paul frIbourG 7 a MeSSaGe froM Grain is one of the few resources that is central to In the mid-20th century, our father Michel – known modern civilization. It is grown on more land area to everyone as MF – possessed a world view and a chaIrMan anD ceo than any other commercial food, and there is more unique ability to engage people and ideas, which world trade in grain than any other crop. It’s no helped him turn a medium–sized family business Paul frIbourG wonder that an important industry grew from this into a professionally run, global enterprise that key commodity. conducted business and forged partnerships in new For 200 years, starting in Europe and then in the and exciting regions of the world, from Africa and U.S., Continental Grain Company has played an China to Russia and Latin America. important part in the global development of the Thankfully, MF’s influence remains very much with grain industry, and more broadly agribusiness. us, to guide us in our decision making. One Starting in 1813, and into the 21st century, through important lesson is to never let success or ego get in six generations of ownership, we have been very the way. The key is to stay humble and realize that fortunate to build and sustain a successful and both life and business require constant learning, diversified global business that now includes broad through which we find ways to be better and adapt food and agricultural interests, as well as long- new practices and technologies that will help us lasting partnerships with talented management achieve our goals. We still “consult” with MF on teams around the world. every key business decision by asking “What would MF do?” knowing he will continue to guide us with While we have achieved a notable legacy of success, his business wisdom. it hasn’t always been easy. There were times when we had to change our strategy and make difficult We also run our business as a meritocracy and decisions to ensure the very survival of the show respect and regard for individuals both inside company. But survive we did. and outside the company. It follows that our integrity and reputation were and are everything – a Each generation kept the business alive by tenet that has carried us through two centuries in reinventing the company while preserving our long- an often-turbulent world. standing culture and values. We made sure to continue the legacy and seize new opportunities to We have had the benefit and pleasure of working sustain and grow the company. with many great people over the decades. From our board of directors, to our employees, to our But it’s more than a story about growth. Continental partnerships around the world, we are so fortunate Grain, especially in the pre-Internet age, was able to to have collaborated and continue to collaborate promote international trade and partnerships, with the best and brightest people who are aligned ensure the exchange of vital goods, help build with our mission – people who are wise, thoughtful economies around the globe, and foster a and caring, people who are willing to commit their foundation for long-term political cooperation time and exchange ideas and opinions. among nations. With the support of so many talented people, and Being privately held, we could take risks with a long- with a remarkable legacy on which to build, we will term view that most public companies wouldn’t be continue the journey and look forward to the future able to do. And sometimes those risks were with great enthusiasm. significant, as the company pioneered new markets, new commodities and untapped parts of the world. the frIbourG faMIlY leGacY the frIbourG faMIlY leGacY 9

Michel Fribourg, his sisters, and a friend in France, circa 1923.

In 1848, Simon’s son Michel undertook a dangerous and difficult trip to Bessarabia (now Romania) with bags of gold to purchase grain, which he brought back by boat up the Danube and the Rhine, helping to feed a hungry Belgian population and

Simon Fribourg circa 1850. In April 1997, Paul J. Fribourg was named chairman and chief executive officer of Continental Grain Company. His father, creating new opportunities for the family Michel Fribourg, became the company's business. chairman emeritus. In the coming half-century, Europe would This event marked the sixth generation of experience unprecedented scientific the Fribourg family to lead the company, progress and social change, launching going back to 1813 when Michel Fribourg's significant and wide-ranging developments great-great-grandfather, Simon Fribourg, in industry, commerce and trade that founded the commodity trading business in brought vast new wealth to western Arlon, France (which is now in Belgium). European countries. Simon's business was nearly two decades To continue seizing on these opportunities, old when the industrial revolution Michel Fribourg, together with his two sons commenced, forever changing the face of Arthur and Paul, the former who had taken Europe and creating fertile ground for the an active role in his father’s business two Fribourg commodity business to flourish. decades earlier, expanded the business

Arthur Fribourg in military dress.

René and Michel Fribourg at the 30th Anniversary party of Continental Grain in the U.S. New York, 1951. 10 the frIbourG faMIlY leGacY 11

responsibilities for the company from his The forces that transformed Europe from “To carry Continental Grain through its father, Michel. an agrarian to an industrial society enabled first phases — birth, infancy, and youth, the Fribourg descendants to flourish in a Arthur then retired and turned the business with the trials and errors of the learning world of commerce that included the rise of over to his sons Jules and René. Jules was process — required the qualifications of a merchants, manufacturers, bankers and then only 27 years old and would become pioneer. Such a person was my father commodity traders. This world would known in Antwerp as one of the ablest and (Jules), who along with his brother, influence Continental Grain as its business most aggressive businessmen, whose inherited from earlier generations of grew, first in Europe and then in the United daring ventures until his death in 1944 led Fribourgs, a local Belgian grain-trading States, into becoming a major global him to develop his business into an and flour milling business. My father was company. important international firm. a born leader, a man of great ambition Portrait of René Fribourg by Salvador Dali. Arthur Liman and drive, possessed of a rare trading For Michel Fribourg, trading grain and geographically and into flour milling, sense. He developed the little family selling food to the world had a degree of constructing flour mills in Arlon and business into a worldwide grain-trading nobility to it. This gave a sense of pride to Luxembourg in the 1890s. house, competing on equal terms with its the employees of Continental Grain. As Before the century was over, Europe’s major rivals. Yet I remember him as observed by Arthur Liman, former extensive new system of railways would not being rather a shy, modest man with a Continental Grain board member, “People only significantly increase the speed of quick temper and a very warm personality. would walk around and say ‘I am a grain shipping goods, but would also reduce the My father surrounded himself with man’…a connotation of being something cost of transportation by half. And with the partners and associates whose that was almost superior to anybody else on proliferation of modern, heavy industries characteristics were similar to his own. earth.” came large towns and urban centers and Together, they had the foresight to create a the emergence of a new class of citizens strong foundation in the New World.” able to survive and prosper in business rather than by owning or tending to land. As the effects of this industrial revolution spread, a society and marketplace for the Fribourg business were made immeasurably stronger. Around this time, Arthur had assumed leadership

Michel Fribourg

Paul and Charlie Fribourg the frIbourG faMIlY leGacY the frIbourG faMIlY leGacY 13

1 2 3 4 5 6

After Simon Fribourg founded a small turned the business over to his two sons, In the wake of the German invasion of including groundbreaking and historic grain-trading business in Arlon (which is Jules 3 and René 4 , who had been Belgium and France in May and June 1940, grain deals with the Soviet Union and now in Belgium), six of his descendants involved in the growing enterprise since Jules Fribourg and his family gathered in China and other significant international have led the company from the mid-1800s they were boys. Under Jules’s leadership, Bordeaux and, in fear of what might expansion. to today. the firm, now based in Antwerp, made its happen in France, decided to leave for the Upon his college graduation in 1976, first ventures into international trade in the U.S.. Jules died in 1944, as the war was Michel Fribourg 1 , Simon’s son, began Michel's son Paul 6 joined Continental working with his father and expanded the decade before World War I. coming to a close. René took over as Grain. After two decades of increasing company’s scope to include all of the large During and after the first war, Jules and chairman of the board, also serving as levels of responsibility at the company, he markets in Belgium, helping to provide René took the business to London and then acting president until Jules’ son Michel became CEO in 1997. Throughout his food to a widening population. Later, as to Paris, where they found themselves at returned from active military duty. tenure, Paul has guided the company and Belgium became a major business center, the center of the international grain trade, Michel 5 , who was named after his great its transformation from its traditional role Michel enlisted his two sons, Arthur 2 including the establishment of business grandfather, took over the company at the in grain trading to its current position as an and Paul to help him run the business. contacts in the United States, which René age of 31. Under his leadership, Continental innovative holding company that owns, In the 1890s, under Arthur’s leadership, helped to solidify. Jules, a visionary with a Grain would successfully navigate both the invests in and partners with a broad range the business expanded into the flour pioneering spirit, understood that the devastating aftermath of the war and the of well-managed businesses in the global milling business. When Arthur retired, he Midwest region of the United States was opportunities of the 1950s, 60s and 70s, food and agriculture industry. emerging as a major source of grain. ProfIle of MIchel frIbourG 15

Initially, not fully prepared to take over the historic agreements with the Soviet Union business when his father died near the end and the People’s Republic of China. of World War II, Michel eventually gained Setting Michel apart from most business the experience, respect and authority he leaders was his strong, even driving sense to needed not only to lead the company, but to do what was right. His human touch helped transform it into an influential global him cultivate relationships around the company encompassing a range of world. His reputation and that of the agribusiness enterprises. At the same company always stood uppermost in his time, he left an indelible mark on all who mind and in his decisions. And he did not knew him.

“To my father, business and family were interchangeable –

almost a singular entity.” Paul Fribourg

Michel Fribourg’s impact on Continental Grain was profound and would be felt for generations. The aspirations he had for the company were guideposts for setting its future course. For 53 years, he provided invaluable leadership to the company and to the intricate network of global trade and economic cooperation that fueled the 20th century. A respected and admired leader of this globe-circling industry, Michel pioneered the opening of trade into many new markets around the world, including ProfIle of MIchel frIbourG 16 ProfIle of MIchel frIbourG 17

That kind of balance and drive requires a special person. In many ways, MF was For 53 years… he transformed his family unusual for the business world. He was, business from being a European-based essentially, an introvert — quiet, not trading company into a U.S.-based particularly social — yet underneath, he multinational corporation involved in a harbored a steel-like equilibrium that broad range of agribusiness enterprises. enabled him to take great risks while He pioneered the opening of trade with demonstrating loyalty and affection for his many new markets around the world, family, friends and associates. including the Former Soviet Union and Business Week cover — March 11, 1972. the People’s Republic of China. He was Perhaps most important, he understood the a respected and admired leader of this importance of trust and integrity in a tough globe-circling industry. He was known global business — at a time when a deal was around the world in ways that made on a handshake. redounded to the great credit of the “Add it all up and it’s clear that MF led a full company and his family.” and complete life, both professionally and From the Board of Directors tribute to personally,” Paul explains. “He had no sense Michel Fribourg of remorse or regret — a man at peace with himself and what he had accomplished. If Mary Ann and Michel Fribourg in their Manhattan townhouse. he had planned out his life, he couldn’t have waiver in his adherence to high ethical “They understood the word partnership in scripted it any better.” standards. all its ramifications — that we were all in Today, Michel Fribourg’s vision, his strong this adventure together and would share in “The key to our success, he would say, is our belief in trusted partnerships and his its successes and failures. To our father, people. And so, our mother’s and father’s concern for people continue to be part of the business and family were interchangeable lives were entwined with the lives of the legacy of Continental Grain. people of the company,” says Paul Fribourg. — almost a single entity.” an overvIew of the GraIn InDuStrY an overvIew of the GraIn InDuStrY 19

the various breadbaskets of the world. At the same time, in the Soviet Union and soon after in China, disastrous collectivization programs effectively turned the world's largest farming nations into net importers of grain.

The grain trade is nearly as old as grain By the second half of the 20th century, the growing, dating back to around 9,000 BC. grain trade was divided between a few state- While subsistence-level production was owned and privately owned giants. The common throughout history, the grain largest private companies, known as the trade only became possible when "big five” at the time, were Cargill, production was geared towards creating a Continental Grain, Louis Dreyfus, Bunge surplus for commercial agriculture. and Andre. Early trade was most likely by barter, Major grain companies invest in shipping, because hauling large amounts of grain grain elevators, communications and from one location to another was so processing plants — mills that make wheat difficult until the advent of the wheel and more effective means of transportation. As they became more industrialized and urban, England and other European countries increasingly imported grain from 20 an overvIew of the GraIn InDuStrY 21

into flour and corn into animal feed, and Modern issues affecting the grain trade crushing plants that convert soybeans into include food security and food safety cooking oil or meal. They also operate the concerns, the increasing use of biofuels, the grain pipeline — from farmer to consumer. controversy over how to properly store and While grain was once sold by the sack, it is separate genetically modified and organic now moved in bulk by railcar or barge, crops, the local food movement, the desire loaded onto huge ships to overseas of developing countries to achieve market

destinations and then transported by truck access in industrialized economies, climate or railcar. Railways have switched from coal change and drought-shifting agricultural to diesel fuel, and introduced hopper cars to patterns, and the development of new carry more grain faster and with less effort. crops. Old wooden grain elevators have been But in this changing marketplace, one thing replaced by massive concrete inland is certain: The demand for grain and other terminals, and rail transportation faces key agricultural commodities will be greater competition by ever-larger trucks. than ever to feed a growing global population.

‘ ‘ ‘ It’s common for private equity firms to operate as if relationships are a zero- ‘ Integrity is at the foundation of this company. It always impressed me sum game. Continental Grain comes from a very different orientation toward how everyone is always talking about doing the right thing in the right way. partnership. So at Arlon Group, we have the benefit of the cultural dedication The family, the close-knit group of people here, really help to maximize the to partnership that Continental Grain has built over the course of history. value of the company.

MICHELLE BROOKS FRANK BAIER Managing Principal, Arlon Group Executive Vice President and Chief Financial Officer, Continental Grain

The reason I stayed with the company a long time is because of the influence that MF had on me. I was impressed with his integrity and compassion, and You have to evolve with the world, participate. That’s what Michel he always put importance on the people of the company. did, and he created an empire.

VART ADJEMIAN PIERRE HAAS Former Executive Vice President and Former European Senior Executiver, Chief Operating Officer, Continental Grain ‘‘ ‘‘ Continental Grain and Family Friend

It's dramatic to compare the company from 1954 to 1970. We were doing MF was a very special person. He had a mystique and people business in places that no one would have dreamed of. It was a wonderful wanted to meet him. time for me, the company and the world. BEN NORDEMANN Former Board Member and MIKE LASERSON Senior Vice President, Continental Grain Former Senior Managing Director, ‘‘ International Finance, Continental Grain ‘‘ the Paintings and tapestries of Michel fribourg Most people knew Michel Fribourg as a man who appreciated and understood art, literature and culture, as well as business. But few knew that he was also an accomplished artist in his own right, creating paintings and tapestries throughout his life. Several of his works are presented throughout this book. the foundation Years the earlY YearS of contInental GraIn Set the StaGe for exPanSIon In euroPe 1842 1813 Simon’s son Michel joins the family business at the age of 18. anD aMerIca, followeD A grain trading business is founded by 1890s Simon Fribourg in Arlon, France (which The company enters the flour is now in Belgium). In the MID-20th centurY milling business, building its first mill in Arlon (which is bY war, ProSPerItY now in Belgium). anD the coMPanY’S evolvInG Global Influence. thIS Influence woulD not onlY Generate unPreceDenteD Growth, but alSo 1890 1848 Arthur Fribourg establishes a Business grows substantially firm under his name in Early 1900s SPur InternatIonal during Belgian famine. Antwerp. Arthur Fribourg turns over business to sons, Jules and traDe anD PolItIcal René, who begin expansion of cooPeratIon for international business. DecaDeS. 1813-1914 the founDatIon YearS 31

from humble beginnings, a small family grain trading business was able to take advantage of unexpected opportunities that emerged from the entrepreneurial forces of the Industrial revolution.

Born in 1790 in Sierck-les-Bains (Lorraine), famine, Michel Fribourg undertook a France, Simon Fribourg left Sierck-les-Bains dangerous and difficult trip to Bessarabia in 1813 and settled 60 kilometers north in (now Romania) with bags of gold to Arlon, France (which is now in Belgium). purchase grain and bring it back to There he founded a small grain-trading Belgium by boat up the Danube and the firm. Rhine. In 1842, Michel Fribourg, the son of Simon From the beginning, the commodities Fribourg, joined his father in business and trader thrived on the vicissitudes of nature expanded it to all of the large Belgian and the ever-present need for food. In markets. In 1848, during the Belgian addition to natural disasters, wars played a

Arlon, circa 1890 32 the founDatIon YearS 33

major role in the company’s history. After 77 years in Arlon and 24 years in Because Belgium was not involved in the Antwerp, the Fribourgs were now at the Franco-Prussian war, in the 1870s, it center of the international grain trade. became an important business center. They took advantage of the many Michel Fribourg and his two sons, Arthur opportunities that wartime business and Paul, were able to expand the business. offered. In 1916, Jules and René moved In 1890, Arthur Fribourg established a firm from London to Paris where they would under his own name in Antwerp, and about remain until 1940. It was also during the the same time, in partnership with his war that the first business contacts with the father and his brother Paul, went into the United States were established. René flour milling business and constructed Fribourg spent two years in the U.S. from mills in Arlon and Luxembourg. November 1916 until the Armistice. This was to become the start of the company’s Arthur then retired and turned the business Arthur Fribourg, circa 1905 over to his two sons, Jules and René. Jules global expansion. was only 27 years old. He had been in the family business since the age of fifteen, and had studied the grain business in Germany and England. Through the enterprise of Jules Fribourg, known in Antwerp as one of the ablest and most aggressive businessmen, the firm made its first ventures into international trade in the decade before the Great War. In October 1914, Arthur Fribourg and his two sons took the last ship to leave Antwerp before the city fell to the Germans. In London, Jules and René then began the expansion of their international business. Jules Fribourg René Fribourg

‘ ‘ ‘ We've had some great successes and we've made some big mistakes, but I People are the cornerstone of this company. This company was able to ‘ think we've learned from the mistakes so the business today is stronger and grow, evolve and increase its global reach because of the ideas of its is thriving and I think really has a great future. people, not just because of senior management or outside forces. MICHAEL ZIMMERMAN TERI MCCASLIN Vice Chairman, Continental Grain Executive Vice President, Chief of Human Resources & Administrative Officer, Continental Grain

This is a company that cares about people and allows them to grow and develop. The people who work with Continental Grain for the next 30-40 Even though I haven't worked for the company for over 20 years, years will be exposed to all kinds of things. I'm glad I had the opportunity. I still feel very much a part of it and devoted to the the family.

NICK ROSA MARV BERENBLUM Senior Vice President and General Manager, Former Senior Vice President, ‘‘ ContiAsia Division, Continental Grain ‘‘ Human Resources, Continental Grain

The company is willing to work at a problem, decide what's best and make When I think about Continental Grain, I think about a fantastic a decision. Their knowledge, reputation, and experience allow them to make group of entrepreneurs and a great family at the helm. decisions quickly and rationally. POUL SCHROEDER Former President and General Manager, F. CARL BRAUN Finagrain, Continental Grain Chairman and Chief Executive Officer, ‘‘ Unibank S.A. ‘‘ the Paintings of Michel fribourg Global expansion in the 20th century 1975 Allied Mills acquires Coronado Feeders, the first facility in what would become Continental Grain's Cattle Feeding Division 1964 (now part of JBS Five Rivers Cattle Feeding LLC). The Continental Grain cattle feeding business expands sells one million tons with the acquisition of XIT 1981 of wheat to the Soviet Feeders in 1978, Colorado Beef grain-purchasing Allied Mills, Inc. is 1944 in 1979 and Grant County 1921-1939 agency Exportkhleb, 1972 merged into Continental René Fribourg becomes acting Feeders in 1981. 1997 Jules Fribourg expands CCI the first major U.S. The company makes a major, Grain. president of the company; Paul J. Fribourg is named into a worldwide company grain sale to the multi-million-ton sale of 1919 New York becomes the Chairman and Chief and opens offices throughout Soviet Union. grain to the Soviet Union. Compagnie Continentale Executive Officer of Europe, Asia, Africa and South defacto headquarters. d’Importation France (CCI) Continental Grain. America. is founded; the company begins its global expansion.

1921 The company establishes a U.S.-based business in Chicago, 1981 1940 1965 Illinois, under the name Continental Grain opens the first In the wake of the Continental Grain acquires 51 Continental Grain Company. foreign-owned feed mill in China German invasion of 1945 percent of Allied Mills, a major feed in a joint venture with Charoen France, the Fribourg Michel Fribourg becomes producer as well as a producer of Pokphand. The new business, family leaves Europe for president at the age of 31 fresh poultry. The acquisition brings Mid-1980s 1998 Conti Chia Tai International, the United States aboard following his discharge from the the company into livestock The company forms a formal Continental Grain transforms the Chinese feed one of the company’s U.S. Army. production and processing and Board of Directors. Company purchases a and animal husbandry freighters. provides the foundation for the 51percent interest in industry and paves the way for subsequent development of Wayne Premium Standard Farms, the company's further expansion Farms LLC, the company's current one of the largest fully into China. poultry business. integrated pork producers in the United States.

1915-1998 Global exPanSIon In the 20th centurY 43

During some of the most turbulent decades in history, marked by two world wars, the Great Depression and a cold war, continental Grain company found a way to overcome formidable obstacles and become a major international business.

To become an international grain trader in to transform CCI into a worldwide trading the 1800s, one did not need large amounts company, with offices in the Netherlands, of capital or massive grain depots, ships, Italy, Spain, England, Germany, Romania, and other infrastructure. What were needed Bulgaria, Yugoslavia, Argentina, French were credit, a telephone, personal Indochina (now Vietnam, Cambodia, and connections and a sound knowledge of the technical details of trading. Charm, good instincts, luck and guts didn’t hurt either. Six important transformational events occurred, which changed Continental Grain into a major international company in the 20th century. Opening International Offices The first significant event occurred in June 1919 when Jules and René Fribourg, together with other partners, founded the Compagnie Continentale d’Importation in Antwerp. In December 1919, the Fribourg brothers, with their partners, founded Compagnie Continentale d’Importation France (CCI), which became the headquarters of the firm. Jules Fribourg’s dynamic force and daring ventures led him 44 Global exPanSIon In the 20th centurY 45

New York office located at 2 Broadway, By the end of the decade, and after less than which was later to become Continental 20 years in the United States, the company Grain’s world headquarters. Shortly had established both a sophisticated grain thereafter, the company purchased its first network and a stable and growing business U.S. grain elevator in St. Louis, Missouri, in in North America, including offices in New order to procure commodities for export. York, the Midwest and a West Coast Jules Fribourg, himself, made two trips to outpost. the U.S. in 1930 and 1931. In the wake of the German invasion of To also capitalize on this limitless new Belgium and France in May and June 1940, market, in 1930, the company leased a Jules Fribourg and his family gathered in Galveston, Texas, terminal from Southern Bordeaux and, in fear of what might Pacific Railroad. This led to the second happen in France, decided to leave for the significant event – the evolution of U.S. As it was impossible to travel directly Continental Grain in the United States into to the U.S., Jules, thirteen relatives, and a grain originator from the interior to Jules’ personal physician, having been able export ports. This was accomplished to obtain visas for Portugal, left Bordeaux Chicago Board of Trade. through the leasing and eventual purchase for Lisbon on June 18, 1940. Meanwhile, Laos), Morocco, Siam (now This being 1921, Jules would have been of grain elevators. Jules’ son, Michel, working for the French Thailand), and Malaya (now considered nothing short of a pioneer in As it turned out, the Great Depression (the ‘Ministère de la Marine Marchande’ in modern Malaysia). this undertaking. period 1929-1939) served Continental London, diverted one of Continental Grain’s Establishing a U.S.-Based Capitalized with $50,000, the company Grain well, because the company was freighters to Lisbon to pick up the group in Business established a U.S.-based business, which willing to take the risk and purchase Lisbon. As the family had been unable to was then named Continental Grain Jules Fribourg was a existing U.S. grain facilities at bargain secure U.S. visas in Lisbon, the freighter set Company. At that time, the Fribourg remarkable visionary who prices. During this decade-long financial sail for Santo Domingo where the group brothers also purchased a seat on the Jules Fribourg understood that the collapse, the company purchased grain remained until they obtained their U.S. Chicago Board of Trade for $6,000. Midwest region of the United States was elevators across the country in such key visas. They arrived in New York in August emerging as a major source of grain; hence, To further strengthen its presence in the locations as Kansas City, Kansas; Nashville, 1940. the need to establish a U.S.-based business. United States, the company established a Tennessee; and Toledo, Ohio. Jules Fribourg began to run the business Global exPanSIon In the 20th centurY 47

New York City Michel saw the world’s needs and the inadequacy of the world’s grain supply to be totally inexplicable…and that adequate diets and supply of food would do as much to make the world a better place than a mutual defense pact or nuclear energy Michel Fribourg, U.S. Army treaty. from New York, which then became the defacto company headquarters. He then MORTON SOSLAND became gravely ill and died in 1944. At that time his son, Michel, was in the U.S. Army Continental Grain Board Member company’s European operations had been the late 1940s. To take advantage of this Intelligence Corps. Stewardship of the decimated by the war, which left the opportunity, Continental Grain continued to company passed to Michel’s uncle, René, American business by far the strongest make substantial investments in a broad who took over as chairman of the board and operation. And then, in the third significant network of grain elevators and other agreed to serve as acting president until event for the company, he made the components of commodity trading. The Michel returned from active duty. decision that the United States would company’s operations grew dramatically. Company Headquarters Moves to the become the company’s official Joseph Feuer and Willelm C. Schilthuis United States headquarters. were two senior executives who played a key Assuming the presidency of what was a vast With European and Asian agricultural areas role in Continental Grain in the 1940s. family enterprise after he was discharged devastated by war, and the populations of The strides that Continental Grain achieved from the U.S. Army, Michel, at the age of 31, these continents near starvation, American during the postwar period were significant.. had to face the reality that many of the output of foodstuffs increased sharply in 48 Global exPanSIon In the 20th centurY 49

“Total reliability and trust were paramount for the Chinese at that time, since they were inexperienced and had no knowledge of how to Emphasis on Talent negotiations, Continental Grain finalized a work with the West. Their sole frame of As the company expanded, Michel Fribourg historic grain trade agreement with the reference was being disadvantaged as a result of recognized that people were the Soviet Union, becoming the first company 19th century colonialism. Continental Grain cornerstone of Continental Grain’s to export American grain to the U.S.’s cold was prepared to, and acted on, the basis of continued success. The company set about war adversary. Shipments began in the early “mutuality of interests” and understood that its recruiting graduates from top universities weeks of 1964 – one million metric tons of business interests could be preserved only if it and business schools to create its future wheat at world market prices. These would could be perceived by the Chinese as leaders and managers. Great emphasis was be the first shipments – under an contributing to their well-being and placed on the training and development of authorization granted by President John F. development.” Kennedy just before his death in November people from entry level to management. Mr. Kissinger continued, “The business deals 1963 – to meet the needs of the Soviet Significant opportunities were provided Continental Grain made in Russia and China, people whose wheat harvest had failed. early in careers to provide employees with Board Member Henry Kissinger’s of course, had a significant business aspect, but exposure to different parts of the business Perspective they also had impact psychologically and in various parts of the world and equip ”People don’t remember that U.S. trade with diplomatically in the sense they were symbols of them with the skills to become true China in the 1970s was less than with how America could contribute to countries that entrepreneurs and international business Honduras – about $300 million a year. In were in a great deal of difficulty. This happened professionals. This focus on people became opening relations with China, there was no at a time when, for foreign policy reasons, an a hallmark of Continental Grain still in baseline because there had been no improvement in relations in the case of Russia, effect today and was to become the fourth communication on any substantial level for and an opening of significant event . 20+ years and next to nothing on the business relations in the case The Great Soviet Grain Deals and the side because China was sanctioned. We started of China, were Opening of the China Market At the time, Michel Fribourg said that the from zero into projects of some size. That was considered very deal was the largest single grain and freight The fifth significant event involved the a formidable task. Now with a number of important by the transaction in Continental Grain’s history initiation of trade with the Soviet Union and partners in China, Continental Grain is able leaders of the and would “ make a significant contribution China. to help the Chinese feed a billion people.” country.” toward solving the country’s balance of Soviet Union payments problem.” After weeks of intensive and secret 50 Global exPanSIon In the 20th centurY 51 two historic Grain Deals with russia

Michel Fribourg looks on as Nikolai Belousov signs the historic ten million ton grain deal in New York.

Signing of the one million ton wheat contract in Moscow, January 7, 1964.

Text from the plaque presented to Nikolai Belousov and associates on July 11, 1972 (left to right) Gustav Meerof, Continental agent for Eastern Europe, Leonid Kredov, VP Exportkhelb - Moscow, Ben Nordemann, Continental Grain - New York, Leonid Matveev, President Exportkhelb - Moscow, Roy Folck, VP Continental Grain - New York. Global exPanSIon In the 20th centurY 53 The story of Continental Grain is a story of a great family that has kept traditions and particular efforts through whole The grain deal also helped to smooth the Meanwhile, in November 1971, in a deal succession of generations, political path to what was then called personally arranged by Michel Fribourg, détente. The desire to sell grain to the Continental Grain continued its developing which is very difficult to do. Soviets converged with the desire to engage relationship with the Soviets by selling the Soviets on as many fronts as possible, them 900,000 tons of U.S. government They have been an effective creating linkages between economics and surplus barley and two million tons of corn. politics, and giving the Soviet leadership a In early 1972, moreover, Continental Grain long-term vested interest in developing a scored another achievement with the commercial enterprise, but one working relationship with the United States. Soviets, selling them nearly six million tons “At the time, many people thought that it of American grain and soybeans, plus an never questioned their sense of was morally wrong to ‘deal with the undisclosed amount of foreign foodstuffs enemy,’” notes Charles Fribourg, Directeur after Soviet crops failed because of bad public service. They are a General, Arlon Group (Europe) S.A., and a weather.. member of the company’s board of private company that’s been directors. “It was the Cold War and the deal was very controversial,” he adds. “MF saw the opposite; he saw it as a political opening run as if it’s a public company, that would reduce tensions, and that’s what happened.” And, of course, it helped to feed which they did not need to do. a starving population. They’ve been meticulous in their ethics, commercial China orientation and patriotic sense This lucrative trade agreement with the Soviet Union was followed more than a of country. decade later by a similar agreement with

HENRY KISSINGER Continental Grain Board Member 54 Global exPanSIon In the 20th centurY 55

the People’s Republic of China, when To foster these key relationships, Michel Continental Grain became the first Fribourg became the founding director of company to export American grain to that the US-USSR Trade and Economic Council country. This occurred just prior to the and the US-China Business Council, as well Nixon administration’s efforts to restore as a member of the prestigious Council on diplomatic relations, which included the Foreign Relations.. then-president’s historic trip to Beijing.

European management team, February 1984 (left to right): Fritz Mudde, Joseph Fainas, Vart Adjemian (2nd row), Poul Schroeder, Pablo Pastega, Filippo Galli, Paul Fribourg

Grain Trading Expansion million tons abroad. To move the products By this time, Continental Grain was it sold, the company operated numerous handling approximately a quarter of the country grain elevators, 13 river stations, 65 world’s international grain shipments and a barges, and eight North American port fifth of the grain exports of the United elevators. The company also leased States. The company held three million hundreds of railroad cars and as many as 25 tons of domestic storage capacity and half a cargo ships. 56 Global exPanSIon In the 20th centurY 57

On December 22, 1977, Continental Grain integrated worldwide communications suffered a major setback when a massive system that fed 5,000 messages a day in series of explosions destroyed its grain and out of the New York headquarters. elevator in Westwego, Louisiana, part of the Messages would come from posts in company’s New Orleans operations and the Europe, Asia, Latin America and the Middle company’s largest grain export facility. East, reporting on bids and offers for grain, Static electricity set fire to grain dust crop and weather conditions, as well as destroying 45 of the facility’s 72 silos; 36 political and economic trends, etc. workers lost their lives. A year later, At the time, Michel Fribourg attributed the Continental Grain announced that it would company’s success to its inherent flexibility, invest $200 million to rebuild its New due to its privately held status and the Orleans site, constructing a new fire-safe entrepreneurial spirit of its people. “Our elevator. management, indeed our entire business, is Since intelligence gathering was another based on what human beings can key to successful grain trading, Continental accomplish,” he said. Grain maintained by the early 1970s, an In a book about multinational corporations, “Global Reach”, the authors described the corporate leaders who emerged after the war as “world managers,” because they were the first in history “to make a credible try at managing the world as an integrated unit.” Continental Grain during this period, led by Michel Fribourg, was a perfect example of this trend. Diversifying from Grain Trading to Agri- Industries and Financial Services Against the backdrop of these groundbreaking trade agreements, Continental Grain embarked on an Global exPanSIon In the 20th centurY 59 This successful enterprise is rooted in the ethics and value system that animated the company over the decades and generations. I think Michel network of offices. Its original purpose was In its trading area, Continental Grain to provide hedging services to Continental diversified into ownership of transportation Grain’s customers to help them manage assets and became a leading player in the inherited these values of their risks. inland barge business (ContiCarriers and The company also set up Continental Terminals), and the shipping business with integrity, steadfastness and a Milling Corporation, which owned and the creation of the Overseas Shipholding Group in partnership with the Recanati long-term view of protecting family. The company also diversified into aggressive acquisition strategy during the trading of other commodities such as rice, the family interest, and those 1960s and 1970s, to broaden the company’s where it became the world’s leading rice spheres of operation in different but related merchant under Raphael Totah. In addition, agribusiness sectors. This became the sixth ContiChem-LPG and ContiMetals were values are still in place even significant event to transform the company. established as well as ContiCotton, which engaged in cotton merchandising globally. though the nature of the In 1965, the company acquired a 51 percent interest in Allied Mills, Inc., of Chicago, By the early 1970s, more than 100 Illinois, an animal feed producer, later companies had been added to Continental business has changed… acquiring the other 49 percent interest. operated feed and flour mills in Central and Grain, which had expanded its operations Allied Mills became the industrial arm of South America, the Caribbean, and Zaire. globally in more than 50 countries. The ideas of trust and integrity Continental Grain. Beginning under the Then, in late 1971, the company vertically In the 1980s, Continental Grain also leadership of Roy Folck, first CEO of Allied expanded from the flour to the bread expanded into financial services sector by – and I keep stressing for Mills, and then by Donald Staheli who business with the acquisition of Oroweat acquiring a small specialty finance and succeeded him, Allied Mills expanded over Baking Company on the west coast, and barter trading business. This business the long term – are still the the years to include poultry, beef, pork and Arnold Bakery on the east coast, to create a eventually transformed into ContiFinancial pet food businesses in the United States. leading nationwide bread business. Corporation, a mortgage origination and hallmark of Continental Grain In 1970, Continental Grain also entered the During this period, Continental Grain also asset securitization business, which later commodities futures brokerage business entered the oilseeds crushing business. The became one of the leading sub-prime today. with the creation of ContiCommodities. company built and acquired facilities in the mortgage companies in the United States. Over time, it became a leading commodities United States, Argentina, Brazil, Paraguay ContiFinancial was then taken public in futures brokerage company with a global and England. 1996 on the New York Stock Exchange. RON DANIEL Former Continental Grain Board Member 60 Global exPanSIon In the 20th centurY 61

Paul Fribourg and Don Staheli

Shortly thereafter, in the spring of 1990, Paul Fribourg assumed leadership of the consolidated World Grain, Oilseeds and Merchandising, and General Commodities group and was elected a director of the The Board of Directors is formed (left to right): Don Staheli, Henry Kissinger, Arthur Liman, Michel Fribourg, Morton Sosland, Walter Goldschmidt, Olivier Wormser company.

Transforming Organizational Structure McKinsey & Company Director and former Paul Fribourg’s career at Continental Grain and Governance Managing Partner, was the adoption by began following his graduation from Amherst College in 1976, when he joined As Michel Fribourg turned 65, and to Michel Fribourg of one of McKinsey’s key the company's Memphis, Tennessee office address the growing complexities of recommendations to establish a formal as a grain merchandiser. Rising in the running a worldwide business, he took two Board of Directors for the company, on the company, Paul Fribourg had exerted his important steps. condition that Ron Daniel would become its first member. Other founding board own influence by realigning its The first was the creation of an Office of the members included Morton Sosland, Arthur international grain and oilseeds operations Chief Executive, comprised of himself, Liman, Henry Kissinger, James to create Continental Grain's World Grain Donald Staheli, and Walter Goldschmidt, Wolfensohn, and Olivier Wormser. and Oilseeds Processing Group. dividing the company’s operations into five In 1997, the senior management of business groups – financial services, Donald Staheli, who had joined Allied Mills Continental Grain further evolved, as world meat, world milling, in 1969, became president and chief Michel Fribourg became chairman transportation and natural resources, operating officer of Continental Grain in emeritus, Donald Staheli became chairman and world grain and oilseeds processing 1984. Four years later, Michel Fribourg of the company and Paul Fribourg was – and appointing an operating head to retired as chief executive, and Donald named president and chief executive officer. each. Staheli became the first non-Fribourg to hold that position in the company's then The second step, following a key Left to Right: Don Staheli, Michel and Paul Fribourg 175-year history. strategic study conducted by Ron Daniel,

Ron Daniel

‘ ‘ ‘ ‘ Relationships with partners are key. They're looking for a good reputation The company was known for its high reputation, for people who could be and clear ethics. Just as important for the Fribourg family and the depended on and for a willingness to explore new areas with a great deal of company is our reputation for ethics, performance and having the best ingenuity. It's a reputation that developed from generation to generation, and people in the industry. I'm sure it's still being carried out. BERNIE STEINWEG BRIAN ANDERSON Former Senior Vice President, Government and Senior Vice President & General Manager, Trade Policy, Continental Grain ContiLatin Division, Continental Grain

Continental Grain has always been about people – from feeding the world to treating employees, customers and partners with MF was a man who inspired people around him. He approached integrity and respect. me like a friend, not a subordinate.

ELTON MADDOX SAL AMRAM President and Chief Executive Officer, Former Senior Vice President and ‘‘ Wayne Farms LLC ‘‘ General Manager, Rice Division, Continental Grain

I’m very proud of having worked in the company — I think these 25 years What makes Continental Grain different is a real focus on the whole individual. Not were the best years of my life. Everything that I learned from a professional just what you can produce, but also how happy you and your family are and a lot of point of view — even a human point of view-it was a wonderful experience. that comes from Paul. I was exposed early on to big responsibilities, which was rather unusual at the time. A lot of my peers were people double my age. It was a very good BEN FISHMAN Managing Principal, Arlon Group opportunity to learn about all the phases of management.

PABLO PASTEGA ‘‘ ‘‘ Former President (CEO), Finagrain, Continental Grain the tapestries of Michel fribourg recalibrating for the 21st century 1999 Continental Grain completes the sale of its commodity grain trading business to 2005 2008 Cargill, Inc. and begins operating under the ContiGroup and Smithfield Arlon invests with Monarch name ContiGroup Companies, Inc. With the Foods combine their cattle feed 2007 Alternative Capital to assist sale of this business, the company turns its businesses in a 50/50 joint ContiGroup completes the them in the repurchase of principal focus to meat proteins. venture to create Five Rivers merger of Premium Standard their management company. Ranch Cattle Feeding LLC. Farms into Smithfield Foods.

2000 2006 2009 Wayne Farms opens its ContiGroup sells its Animal Arlon creates Arlon Food and Agriculture newest further processing Nutrition Division (formerly Partners, jointly sponsored by Continental Grain facility in Decatur, Alabama the Wayne Feeds Division) and Rabobank, the leading food and agriculture (now known as Decatur West). business to Hubbard Feeds, commercial bank in the world, to invest in Inc. of Mankato, Minnesota. 2008 private equity food and agricultural opportunities ContiGroup reassumes the name in North America. Arlon’s public equities strategy Continental Grain Company and invests in global public equities and select announces the formation of Arlon commodities, deploying both Continental Grain's Group, a private investment as well as third party capital. group that invests the company’s permanent capital, as well as third-party capital, across multiple strategies to create long-term value. 1999-2009 recalIbratInG for the 21St centurY 71

with rapid technological changes, regulatory pressures and mounting financial obligations, the time had come for the continental Grain company to rethink its future.

As the company approached the year 2000, company and put us temporarily in default the challenges of the commodities trading on our bank agreements. The grain business increased. Continental Grain was business required enormous lines of credit finding it more difficult to compete with the to finance inventories around the world, other major grain trading companies that and we were constantly at the mercy of our had expanded much more aggressively into banks. The whole company was at risk.” grain processing (soybean crushing, corn Continental Grain made the extraordinarily wet milling, flour milling and ethanol). difficult decision to sell its traditional grain Also, U.S. grain exports began to decline. trading business. Everyone, including the The changes that had been sweeping the board of directors, the management business were profound and permanent, committee and Michel Fribourg, believed it especially the integration of grain trading was necessary for the long-term survival of and grain processing. Further, the rapid the company. Top: Breaking ground on new hog emergence of biotech firms and genetic operations following PSF engineering strengthened the link between In 1999, Continental Grain completed the acquisition of Lundy’s. the seed, the farmer, the merchant and the sale of its worldwide commodity marketing Right: Closing bell ceremony for group (including its grain business) to ContiFinancial Corporation IPO. processor. This put Continental Grain, primarily a grain handler, at a significant Cargill, Inc., opening a new era in the disadvantage. company’s nearly 200-year history. “We also found ourselves in a difficult ”The sale of the grain business was a financial position when ContiFinancial, the significant event in the history of company's asset securitization business, Continental Grain Company,” Paul imploded in 1998,” Paul Fribourg recalls, Fribourg explains. Until that time, every “which threatened the health of the parent business was owned, financed and 72 recalIbratInG for the 21St centurY 73

guaranteed by the parent company. A catastrophic event in any single business could have brought down the entire firm. The decision was made to spin off every business as an independent entity with its own balance sheet, board of directors, and management team, thus creating a holding company at the parent level. This was an idea first conceived 25 years earlier by the late Roger Kline, a former member of the company’s board, when he referred to Continental Grain as an ‘agribusiness merchant bank’.” Roger Kline This transformation unlocked Continental Paul Fribourg continued, “The sale of the Grain’s ability to invest in a wide array of grain business was the first critical step in food and agricultural companies in a more deleveraging and derisking Continental flexible ownership structure. The company Grain. We could never again put the total was able to create a significant number of enterprise at risk. This began a 15-year joint ventures, partnerships, public entities process of getting the parent company to and private equity holdings as a result. competitors in their respective industries. financially and legally independent, such as zero net debt and having each business In certain instances, the company exited Wayne Farms. The New Millennium Brings Sweeping stand on its own. It was also the beginning businesses such as U.S. animal feed, bread Changes and New Opportunities An example of this evolution is what the of a new strategic orientation for the and the oilseeds crushing operations. In company did with its pork business. company in which we became more of a Prior to the sale of the grain business, other cases, the company merged its Continental Grain had a modest hog food, agribusiness and commodity Continental Grain’s industrial operating businesses into larger entities to create farming business. In 1998, the company investment company.” businesses already represented a significant scale (for example, Continental Grain’s pork merged this business into Premium part of the company. The challenge the Years later, after the company fully achieved business). In yet other situations, Standard Farms (PSF), the largest fully company now faced in having every these objectives, Roger Kline described the Continental Grain maintained 100 percent integrated pork producer in the industry, business stand on its own was to create company as being “recklessly conservative.” ownership, but the business became both thereby acquiring a 51 percent stake. PSF viable business entities that were leading recalIbratInG for the 21St centurY 75

It’s a natural move to gradually transition from being a trading

expanded by purchasing smaller pork company to an investment companies like The Lundy Packing Company in 2000. In 2006, PSF went public and then, in 2007, merged into company that can build on Smithfield Foods, Inc., making Continental Grain the largest shareholder of Smithfield its past and its knowledge, Foods with two seats on its board. Over seven years, Continental Grain’s pork business had gone from 100 percent to continue to operate ownership of a modest-sized hog farming internationally, and take advantage of the future.

operation to having a significant stake in the JAMES WOLFENSOHN Continental Grain Board Member leading integrated pork company in the U.S. Pending regulatory approval, Smithfield Foods will be acquired by Shuanghui International Holdings, Ltd., a Hong Kong- based privately held company with majority ownership of China’s largest meat processing company. 76 recalIbratInG for the 21St centurY 77

standalone business. In 2005, Continental Grain and Smithfield Foods combined their cattle feeding businesses in a 50/50 joint venture to create Five Rivers Ranch Cattle Feeding LLC, the largest and lowest-cost cattle feeding company in the United In 2000, Continental Grain's former States. Continental Grain and Smithfield poultry division became Wayne Farms LLC, Foods had tried to identify and purchase a a standalone business. During this decade, leading beef packing company to create a Wayne Farms expanded its fresh chicken vertically-integrated business, but were business and entered the processed unable to find the right opportunity. In (cooked) chicken business by building its 2008, JBS S.A. signed a definitive second state-of-the-art further processing agreement to purchase both Five Rivers and plant in Decatur, Alabama. Smithfield Beef Group, signifying Continental Grain’s exit from the cattle In 2000, Continental Grain’s former cattle industry. division became ContiBeef LLC, also a the leading salmon and trout farming operation in Maine. In 1998, a processing plant was added and a leading retail branded salmon company, Ducktrap River Farms, was acquired. In 2001, this business was merged into a public Norwegian salmon company, Fjord S.A., creating one of the leading, global In aquaculture, the company teamed up in aquaculture companies. Continental 1990 with its long-term partner, Seaboard Grain eventually sold its position as this Corporation, and built from the ground up business matured.

‘ ‘ ‘ ‘ We’re able to run the business with a good amount of freedom. But It’s extraordinary to think about an organization that has weathered at the same time, there’s a high degree of accountability. It’s a very so many storms, come through so well, prospered, regrouped and strong organization where I can use my experience to move things prospered again. forward. I think I have a great future here. JIM MANZI Continental Grain Board Member CLINT RIVERS Vice President and General Manager, Fresh Business Unit, Wayne Farms (hired in 2012)

The Company has created a global investment platform focusing on agriculture and food. We also have a unique hybrid philosophy, which I am particularly proud of the fact that after the earthquake in Haiti, in combines operation and investment. Our operation team and investment team December 2010, which leveled our flour mill, we decided to rebuild. Our work together to enhance Conti's presence on both sides. The company values social responsibility played an important part in this decision. I think both my long-term development. The trust and long term local view set Conti apart companies are proud of the fact that we have the newest, most modern flour from other similar foreign companies in China. mill in the Caribbean, and we continue to contribute to the Haitian economy.

HANK XU STEVE BRESKY ‘‘ Managing Director, Continental Capital Ltd. (hired in 2011) ‘‘ President and Chief Executive Officer, Seaboard Corporation

Continental Grain is a perfect example of a success story for a family business. When I wake up in the morning, what I’m most excited about is Whatever they do, they always do with a vision of the business that must coming to work with the people we have here. We’ve created a grow, with ethics. They see long-term investments instead of short-term team that not only works well together, but really enjoys being financial bets. together. They’re all exceptionally smart, diligent people, with a high degree of integrity. CHRISTIAN FUCINA Former Managing Director, Les Moulins d'Haiti (LMH) DAVID TANNER Executive Vice President - Investments, ‘‘ ‘‘ Continental Grain the tapestries of Michel fribourg today and tomorrow toDaY anD toMorrow 85

while the profile of continental Grain company has changed, so too has its potential for growth as an owner, operator and investor in the vast, multifaceted global food and agriculture industry. Continental Grain and Arlon Today

corporate Group Investments arlon Group

wayne farms llc Private equity Investment Group – contilatin Division arlon capital Partners

contiasia Division arlon food and agriculture Partners asset Management Group Investor in middle market food and agriculture companies in the U.S. Partnership Investments arlon latin america Partners burger King Investor in middle market food heinz and agriculture companies in Brazil and select Andean countries castleton commodities Int’l overseas Shipholding Group continental capital ltd. Investor in food and agriculture businesses boa vista in China and other emerging Asian countries

arlon capital Partners (now fully invested) Investor in financial services companies and other non-food and agriculture companies (Carlile Bancshares, Northeast Bancorp, Grandpoint Bank, Monarch Alternative Capital)

Public equity Investment Group – arlon opportunities Investors Investor in publicly traded food and agricultural equities and select commodities futures 86 toDaY anD toMorrow 87

Through decades of growth, changes and pounds of poultry are raised in over 1,000 volume and packaging are available to meet challenges, Continental Grain has grown to individual farms, and processed annually in any specification. become one of the largest privately held Wayne Farms’ eleven facilities. From its Wayne Farms’ Further companies in the world with diversified farms to its customers’ kitchens, Wayne Processing Unit operations and investment activities. Farms’ chicken is sold under the banner of During the past two decades, Wayne Farms Building on the entrepreneurial legacy of three brands, WAYNE FARMS®, DUTCH not only expanded its fresh chicken the original grain trading business and QUALITY HOUSE®, and PLATINUM business, but also its processed (cooked) Continental Grain’s extensive knowledge HARVEST®. Wayne Farms is comprised chicken business by building two state-of- and networks in the world of food and of two business units — fresh and further the-art greenfield plants in Decatur, agriculture, the company today is in the processing. Alabama. Wayne Farms is a further process of building one of the leading processor of chicken meat, marketing investment companies in this field. Being ready-to-cook, ready-to-eat and custom- private and having long-term committed designed convenience foods. As a pioneer capital and flexibility in the types of product, assuring, strict product quality and in further processing, the DUTCH ownership structures and partnerships food safety throughout the process. This QUALITY HOUSE® poultry brand creates a unique business model. Wayne Farms’ Fresh Business Unit includes managing complexes of feed mills, became known for innovation in a wide Continental Grain today is comprised of Wayne Farms’ vertical integration allows hatcheries and processing plants to ensure range of value-added products for two core groups: Corporate Group control of the complete poultry product production of the highest quality birds, foodservice, food manufacturing, Investments and the Arlon Group. process from feed to final (raw or cooked) optimum food usage, formulation and restaurants, club and grocery stores, private Corporate Group Investments conversion. Also, complex management label manufacturers and other prepared allows for the safest and most efficient food marketers. Wayne Farms LLC processing and packaging. The largest wholly-owned subsidiary of In 2011, Wayne Farms established a formal Wayne Farms offers a wide range of fresh Continental Grain, Wayne Farms LLC, has board of managers, which includes three chicken cuts and packaging to meet grown over the past 40 years to become to world-class independent directors. The customer’s needs. Whether packaged under the fifth largest poultry producer in the company today is recognized as a leader in the WAYNE FARMS® fresh poultry brand United States. With a focus on quality every the poultry industry and as an innovative or privately packaged for club stores, step of the way, more than 2.5 billion food manufacturing company with a supermarkets and processors, quality, size, solution-based approach to its business. toDaY anD toMorrow 89

Wayne Farms’ customers seek its strategic Relationships, first developed by business point of view along with its food expertise — because its approach, and its success, revolves around their success. Michel and continuing to this day, ContiLatin ContiLatin is the successor organization to have spanned generations and ContiMilling and is comprised of Latin American and Caribbean industrial agriculture businesses, one of which have become the lifeblood of this Continental Grain has owned for almost 40 years. These businesses — located in Paraguay, Peru, Ecuador, Venezuela and company. Relationships are what Haiti — are focused on some form of processing, including oilseed crushing, flour milling, feed milling, poultry processing, as this company was built on. well as baking, pasta, and commodity origination and distribution. With such a wide range of industrial JERRY ROSENFELD operations and investments in this Continental Grain Board Member geography, ContiLatin invested in smaller countries in the Southern Hemisphere where the company can have a larger Capiata plant outside footprint and, over time, develop close manage and run day-to-day operations. of their holdings to retain an important Asuncion, Paraguay partnerships with local food industry The willingness to craft partnerships in stake. At the same time, these associations and national clients. different forms has opened many doors arrangements enable ContiLatin to provide Continental Grain’s ownership ranges from over the years. This allows family-owned capital and technical support to spur growth 100 percent to less than 25 percent. In some businesses that want to sell only a portion and expansion. In addition to local partners, cases, it relies on its local partners to 90

the company also has had a long-standing is a major producer of consumer products partnership in Latin America with Seaboard in the Asunción area. ContiParaguay is the Corporation, a global food, energy and longest held operation in ContiLatin and transportation company. was purchased by Continental Grain in 1978. Continental Grain in Haiti For years, Haiti’s sole flour mill had been owned by the government, was only marginally profitable and eventually failed and was closed down. While the asset sat In a joint venture with local partners in idle, Haiti had to import flour, losing the Venezuela, for example, ContiLatin is opportunity to produce its own flour and invested in one of the top integrated poultry provide jobs for its citizens. After being companies in the Maracaibo region of the abandoned for a decade, the mill needed a country. In Ecuador, ContiLatin is a partner significant infusion of capital and in the largest flour milling company (which professional management to make it includes consumer pasta production and operational and profitable, which required commercial bread baking) as well as a privatization. In October 1997, at the partner in one of the largest independent conclusion of protracted negotiations, the feed manufacturers. Haitian government transferred majority ownership of the inactive mill to a In Peru, ContiLatin is a co-owner of the partnership that included Seaboard largest commodity marketing group, with a Corporation, Continental Grain and a group dominant share of corn and soymeal sales of local investors led by Unifinance, S.A. to third parties. It is also principal owner and operator of one of the leading Fast-forward 15 years and the flour mill, Les integrated poultry operations. In Paraguay, Moulins d'Haiti, was an unqualified ContiLatin owns and operates one of the success, providing flour to the people of largest and oldest crushing operations, and Haiti and employing 170 of its citizens. But

Les Moulins d’Haiti flour mill, located in Port-Au-Prince, Haiti 92 toDaY anD toMorrow 93

ten minutes after Haiti's devastating feeding and husbandry business in a joint ContiAsia includes over 30 wholly-owned earthquake in January 2010, the flour mill, venture with Charoen Pokphand (a large and joint-venture companies managed like the rest of Port-au-Prince, lay in ruins. Thai-based multinational), and is through separate business units: ContiFeed Seaboard Corporation, Continental Grain recognized as the leader in introducing Group, Conti Chia Tai International, and and their local partners invested millions of modern agricultural practices in China. Hong Wai Foods, as well as DaChan Food dollars into rebuilding and improving the Today, through ContiAsia, Continental (Asia) Limited. mill, which reopened in December 2011. Grain is an operator and strategic investor “We wanted a flour milling business that in a wide range of businesses in Asia, would be staffed with local people to serve primarily involving animal nutrition and the community as well as international health, genetics, meat production, investors — a business that would last for processing and merchandising. generations,” explains Paul Fribourg. “We could have exited and invested the insurance proceeds elsewhere. However, we were committed to Haiti and today we have a state-of-the-art facility that is expanding beyond flour milling into related areas,” he adds. ContiAsia Continental Grain, through its ContiAsia division, has had an active presence in Asia food and agriculture for more than three decades. In 1981, Continental Grain, based 0001 on its historic grain trading relationship with the Chinese, was granted business

license Number 0001 for overseas 0001 investment in the People’s Republic of China. The company established an animal

Business license Number 0001 for overseas investment in China, granted in 1981 toDaY anD toMorrow 95

Working with different people and cultures from all over the Asset Management Group The Asset Management group, meanwhile, is the equivalent of an endowment for the world is in our DNA. We’re company and the family. It is a significant pool of liquid capital managed by leading very comfortable with it. It’s outside professionals. Core investments are in U.S. and international equities, fixed income, private equity and hedge funds. second nature to us. MF Partnerships and Family Investments Another vital partnership example is would be thrilled to see how Continental Grain’s collaboration with 3G Capital (a leading Brazilian investment group) in the acquisition of Burger King in 2010 and Heinz in 2013. The relationship the world has evolved and In 2012, along with other partners, with the three principal owners of 3G Continental Grain invested in Castleton Capital goes back over thirty years. Commodities International (CCI), formerly Continental Grain is actively involved in how the company has known as Louis Dreyfus Highbridge these ventures contributing its food industry Energy, a leading merchant energy experience and participating as a board company. Paul Fribourg has a seat on both member (Burger King). adapted to it. the CCI board and executive committee, and Michael Zimmerman, Vice Chairman CHARLES FRIBOURG of Continental Grain, is also a board Continental Grain Board Member member. The investment marks the return, and Directeur General, Arlon Group somewhat tangentially, of the company to (Europe) S.A. physical commodities trading.

‘ ‘ ‘ We are very pleased and privileged to have Continental Grain, with its unparalle‘ led food industry experience, as our investors and partners in our recent acquisitions in the global food industry, namely Burger King and Heinz. In particular, having What interested me is the collegial culture with a focus on people and relationships. Paul Fribourg on the Burger King Board has been instrumental to us, and to me And it’s a company that engages in exciting transactions, continually exploring new personally, as we work hard in improving and growing our business in a very investment opportunities in new businesses and new places around the world. competitive industry. The strength of Paul's relationships and contacts at the highest levels around the world do not cease to impress me and my partners at 3G. JONATHAN JACOBS ALEX BEHRING Vice President, Legal - Continental Grain (hired in 2011) Co-founder, Managing Partner, and Board Member, 3G Capital

Arlon is not like a typical private equity firm. I was impressed with their long- Every single person I have met at Conti is not only a good professional, term aspirations and patience, and their pristine reputation. They invest in but an outstanding person. Having outstanding people is what makes high-quality management teams and take those investments to the next level. Conti different from other companies I know.

JERRY SHAFIR JUAN POMBO ‘‘ Founder, Kettle Cuisine ‘‘ Operations Manager, ContiLatin del Perú (hired in 2011)

(In talking about the Haitian earthquake) the flour mill that was destroyed was responsible for feeding a good part of Haiti. It was an important busi - ness and humanitarian asset. Theoretically, we could have taken our insur - ance proceeds and run. But there was never a question of that. It was a It’s not about the last 200 years; it’s about the next 200 years.

question of how quickly we can go forward and rebuild the mill, and in the ALAN FISHMAN meantime, what could we do to help the families of our employees who died Continental Grain Board Member or who were injured or dislocated. STEPHEN VOLK ‘‘ Continental Grain Board Member ‘‘ 98

2013 Arlon implements a Latin American private equity strategy focusing on food and agriculture based in São Paulo, Brazil. Continental Capital Ltd. co-sponsors an investment strategy based in 2010 Beijing focusing on food and Holding, LP); a Mexican refrigerated foods Through 3G Capital, Continental Grain agriculture in China. participates in the acquisition of Burger Arlon Group company (Excelline Food Products, LLC); a King and then in 2013, of Heinz. company producing and marketing chia Arlon employs two alternative investment seeds from Australia (The Chia Company), strategies to identify food and agriculture and a large Yum Brand franchisee with investment opportunities. Taco Bell, KFC, and Golden Corral Arlon Capital Partners (ACP) restaurants (K-Mac Holding Corp.). Arlon Capital Partners (ACP) is Continental Grain’s private equity arm focused today on the food and agricultural sector. Within ACP, Arlon has created a number of sector- focused strategies that invest Continental contInental GraIn Grain’s as well as third-party capital. Arlon Food and Agriculture Partners contInueS forwarD (AFAP) Arlon Food and Agriculture Partners (AFAP), was started in 2009 and is sponsored by Continental Grain and Rabobank, the leading commercial bank in 2013 2012 Continental Grain turns 200. food and agriculture, and one of the Continental Grain becomes company’s oldest and most important part of an investment group banking relationships. Today, AFAP has acquiring Louis Dreyfus invested half of its $335 million of Highbridge Energy, which is rebranded Castleton committed capital into six portfolio Commodities International LLC. companies. They include the largest organic branded sugar and sweetener company in the U.S. (Wholesome Sweeteners); a leading soup company (Kettle Cuisine); a fresh prepared foods business (HMR Foods 2010- 100 toDaY anD toMorrow 101

China is a major demand center for food Since then, the Monarch funds have and agriculture as a result of the country’s outperformed most of their peers and the large population and growing middle class. firm has grown to over $5 billion of assets Asian countries are looking for best under management. practices to improve domestic production of Arlon Opportunities Investors (AOI) food and agriculture by increasing crop and Arlon’s second investment strategy, Arlon livestock production, and implementing Paul Fribourg and Yuan Zhan Guo establish new Rmb fund partnership in China. Opportunities Investors, invests in public better food safety and security practices. value-added view on its investments and equities and related commodities in the Arlon Latin America Partners (ALAP) Continental Capital Ltd. believes these targets emerging, high-growth food and food and agriculture industry. Building on its success with AFAP, Arlon improvements and innovations and the agribusiness firms in China and select recently implemented a Latin American continued demand for agricultural products Through Arlon’s two strategies, the developing Southeast Asian countries. private equity strategy, Arlon Latin America will create numerous investment company is able to seek new global growth Partners based in São Paulo, Brazil. The Continental Capital Ltd. capitalizes on opportunities. opportunities across the entire food and company believes that Arlon can capitalize agriculture supply chain, tapping into the Continental Grain’s early entry into China Arlon Capital Partners (now fully on its deep food and agriculture expertise many worldwide relationships Continental in 1981 and its leadership in introducing invested) and local industry contacts in a growing modern agricultural practices in China. Grain has forged over the decades and market and take advantage of the numerous Continental Grain and Continental Capital Between 2008 and 2010, ACP also working closely with both old and new opportunities in Latin America to create operate today as a complementary hybrid participated in three regional, commercial investment partners. banking company investments (Carlile value-added partnerships with strong operating/investment company. The The company believes that Continental Bancshares in Texas, Northeast Bancorp in management teams. operating team grows its businesses both Grain’s history, networks and partnership- New England, and Grandpoint Bank in Continental Capital Ltd. organically and by pursuing strategic orientation help to position Arlon to relationships in animal protein-based California). Additionally, when the Recently, the China-based subsidiary of identify and invest in the best ideas businesses in China. Simultaneously, the principals of Monarch Alternative Capital, a Continental Grain, Continental Capital Ltd., available in the food and agriculture space. investment team, with the involvement of distressed debt investment firm, sought an co-sponsored a third investment strategy Arlon has approximately $750 million in the operating team, invests alongside investor to help them repurchase a stake in based in Beijing, focusing on food and assets under management and is management teams of food and their management company, Arlon was a agriculture in China and other areas of headquartered in New York, with a agribusiness companies and supports their logical partner. This was based on ACP’s Asia. Continental Capital Ltd. makes direct presence in São Paulo, Brazil, and in growth by leveraging Continental Grain’s willingness to invest in a non-traditional investments in private companies Beijing, Shanghai and Hong Kong, China and Arlon’s global food and agribusiness deal structure, its long-standing throughout Asia, with a focus on China. through its affiliate, Continental Capital Ltd. expertise, network and investment skill set. relationship with the Monarch team, and Continental Capital takes a long-term, knowledge of their investment expertise. 102

Continuing the Legacy of Continental future. If we can keep these elements in a Grain Company healthy balance, we have a great chance to keep the legacy of Continental Grain alive Continental Grain has come a long way in for many years to come. 200 years — from a small European grain trading business to an active, global food, Future generations will face new challenges agribusiness and commodities investment and opportunities. They, too, will have to company. The company has achieved a constantly reinvent the company. The unique balance between long-term family entrepreneurial and pioneering spirit that ownership, professional management, comes from the company’s grain trading meritocracy — giving capable people the legacy should serve them well in the next chance to build unique businesses — and a 200 years. In the words of Steve Jobs, they governance structure of wise people who will need to “stay hungry and stay foolish.” care deeply about the company and its

We thank all of you who have played a role in bringing us to where we are today. It’s been a great team effort, a great journey and our future success is due in large part to your loyalty, dedication and efforts. Paul Fribourg on behalf of Continental Grain Company