Continental Grain 200th Anniversary Book

200 Yearsof Global Partnerships

200

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.

DeDIcatIon

1913-2001

In MeMorY ofMIchel frIbourG

a Message from chairman and ceo Paul fribourg . . . . . . . 6

the fribourg family legacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Profile of Michel fribourg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4

an overview of the Grain Industry . . . . . . . . . . . . . . . . . . . . . . 1 8

the foundation Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 6

Global expansion in the 20th century. . . . . . . . . . . . . . . . . . . 3 8

recalibrating for the 21st century. . . . . . . . . . . . . . . . . . . . . . 6 6

today and tomorrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2

table of contentS

Designed and Produced byOnward Publishing Inc.6 Bayview Avenue, Northport, NY 11768631-757-8300

a MeSSaGe froM chaIrMan anD ceo Paul frIbourG 7

a MeSSaGe froM chaIrMan anD ceoPaul frIbourG

Grain is one of the few resources that is central tomodern civilization. It is grown on more land areathan any other commercial food, and there is moreworld trade in grain than any other crop. It’s nowonder that an important industry grew from thiskey commodity.

For 200 years, starting in Europe and then in theU.S., Continental Grain Company has played animportant part in the global development of thegrain industry, and more broadly agribusiness.

Starting in 1813, and into the 21st century, throughsix generations of ownership, we have been veryfortunate to build and sustain a successful anddiversified global business that now includes broadfood and agricultural interests, as well as long-lasting partnerships with talented managementteams around the world.

While we have achieved a notable legacy of success,it hasn’t always been easy. There were times whenwe had to change our strategy and make difficultdecisions to ensure the very survival of thecompany. But survive we did.

Each generation kept the business alive byreinventing the company while preserving our long-standing culture and values. We made sure tocontinue the legacy and seize new opportunities tosustain and grow the company.

But it’s more than a story about growth. ContinentalGrain, especially in the pre-Internet age, was able topromote international trade and partnerships,ensure the exchange of vital goods, help buildeconomies around the globe, and foster afoundation for long-term political cooperationamong nations.

Being privately held, we could take risks with a long-term view that most public companies wouldn’t beable to do. And sometimes those risks weresignificant, as the company pioneered new markets,new commodities and untapped parts of the world.

In the mid-20th century, our father Michel – knownto everyone as MF – possessed a world view and aunique ability to engage people and ideas, whichhelped him turn a medium–sized family businessinto a professionally run, global enterprise thatconducted business and forged partnerships in newand exciting regions of the world, from Africa andChina to Russia and Latin America.

Thankfully, MF’s influence remains very much withus, to guide us in our decision making. Oneimportant lesson is to never let success or ego get inthe way. The key is to stay humble and realize thatboth life and business require constant learning,through which we find ways to be better and adaptnew practices and technologies that will help usachieve our goals. We still “consult” with MF onevery key business decision by asking “What wouldMF do?” knowing he will continue to guide us withhis business wisdom.

We also run our business as a meritocracy andshow respect and regard for individuals both insideand outside the company. It follows that ourintegrity and reputation were and are everything – atenet that has carried us through two centuries inan often-turbulent world.

We have had the benefit and pleasure of workingwith many great people over the decades. From ourboard of directors, to our employees, to ourpartnerships around the world, we are so fortunateto have collaborated and continue to collaboratewith the best and brightest people who are alignedwith our mission – people who are wise, thoughtfuland caring, people who are willing to commit theirtime and exchange ideas and opinions.

With the support of so many talented people, andwith a remarkable legacy on which to build, we willcontinue the journey and look forward to the futurewith great enthusiasm.

the frIbourG faMIlY leGacY 9the frIbourG faMIlY leGacY

In April 1997, Paul J. Fribourg was namedchairman and chief executive officer ofContinental Grain Company. His father,Michel Fribourg, became the company'schairman emeritus.

This event marked the sixth generation ofthe Fribourg family to lead the company,going back to 1813 when Michel Fribourg'sgreat-great-grandfather, Simon Fribourg,founded the commodity trading business inArlon, France (which is now in Belgium).Simon's business was nearly two decadesold when the industrial revolutioncommenced, forever changing the face ofEurope and creating fertile ground for theFribourg commodity business to flourish.

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

creating new opportunities for the familybusiness.

In the coming half-century, Europe wouldexperience unprecedented scientificprogress and social change, launchingsignificant and wide-ranging developmentsin industry, commerce and trade thatbrought vast new wealth to westernEuropean countries.

To continue seizing on these opportunities,Michel Fribourg, together with his two sonsArthur and Paul, the former who had takenan active role in his father’s business twodecades earlier, expanded the business

Arthur Fribourg in military dress.

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

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

Simon Fribourg circa 1850.

the frIbourG faMIlY leGacY 1110

geographically and into flour milling,constructing flour mills in Arlon andLuxembourg in the 1890s.

Before the century was over, Europe’sextensive new system of railways would notonly significantly increase the speed ofshipping goods, but would also reduce thecost of transportation by half. And with theproliferation of modern, heavy industriescame large towns and urban centers andthe emergence of a new class of citizensable to survive and prosper in businessrather than by owning or tending to land.

As the effects of this industrial revolutionspread, a society and marketplace for theFribourg business were madeimmeasurably stronger. Around this time,Arthur had assumed leadership

responsibilities for the company from hisfather, Michel.

Arthur then retired and turned the businessover to his sons Jules and René. Jules wasthen only 27 years old and would becomeknown in Antwerp as one of the ablest andmost aggressive businessmen, whosedaring ventures until his death in 1944 ledhim to develop his business into animportant international firm.

The forces that transformed Europe froman agrarian to an industrial society enabledthe Fribourg descendants to flourish in aworld of commerce that included the rise ofmerchants, manufacturers, bankers andcommodity traders. This world wouldinfluence Continental Grain as its businessgrew, first in Europe and then in the UnitedStates, into becoming a major globalcompany.

For Michel Fribourg, trading grain andselling food to the world had a degree ofnobility to it. This gave a sense of pride tothe employees of Continental Grain. Asobserved by Arthur Liman, formerContinental Grain board member, “Peoplewould walk around and say ‘I am a grainman’…a connotation of being somethingthat was almost superior to anybody else onearth.”

Michel Fribourg

Paul and Charlie Fribourg

Arthur Liman

“To carry Continental Grain through itsfirst phases — birth, infancy, and youth,with the trials and errors of the learningprocess — required the qualifications of apioneer. Such a person was my father(Jules), who along with his brother,inherited from earlier generations ofFribourgs, a local Belgian grain-tradingand flour milling business. My father wasa born leader, a man of great ambitionand drive, possessed of a rare tradingsense. He developed the little familybusiness into a worldwide grain-tradinghouse, competing on equal terms with itsmajor rivals. Yet I remember him asbeing rather a shy, modest man with aquick temper and a very warm personality.My father surrounded himself withpartners and associates whosecharacteristics were similar to his own.Together, they had the foresight to create astrong foundation in the New World.”

Portrait of René Fribourg by Salvador Dali.

the frIbourG faMIlY leGacY 13

In the wake of the German invasion ofBelgium and France in May and June 1940,Jules Fribourg and his family gathered inBordeaux and, in fear of what mighthappen in France, decided to leave for theU.S.. Jules died in 1944, as the war wascoming to a close. René took over aschairman of the board, also serving asacting president until Jules’ son Michelreturned from active military duty.

Michel , who was named after his greatgrandfather, took over the company at theage of 31. Under his leadership, ContinentalGrain would successfully navigate both thedevastating aftermath of the war and theopportunities of the 1950s, 60s and 70s,

including groundbreaking and historicgrain deals with the Soviet Union andChina and other significant internationalexpansion.

Upon his college graduation in 1976,Michel's son Paul joined ContinentalGrain. After two decades of increasinglevels of responsibility at the company, hebecame CEO in 1997. Throughout histenure, Paul has guided the company andits transformation from its traditional rolein grain trading to its current position as aninnovative holding company that owns,invests in and partners with a broad rangeof well-managed businesses in the globalfood and agriculture industry.

the frIbourG faMIlY leGacY

After Simon Fribourg founded a smallgrain-trading business in Arlon (which isnow in Belgium), six of his descendantshave led the company from the mid-1800sto today.

Michel Fribourg , Simon’s son, beganworking with his father and expanded thecompany’s scope to include all of the largemarkets in Belgium, helping to providefood to a widening population. Later, asBelgium became a major business center,Michel enlisted his two sons, Arthurand Paul to help him run the business.

In the 1890s, under Arthur’s leadership,the business expanded into the flourmilling business. When Arthur retired, he

turned the business over to his two sons,Jules and René , who had beeninvolved in the growing enterprise sincethey were boys. Under Jules’s leadership,the firm, now based in Antwerp, made itsfirst ventures into international trade in thedecade before World War I.

During and after the first war, Jules andRené took the business to London and thento Paris, where they found themselves atthe center of the international grain trade,including the establishment of businesscontacts in the United States, which Renéhelped to solidify. Jules, a visionary with apioneering spirit, understood that theMidwest region of the United States wasemerging as a major source of grain.

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2 3 4 5 6

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ProfIle of MIchel frIbourG 15

ProfIle ofMIchel frIbourG

Initially, not fully prepared to take over thebusiness when his father died near the endof World War II, Michel eventually gainedthe experience, respect and authority heneeded not only to lead the company, but totransform it into an influential globalcompany encompassing a range ofagribusiness enterprises. At the same time, he left an indelible mark on all whoknew him.

Michel Fribourg’s impact on ContinentalGrain was profound and would be felt forgenerations. The aspirations he had for thecompany were guideposts for setting itsfuture course.

For 53 years, he provided invaluableleadership to the company and to theintricate network of global trade andeconomic cooperation that fueled the 20thcentury. A respected and admired leader ofthis globe-circling industry, Michelpioneered the opening of trade into manynew markets around the world, including

historic agreements with the Soviet Unionand the People’s Republic of China.

Setting Michel apart from most businessleaders was his strong, even driving sense todo what was right. His human touch helpedhim cultivate relationships around theworld. His reputation and that of thecompany always stood uppermost in hismind and in his decisions. And he did not

“To my father, business and family were interchangeable –almost a singular entity.” Paul Fribourg

ProfIle of MIchel frIbourG 1716

That kind of balance and drive requires aspecial person. In many ways, MF wasunusual for the business world. He was,essentially, an introvert — quiet, notparticularly social — yet underneath, heharbored a steel-like equilibrium thatenabled him to take great risks whiledemonstrating loyalty and affection for hisfamily, friends and associates.

Perhaps most important, he understood theimportance of trust and integrity in a toughglobal business — at a time when a deal wasmade on a handshake.

“Add it all up and it’s clear that MF led a fulland complete life, both professionally andpersonally,” Paul explains. “He had no senseof remorse or regret — a man at peace withhimself and what he had accomplished. Ifhe had planned out his life, he couldn’t havescripted it any better.”

Today, Michel Fribourg’s vision, his strongbelief in trusted partnerships and hisconcern for people continue to be part of thelegacy of Continental Grain.

waiver in his adherence to high ethicalstandards.

“The key to our success, he would say, is ourpeople. And so, our mother’s and father’slives were entwined with the lives of thepeople of the company,” says Paul Fribourg.

“They understood the word partnership inall its ramifications — that we were all inthis adventure together and would share inits successes and failures. To our father,business and family were interchangeable— almost a single entity.”

For 53 years… he transformed his familybusiness from being a European-basedtrading company into a U.S.-basedmultinational corporation involved in abroad range of agribusiness enterprises.He pioneered the opening of trade withmany new markets around the world,including the Former Soviet Union andthe People’s Republic of China. He wasa respected and admired leader of thisglobe-circling industry. He was knownaround the world in ways thatredounded to the great credit of thecompany and his family.” From the Board of Directors tribute toMichel Fribourg

Business Week cover — March 11, 1972.

Mary Ann and Michel Fribourg in their Manhattan townhouse.

an overvIew of the GraIn InDuStrY 19an overvIew of the GraIn InDuStrY

The grain trade is nearly as old as graingrowing, dating back to around 9,000 BC.While subsistence-level production wascommon throughout history, the graintrade only became possible whenproduction was geared towards creating asurplus for commercial agriculture.

Early trade was most likely by barter,because hauling large amounts of grainfrom one location to another was sodifficult until theadvent of the wheeland more effectivemeans oftransportation.

As they became moreindustrialized andurban, England andother Europeancountries increasinglyimported grain from

the various breadbaskets of the world. Atthe same time, in the Soviet Union andsoon after in China, disastrouscollectivization programs effectively turnedthe world's largest farming nations into netimporters of grain.

By the second half of the 20th century, thegrain trade was divided between a few state-owned and privately owned giants. Thelargest private companies, known as the"big five” at the time, were Cargill,Continental Grain, Louis Dreyfus, Bungeand Andre.

Major grain companies invest in shipping,grain elevators, communications andprocessing plants — mills that make wheat

an overvIew of the GraIn InDuStrY 2120

into flour and corn into animal feed, andcrushing plants that convert soybeans intocooking oil or meal. They also operate thegrain pipeline — from farmer to consumer.

While grain was once sold by the sack, it isnow moved in bulk by railcar or barge,loaded onto huge ships to overseas

destinations and then transported by truckor railcar. Railways have switched from coalto diesel fuel, and introduced hopper cars tocarry more grain faster and with less effort.Old wooden grain elevators have beenreplaced by massive concrete inlandterminals, and rail transportation facescompetition by ever-larger trucks.

Modern issues affecting the grain tradeinclude food security and food safetyconcerns, the increasing use of biofuels, thecontroversy over how to properly store andseparate genetically modified and organiccrops, the local food movement, the desireof developing countries to achieve market

access in industrialized economies, climatechange and drought-shifting agriculturalpatterns, and the development of newcrops.

But in this changing marketplace, one thingis certain: The demand for grain and otherkey agricultural commodities will be greaterthan ever to feed a growing globalpopulation.

It's dramatic to compare the company from 1954 to 1970. We were doingbusiness in places that no one would have dreamed of. It was a wonderfultime for me, the company and the world.

MF was a very special person. He had a mystique and peoplewanted to meet him.

Integrity is at the foundation of this company. It always impressed me how everyone is always talking about doing the right thing in the right way.The family, the close-knit group of people here, really help to maximize thevalue of the company.‘‘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, andhe always put importance on the people of the company.

You have to evolve with the world, participate. That’s what Micheldid, and he created an empire.

‘‘ ‘‘‘‘ ‘‘

FRANK BAIERExecutive Vice President and

Chief Financial Officer, Continental Grain

VART ADJEMIANFormer Executive Vice President and

Chief Operating Officer, Continental Grain

PIERRE HAASFormer European Senior Executiver,Continental Grain and Family Friend

MIKE LASERSONFormer Senior Managing Director,

International Finance, Continental Grain

BEN NORDEMANNFormer Board Member and

Senior Vice President, Continental Grain

It’s common for private equity firms to operate as if relationships are a zero-sum game. Continental Grain comes from a very different orientation towardpartnership. So at Arlon Group, we have the benefit of the cultural dedicationto partnership that Continental Grain has built over the course of history.‘‘ MICHELLE BROOKS

Managing Principal, Arlon Group

the Paintings and tapestries of Michel fribourgMost 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 ownright, creating paintings and tapestries throughout his life. Several of his works are presentedthroughout this book.

the foundation Years

the earlY YearS ofcontInental GraIn Set the StaGe for exPanSIon In euroPeanD aMerIca, followeDIn the MID-20th centurYbY war, ProSPerItY anD the coMPanY’SevolvInG Global Influence. thIS Influence woulD notonlY Generate unPreceDenteD Growth, but alSo SPur InternatIonaltraDe anD PolItIcal cooPeratIon forDecaDeS.

1813-1914

1813A grain trading business is founded bySimon Fribourg in Arlon, France (which

is now in Belgium).

1842Simon’s son Michel joins the

family business at the age of 18. 1890sThe company enters the flourmilling business, building itsfirst mill in Arlon (which is

now in Belgium).

Early 1900sArthur Fribourg turns over

business to sons, Jules andRené, who begin expansion of

international business.

1848Business grows substantially

during Belgian famine.

1890Arthur Fribourg establishes a

firm under his name inAntwerp.

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),France, Simon Fribourg left Sierck-les-Bainsin 1813 and settled 60 kilometers north inArlon, France (which is now in Belgium).There he founded a small grain-tradingfirm.

In 1842, Michel Fribourg, the son of SimonFribourg, joined his father in business andexpanded it to all of the large Belgianmarkets. In 1848, during the Belgian

famine, Michel Fribourg undertook adangerous and difficult trip to Bessarabia(now Romania) with bags of gold topurchase grain and bring it back toBelgium by boat up the Danube and theRhine.

From the beginning, the commoditiestrader thrived on the vicissitudes of natureand the ever-present need for food. Inaddition to natural disasters, wars played a

Arlon, circa 1890

the founDatIon YearS 33

major role in the company’s history.Because Belgium was not involved in theFranco-Prussian war, in the 1870s, itbecame an important business center.Michel Fribourg and his two sons, Arthurand Paul, were able to expand the business.In 1890, Arthur Fribourg established a firmunder his own name in Antwerp, and aboutthe same time, in partnership with hisfather and his brother Paul, went into theflour milling business and constructedmills in Arlon and Luxembourg.

Arthur then retired and turned the businessover to his two sons, Jules and René. Juleswas only 27 years old. He had been in thefamily business since the age of fifteen, andhad studied the grain business in Germanyand England. Through the enterprise ofJules Fribourg, known in Antwerp as one ofthe ablest and most aggressivebusinessmen, the firm made its firstventures into international trade in thedecade before the Great War.

In October 1914, Arthur Fribourg and histwo sons took the last ship to leave Antwerpbefore the city fell to the Germans. InLondon, Jules and René then began theexpansion of their international business.

After 77 years in Arlon and 24 years inAntwerp, the Fribourgs were now at thecenter of the international grain trade.They took advantage of the manyopportunities that wartime businessoffered. In 1916, Jules and René movedfrom London to Paris where they wouldremain until 1940. It was also during thewar that the first business contacts with theUnited States were established. RenéFribourg spent two years in the U.S. fromNovember 1916 until the Armistice. Thiswas to become the start of the company’sglobal expansion.

Arthur Fribourg, circa 1905

Jules Fribourg René Fribourg

32

We've had some great successes and we've made some big mistakes, but Ithink we've learned from the mistakes so the business today is stronger andis thriving and I think really has a great future.

The company is willing to work at a problem, decide what's best and make a decision. Their knowledge, reputation, and experience allow them to makedecisions quickly and rationally.

When I think about Continental Grain, I think about a fantasticgroup of entrepreneurs and a great family at the helm.

People are the cornerstone of this company. This company was able togrow, evolve and increase its global reach because of the ideas of its people, not just because of senior management or outside forces.

‘‘ ‘‘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

years will be exposed to all kinds of things. I'm glad I had the opportunity.Even though I haven't worked for the company for over 20 years,

I still feel very much a part of it and devoted to the the family.

‘‘ ‘‘‘‘ ‘‘

MICHAEL ZIMMERMANVice Chairman, Continental Grain

NICK ROSASenior Vice President and General Manager,

ContiAsia Division, Continental Grain

F. CARL BRAUNChairman and Chief Executive Officer,

Unibank S.A.

POUL SCHROEDERFormer President and General Manager,

Finagrain, Continental Grain

MARV BERENBLUMFormer Senior Vice President,

Human Resources, Continental Grain

TERI MCCASLINExecutive Vice President, Chief of Human

Resources & Administrative Officer, Continental Grain

the Paintings of Michel fribourg

Global expansion in the 20th century

1915-1998

1919Compagnie Continentale

d’Importation France (CCI)is founded; the company

begins its global expansion.

1944René Fribourg becomes acting

president of the company;New York becomes the defacto headquarters.

1964Continental Grain

sells one million tonsof wheat to the Soviet

grain-purchasingagency Exportkhleb,the first major U.S.grain sale to the

Soviet Union.

1965Continental Grain acquires 51

percent of Allied Mills, a major feedproducer as well as a producer of

fresh poultry. The acquisition bringsthe company into livestock

production and processing and provides the foundation for the

subsequent development of WayneFarms LLC, the company's current

poultry business.

1975Allied Mills acquires Coronado

Feeders, the first facility in whatwould become Continental

Grain's Cattle Feeding Division(now part of JBS Five

Rivers Cattle Feeding LLC). Thecattle feeding business expands

with the acquisition of XIT Feeders in 1978, Colorado Beef

in 1979 and Grant County Feeders in 1981.

1981Allied Mills, Inc. is

merged into ContinentalGrain.

1997Paul J. Fribourg is named

Chairman and Chief Executive Officer of Continental Grain.

Mid-1980sThe company forms a formal

Board of Directors.

1998Continental Grain

Company purchases a51percent interest in

Premium Standard Farms,one of the largest fully

integrated pork producers inthe United States.

1921The company establishes a

U.S.-based business in Chicago,Illinois, under the name

Continental Grain Company. 1945Michel Fribourg becomespresident at the age of 31

following his discharge from theU.S. Army.

1940In the wake of the

German invasion ofFrance, the Fribourg

family leaves Europe forthe United States aboard

one of the company’sfreighters.

1972The company makes a major,

multi-million-ton sale ofgrain to the Soviet Union.

1981Continental Grain opens the firstforeign-owned feed mill in Chinain a joint venture with CharoenPokphand. The new business,Conti Chia Tai International,transforms the Chinese feed

and animal husbandry industry and paves the way for

the company's further expansioninto China.

1921-1939Jules Fribourg expands CCIinto a worldwide company

and opens offices throughoutEurope, Asia, Africa and South

America.

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 acold war, continental Grain company found a way to overcome formidable obstacles and become a major international business.

To become an international grain trader inthe 1800s, one did not need large amountsof capital or massive grain depots, ships,and other infrastructure. What were neededwere credit, a telephone, personalconnections and a sound knowledge of thetechnical details of trading. Charm, goodinstincts, luck and guts didn’t hurt either.

Six important transformational eventsoccurred, which changed Continental Graininto a major international company in the20th century.

Opening International Offices

The first significant event occurred in June1919 when Jules and René Fribourg,together with other partners, founded theCompagnie Continentale d’Importation inAntwerp. In December 1919, the Fribourgbrothers, with their partners, foundedCompagnie Continentale d’ImportationFrance (CCI), which became theheadquarters of the firm. Jules Fribourg’sdynamic force and daring ventures led him

to transform CCI into a worldwide tradingcompany, with offices in the Netherlands,Italy, Spain, England, Germany, Romania,Bulgaria, Yugoslavia, Argentina, FrenchIndochina (now Vietnam, Cambodia, and


Laos), Morocco, Siam (nowThailand), and Malaya (nowmodern Malaysia).

Establishing a U.S.-BasedBusiness

Jules Fribourg was aremarkable visionary whounderstood that the

Midwest region of the United States wasemerging as a major source of grain; hence,the need to establish a U.S.-based business.

This being 1921, Jules would have beenconsidered nothing short of a pioneer inthis undertaking.

Capitalized with $50,000, the companyestablished a U.S.-based business, whichwas then named Continental GrainCompany. At that time, the Fribourgbrothers also purchased a seat on theChicago Board of Trade for $6,000.

To further strengthen its presence in theUnited States, the company established a

New York office located at 2 Broadway,which was later to become ContinentalGrain’s world headquarters. Shortlythereafter, the company purchased its firstU.S. grain elevator in St. Louis, Missouri, inorder to procure commodities for export.Jules Fribourg, himself, made two trips tothe U.S. in 1930 and 1931.

To also capitalize on this limitless newmarket, in 1930, the company leased aGalveston, Texas, terminal from SouthernPacific Railroad. This led to the secondsignificant event – the evolution ofContinental Grain in the United States intoa grain originator from the interior toexport ports. This was accomplishedthrough the leasing and eventual purchaseof grain elevators.

As it turned out, the Great Depression (theperiod 1929-1939) served ContinentalGrain well, because the company waswilling to take the risk and purchaseexisting U.S. grain facilities at bargainprices. During this decade-long financialcollapse, the company purchased grainelevators across the country in such keylocations as Kansas City, Kansas; Nashville,Tennessee; and Toledo, Ohio.

By the end of the decade, and after less than20 years in the United States, the companyhad established both a sophisticated grainnetwork and a stable and growing businessin North America, including offices in NewYork, the Midwest and a West Coastoutpost.

In the wake of the German invasion ofBelgium and France in May and June 1940,Jules Fribourg and his family gathered inBordeaux and, in fear of what mighthappen in France, decided to leave for theU.S. As it was impossible to travel directlyto the U.S., Jules, thirteen relatives, andJules’ personal physician, having been ableto obtain visas for Portugal, left Bordeauxfor Lisbon on June 18, 1940. Meanwhile,Jules’ son, Michel, working for the French‘Ministère de la Marine Marchande’ inLondon, diverted one of Continental Grain’sfreighters to Lisbon to pick up the group inLisbon. As the family had been unable tosecure U.S. visas in Lisbon, the freighter setsail for Santo Domingo where the groupremained until they obtained their U.S.visas. They arrived in New York in August1940.

Jules Fribourg began to run the business

44

Chicago Board of Trade.

Jules Fribourg


company’s European operations had beendecimated by the war, which left theAmerican business by far the strongestoperation. And then, in the third significantevent for the company, he made thedecision that the United States wouldbecome the company’s officialheadquarters.

With European and Asian agricultural areasdevastated by war, and the populations ofthese continents near starvation, Americanoutput of foodstuffs increased sharply in

the late 1940s. To take advantage of thisopportunity, Continental Grain continued tomake substantial investments in a broadnetwork of grain elevators and othercomponents of commodity trading. Thecompany’s operations grew dramatically.Joseph Feuer and Willelm C. Schilthuiswere two senior executives who played a keyrole in Continental Grain in the 1940s.

The strides that Continental Grain achievedduring the postwar period were significant..

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

treaty.

MORTON SOSLANDContinental Grain Board Member

from New York, which then became thedefacto company headquarters. He thenbecame gravely ill and died in 1944. At thattime his son, Michel, was in the U.S. ArmyIntelligence Corps. Stewardship of thecompany passed to Michel’s uncle, René,who took over as chairman of the board andagreed to serve as acting president untilMichel returned from active duty.

Company Headquarters Moves to theUnited States

Assuming the presidency of what was a vastfamily enterprise after he was dischargedfrom the U.S. Army, Michel, at the age of 31,had to face the reality that many of the

Michel Fribourg, U.S. Army

New York City

Board Member Henry Kissinger’sPerspective

”People don’t remember that U.S. trade with

China in the 1970s was less than with

Honduras – about $300 million a year. In

opening relations with China, there was no

baseline because there had been no

communication on any substantial level for

20+ years and next to nothing on the business

side because China was sanctioned. We started

from zero into projects of some size. That was

a formidable task. Now with a number of

partners in China, Continental Grain is able

to help the Chinese feed a billion people.”

“Total reliability and trust were paramount for

the Chinese at that time, since they were

inexperienced and had no knowledge of how to

work with the West. Their sole frame of

reference was being disadvantaged as a result of

19th century colonialism. Continental Grain

was prepared to, and acted on, the basis of

“mutuality of interests” and understood that its

business interests could be preserved only if it

could be perceived by the Chinese as

contributing to their well-being and

development.”

Mr. Kissinger continued, “The business deals

Continental Grain made in Russia and China,

of course, had a significant business aspect, but

they also had impact psychologically and

diplomatically in the sense they were symbols of

how America could contribute to countries that

were in a great deal of difficulty. This happened

at a time when, for foreign policy reasons, an

improvement in relations in the case of Russia,

and an opening of

relations in the case

of China, were

considered very

important by the

leaders of the

country.”


Emphasis on Talent

As the company expanded, Michel Fribourgrecognized that people were thecornerstone of Continental Grain’scontinued success. The company set aboutrecruiting graduates from top universitiesand business schools to create its futureleaders and managers. Great emphasis wasplaced on the training and development ofpeople from entry level to management.Significant opportunities were providedearly in careers to provide employees withexposure to different parts of the businessin various parts of the world and equipthem with the skills to become trueentrepreneurs and international businessprofessionals. This focus on people becamea hallmark of Continental Grain still ineffect today and was to become the fourthsignificant event.

The Great Soviet Grain Deals and theOpening of the China Market

The fifth significant event involved theinitiation of trade with the Soviet Union andChina.

Soviet UnionAfter weeks of intensive and secret

negotiations, Continental Grain finalized ahistoric grain trade agreement with theSoviet Union, becoming the first companyto export American grain to the U.S.’s coldwar adversary. Shipments began in the earlyweeks of 1964 – one million metric tons ofwheat at world market prices. These wouldbe the first shipments – under anauthorization granted by President John F.Kennedy just before his death in November1963 – to meet the needs of the Sovietpeople whose wheat harvest had failed.

At the time, Michel Fribourg said that thedeal was the largest single grain and freighttransaction in Continental Grain’s historyand would “ make a significant contributiontoward solving the country’s balance ofpayments problem.”

48


two historic Grain Deals with russia

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

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

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, LeonidMatveev, President Exportkhelb - Moscow, Roy Folck, VP Continental Grain - New York.


Meanwhile, in November 1971, in a dealpersonally arranged by Michel Fribourg,Continental Grain continued its developingrelationship with the Soviets by sellingthem 900,000 tons of U.S. governmentsurplus barley and two million tons of corn.

In early 1972, moreover, Continental Grainscored another achievement with theSoviets, selling them nearly six million tonsof American grain and soybeans, plus anundisclosed amount of foreign foodstuffsafter Soviet crops failed because of badweather..

China

This lucrative trade agreement with theSoviet Union was followed more than adecade later by a similar agreement with

The story of Continental Grain

is a story of a great family

that has kept traditions and

particular efforts through whole

succession of generations,

which is very difficult to do.

They have been an effective

commercial enterprise, but one

never questioned their sense of

public service. They are a

private company that’s been

run as if it’s a public company,

which they did not need to do.

They’ve been meticulous in

their ethics, commercial

orientation and patriotic sense

of country.

HENRY KISSINGERContinental Grain Board Member

The grain deal also helped to smooth thepolitical path to what was then calleddétente. The desire to sell grain to theSoviets converged with the desire to engagethe Soviets on as many fronts as possible,creating linkages between economics andpolitics, and giving the Soviet leadership along-term vested interest in developing aworking relationship with the United States.

“At the time, many people thought that itwas morally wrong to ‘deal with theenemy,’” notes Charles Fribourg, DirecteurGeneral, Arlon Group (Europe) S.A., and amember of the company’s board ofdirectors. “It was the Cold War and the dealwas very controversial,” he adds. “MF sawthe opposite; he saw it as a political openingthat would reduce tensions, and that’s whathappened.” And, of course, it helped to feeda starving population.


Grain Trading Expansion

By this time, Continental Grain washandling approximately a quarter of theworld’s international grain shipments and afifth of the grain exports of the UnitedStates. The company held three milliontons of domestic storage capacity and half a

million tons abroad. To move the productsit sold, the company operated numerouscountry grain elevators, 13 river stations, 65barges, and eight North American portelevators. The company also leasedhundreds of railroad cars and as many as 25cargo ships.

the People’s Republic of China, whenContinental Grain became the firstcompany to export American grain to thatcountry. This occurred just prior to theNixon administration’s efforts to restorediplomatic relations, which included thethen-president’s historic trip to Beijing.

To foster these key relationships, MichelFribourg became the founding director ofthe US-USSR Trade and Economic Counciland the US-China Business Council, as wellas a member of the prestigious Council onForeign Relations..

54

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


On December 22, 1977, Continental Grainsuffered a major setback when a massiveseries of explosions destroyed its grainelevator in Westwego, Louisiana, part of thecompany’s New Orleans operations and thecompany’s largest grain export facility.Static electricity set fire to grain dustdestroying 45 of the facility’s 72 silos; 36workers lost their lives. A year later,Continental Grain announced that it wouldinvest $200 million to rebuild its NewOrleans site, constructing a new fire-safeelevator.

Since intelligence gathering was anotherkey to successful grain trading, ContinentalGrain maintained by the early 1970s, an

integrated worldwide communicationssystem that fed 5,000 messages a day inand out of the New York headquarters.Messages would come from posts inEurope, Asia, Latin America and the MiddleEast, reporting on bids and offers for grain,crop and weather conditions, as well aspolitical and economic trends, etc.

At the time, Michel Fribourg attributed thecompany’s success to its inherent flexibility,due to its privately held status and theentrepreneurial spirit of its people. “Ourmanagement, indeed our entire business, isbased on what human beings canaccomplish,” he said.

In a book about multinational corporations,“Global Reach”, the authors described thecorporate leaders who emerged after thewar as “world managers,” because theywere the first in history “to make a credibletry at managing the world as an integratedunit.” Continental Grain during thisperiod, led by Michel Fribourg, was aperfect example of this trend.

Diversifying from Grain Trading to Agri-Industries and Financial Services

Against the backdrop of thesegroundbreaking trade agreements,Continental Grain embarked on an

56


network of offices. Its original purpose wasto provide hedging services to ContinentalGrain’s customers to help them managetheir risks.

The company also set up ContinentalMilling Corporation, which owned and

operated feed and flour mills in Central andSouth America, the Caribbean, and Zaire.Then, in late 1971, the company verticallyexpanded from the flour to the breadbusiness with the acquisition of OroweatBaking Company on the west coast, andArnold Bakery on the east coast, to create aleading nationwide bread business.

During this period, Continental Grain alsoentered the oilseeds crushing business. Thecompany built and acquired facilities in theUnited States, Argentina, Brazil, Paraguayand England.

In its trading area, Continental Graindiversified into ownership of transportationassets and became a leading player in theinland barge business (ContiCarriers andTerminals), and the shipping business withthe creation of the Overseas ShipholdingGroup in partnership with the Recanatifamily. The company also diversified intotrading of other commodities such as rice,where it became the world’s leading ricemerchant under Raphael Totah. In addition,ContiChem-LPG and ContiMetals wereestablished as well as ContiCotton, whichengaged in cotton merchandising globally.

By the early 1970s, more than 100companies had been added to ContinentalGrain, which had expanded its operationsglobally in more than 50 countries.

In the 1980s, Continental Grain alsoexpanded into financial services sector byacquiring a small specialty finance andbarter trading business. This businesseventually transformed into ContiFinancialCorporation, a mortgage origination andasset securitization business, which laterbecame one of the leading sub-primemortgage companies in the United States.ContiFinancial was then taken public in1996 on the New York Stock Exchange.

This successful enterprise is

rooted in the ethics and value

system that animated the

company over the decades and

generations. I think Michel

inherited these values of

integrity, steadfastness and a

long-term view of protecting

the family interest, and those

values are still in place even

though the nature of the

business has changed…

The ideas of trust and integrity

– and I keep stressing for

the long term – are still the

hallmark of Continental Grain

today.

RON DANIELFormer Continental Grain

Board Member

aggressive acquisition strategy during the1960s and 1970s, to broaden the company’sspheres of operation in different but relatedagribusiness sectors. This became the sixthsignificant event to transform the company.

In 1965, the company acquired a 51 percentinterest in Allied Mills, Inc., of Chicago,Illinois, an animal feed producer, lateracquiring the other 49 percent interest.Allied Mills became the industrial arm ofContinental Grain. Beginning under theleadership of Roy Folck, first CEO of AlliedMills, and then by Donald Staheli whosucceeded him, Allied Mills expanded overthe years to include poultry, beef, pork andpet food businesses in the United States.

In 1970, Continental Grain also entered thecommodities futures brokerage businesswith the creation of ContiCommodities.Over time, it became a leading commoditiesfutures brokerage company with a global

Shortly thereafter, in the spring of 1990,Paul Fribourg assumed leadership of theconsolidated World Grain, Oilseeds andMerchandising, and General Commoditiesgroup and was elected a director of thecompany.

Paul Fribourg’s career at Continental Grainbegan following his graduation fromAmherst College in 1976, when he joinedthe company's Memphis, Tennessee officeas a grain merchandiser. Rising in thecompany, Paul Fribourg had exerted hisown influence by realigning itsinternational grain and oilseeds operationsto create Continental Grain's World Grainand Oilseeds Processing Group.

In 1997, the senior management ofContinental Grain further evolved, asMichel Fribourg became chairmanemeritus, Donald Staheli became chairmanof the company and Paul Fribourg wasnamed president and chief executive officer.


Transforming Organizational Structureand Governance

As Michel Fribourg turned 65, and toaddress the growing complexities ofrunning a worldwide business, he took twoimportant steps.

The first was the creation of an Office of theChief Executive, comprised of himself,Donald Staheli, and Walter Goldschmidt,dividing the company’s operations into fivebusiness groups – financial services,world meat, world milling,transportation and natural resources,and world grain and oilseeds processing– and appointing an operating head toeach.

The second step, following a keystrategic study conducted by Ron Daniel,

McKinsey & Company Director and formerManaging Partner, was the adoption byMichel Fribourg of one of McKinsey’s keyrecommendations to establish a formalBoard of Directors for the company, on thecondition that Ron Daniel would become itsfirst member. Other founding boardmembers included Morton Sosland, ArthurLiman, Henry Kissinger, JamesWolfensohn, and Olivier Wormser.

Donald Staheli, who had joined Allied Millsin 1969, became president and chiefoperating officer of Continental Grain in1984. Four years later, Michel Fribourgretired as chief executive, and DonaldStaheli became the first non-Fribourg tohold that position in the company's then175-year history.

60

The Board of Directors is formed (left to right): Don Staheli, Henry Kissinger, Arthur Liman, Michel Fribourg, Morton Sosland, Walter Goldschmidt, Olivier Wormser

Ron Daniel

Left to Right: Don Staheli, Michel and Paul Fribourg

Paul Fribourg and Don Staheli

The company was known for its high reputation, for people who could bedepended on and for a willingness to explore new areas with a great deal ofingenuity. It's a reputation that developed from generation to generation, andI'm sure it's still being carried out.

What makes Continental Grain different is a real focus on the whole individual. Notjust what you can produce, but also how happy you and your family are and a lot ofthat comes from Paul.

I’m very proud of having worked in the company — I think these 25 yearswere the best years of my life. Everything that I learned from a professionalpoint of view — even a human point of view-it was a wonderful experience. I was exposed early on to big responsibilities, which was rather unusual atthe time. A lot of my peers were people double my age. It was a very goodopportunity to learn about all the phases of management.

Relationships with partners are key. They're looking for a good reputationand clear ethics. Just as important for the Fribourg family and the company is our reputation for ethics, performance and having the bestpeople in the industry.‘‘ ‘‘MF was a man who inspired people around him. He approached

me like a friend, not a subordinate.

‘‘‘‘ ‘‘

BERNIE STEINWEG Former Senior Vice President, Government and

Trade Policy, Continental Grain

BRIAN ANDERSONSenior Vice President & General Manager, ContiLatin Division, Continental Grain

SAL AMRAMFormer Senior Vice President and

General Manager, Rice Division, Continental Grain

BEN FISHMANManaging Principal, Arlon Group

PABLO PASTEGAFormer President (CEO), Finagrain, Continental Grain

Continental Grain has always been about people – from feedingthe world to treating employees, customers and partners with

integrity and respect.

‘‘ELTON MADDOX

President and Chief Executive Officer, Wayne Farms LLC

the tapestries of Michel fribourg

recalibrating for the 21st century

1999-2009

1999Continental Grain completes the sale of its

commodity grain trading business toCargill, Inc. and begins operating under thename ContiGroup Companies, Inc. With thesale of this business, the company turns its

principal focus to meat proteins.

2005ContiGroup and Smithfield

Foods combine their cattle feedbusinesses in a 50/50 joint

venture to create Five RiversRanch Cattle Feeding LLC.

2000ContiGroup sells its AnimalNutrition Division (formerly the Wayne Feeds Division)

business to Hubbard Feeds,Inc. of Mankato, Minnesota. 2008

ContiGroup reassumes the nameContinental Grain Company and

announces the formation of ArlonGroup, a private investment

group that invests the company’spermanent capital, as well

as third-party capital, acrossmultiple strategies to create

long-term value.

2009Arlon creates Arlon Food and Agriculture

Partners, jointly sponsored by Continental Grainand Rabobank, the leading food and agriculture

commercial bank in the world, to invest in private equity food and agricultural opportunitiesin North America. Arlon’s public equities strategy

invests in global public equities and select commodities, deploying both Continental Grain's

as well as third party capital.

2008Arlon invests with MonarchAlternative Capital to assistthem in the repurchase of

their management company.

2007ContiGroup completes the

merger of Premium StandardFarms into Smithfield Foods.

2006Wayne Farms opens its

newest further processing facility in Decatur, Alabama

(now known as Decatur West).

recalIbratInG for the 21St centurY 71

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

As the company approached the year 2000,the challenges of the commodities tradingbusiness increased. Continental Grain wasfinding it more difficult to compete with theother major grain trading companies thathad expanded much more aggressively intograin processing (soybean crushing, cornwet milling, flour milling and ethanol).Also, U.S. grain exports began to decline.The changes that had been sweeping thebusiness were profound and permanent,especially the integration of grain tradingand grain processing. Further, the rapidemergence of biotech firms and geneticengineering strengthened the link betweenthe seed, the farmer, the merchant and theprocessor. This put Continental Grain,primarily a grain handler, at a significantdisadvantage.

“We also found ourselves in a difficultfinancial position when ContiFinancial, thecompany's asset securitization business,imploded in 1998,” Paul Fribourg recalls,“which threatened the health of the parent

company and put us temporarily in defaulton our bank agreements. The grainbusiness required enormous lines of creditto finance inventories around the world,and we were constantly at the mercy of ourbanks. The whole company was at risk.”

Continental Grain made the extraordinarilydifficult decision to sell its traditional graintrading business. Everyone, including theboard of directors, the managementcommittee and Michel Fribourg, believed itwas necessary for the long-term survival ofthe company.

In 1999, Continental Grain completed thesale of its worldwide commodity marketinggroup (including its grain business) toCargill, Inc., opening a new era in thecompany’s nearly 200-year history.

”The sale of the grain business was asignificant event in the history ofContinental Grain Company,” PaulFribourg explains. Until that time, everybusiness was owned, financed and

Top: Breaking ground on new hogoperations following PSF acquisition of Lundy’s.

Right: Closing bell ceremony forContiFinancial Corporation IPO.


guaranteed by the parent company. Acatastrophic event in any single businesscould have brought down the entire firm.The decision was made to spin off everybusiness as an independent entity with itsown balance sheet, board of directors, andmanagement team, thus creating a holdingcompany at the parent level. This was anidea first conceived 25 years earlier by thelate Roger Kline, a former member of thecompany’s board, when he referred toContinental Grain as an ‘agribusinessmerchant bank’.”

Paul Fribourg continued, “The sale of thegrain business was the first critical step indeleveraging and derisking ContinentalGrain. We could never again put the totalenterprise at risk. This began a 15-yearprocess of getting the parent company tozero net debt and having each businessstand on its own. It was also the beginningof a new strategic orientation for thecompany in which we became more of afood, agribusiness and commodityinvestment company.”

Years later, after the company fully achievedthese objectives, Roger Kline described thecompany as being “recklessly conservative.”

This transformation unlocked ContinentalGrain’s ability to invest in a wide array offood and agricultural companies in a moreflexible ownership structure. The companywas able to create a significant number ofjoint ventures, partnerships, public entitiesand private equity holdings as a result.

The New Millennium Brings SweepingChanges and New Opportunities

Prior to the sale of the grain business,Continental Grain’s industrial operatingbusinesses already represented a significantpart of the company. The challenge thecompany now faced in having everybusiness stand on its own was to createviable business entities that were leading

competitors in their respective industries.In certain instances, the company exitedbusinesses such as U.S. animal feed, breadand the oilseeds crushing operations. Inother cases, the company merged itsbusinesses into larger entities to createscale (for example, Continental Grain’s porkbusiness). In yet other situations,Continental Grain maintained 100 percentownership, but the business became both

financially and legally independent, such asWayne Farms.

An example of this evolution is what thecompany did with its pork business.Continental Grain had a modest hogfarming business. In 1998, the companymerged this business into PremiumStandard Farms (PSF), the largest fullyintegrated pork producer in the industry,thereby acquiring a 51 percent stake. PSF

72

Roger Kline


It’s a natural move to gradually

transition from being a trading

company to an investment

company that can build on

its past and its knowledge,

to continue to operate

internationally, and take

advantage of the future.

JAMES WOLFENSOHNContinental Grain Board Member

expanded by purchasing smaller porkcompanies like The Lundy PackingCompany in 2000. In 2006, PSF wentpublic and then, in 2007, merged intoSmithfield Foods, Inc., making ContinentalGrain the largest shareholder of SmithfieldFoods with two seats on its board. Overseven years, Continental Grain’s porkbusiness had gone from 100 percentownership of a modest-sized hog farming

operation to having a significant stake in theleading integrated pork company in the U.S.Pending regulatory approval, SmithfieldFoods will be acquired by ShuanghuiInternational Holdings, Ltd., a Hong Kong-based privately held company with majorityownership of China’s largest meatprocessing company.


In aquaculture, the company teamed up in1990 with its long-term partner, SeaboardCorporation, and built from the ground up

the leading salmon and trout farmingoperation in Maine. In 1998, a processingplant was added and a leading retailbranded salmon company, Ducktrap RiverFarms, was acquired. In 2001, thisbusiness was merged into a publicNorwegian salmon company, Fjord S.A.,creating one of the leading, globalaquaculture companies. Continental Grain eventually sold its position as thisbusiness matured.

In 2000, Continental Grain's formerpoultry division became Wayne Farms LLC,a standalone business. During this decade,Wayne Farms expanded its fresh chickenbusiness and entered the processed(cooked) chicken business by building itssecond state-of-the-art further processingplant in Decatur, Alabama.

In 2000, Continental Grain’s former cattledivision became ContiBeef LLC, also a

standalone business. In 2005, ContinentalGrain and Smithfield Foods combined theircattle feeding businesses in a 50/50 jointventure to create Five Rivers Ranch CattleFeeding LLC, the largest and lowest-costcattle feeding company in the UnitedStates. Continental Grain and SmithfieldFoods had tried to identify and purchase aleading beef packing company to create avertically-integrated business, but wereunable to find the right opportunity. In2008, JBS S.A. signed a definitiveagreement to purchase both Five Rivers andSmithfield Beef Group, signifyingContinental Grain’s exit from the cattleindustry.

76

It’s extraordinary to think about an organization that has weatheredso many storms, come through so well, prospered, regrouped andprospered again.

Continental Grain is a perfect example of a success story for a family business.Whatever they do, they always do with a vision of the business that must grow, with ethics. They see long-term investments instead of short-term financial bets.

When I wake up in the morning, what I’m most excited about iscoming to work with the people we have here. We’ve created ateam that not only works well together, but really enjoys beingtogether. They’re all exceptionally smart, diligent people, with ahigh degree of integrity.

‘‘‘‘ ‘‘

JIM MANZIContinental Grain Board Member

CHRISTIAN FUCINAFormer Managing Director, Les Moulins d'Haiti (LMH)

The Company has created a global investment platform focusing on agriculture and food. We also have a unique hybrid philosophy, which

combines operation and investment. Our operation team and investment teamwork together to enhance Conti's presence on both sides. The company values

my long-term development. The trust and long term local view set Conti apartfrom other similar foreign companies in China.

‘‘HANK XU

Managing Director, Continental Capital Ltd. (hired in 2011)

We’re able to run the business with a good amount of freedom. Butat the same time, there’s a high degree of accountability. It’s a verystrong organization where I can use my experience to move thingsforward. I think I have a great future here.‘‘ CLINT RIVERS

Vice President and General Manager, Fresh Business Unit, Wayne Farms (hired in 2012)

I am particularly proud of the fact that after the earthquake in Haiti, in December 2010, which leveled our flour mill, we decided to rebuild. Our social responsibility played an important part in this decision. I think both

companies are proud of the fact that we have the newest, most modern flourmill in the Caribbean, and we continue to contribute to the Haitian economy.

‘‘STEVE BRESKY

President and Chief Executive Officer, Seaboard Corporation

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 haschanged, so too has its potential for growth as an owner,operator and investor in the vast, multifaceted global foodand agriculture industry.

corporate Group Investments

wayne farms llc

contilatin Division

contiasia Division

asset Management Group

Partnership Investments

burger King

heinz

castleton commodities Int’l

overseas Shipholding Group

boa vista

arlon Group

Private equity Investment Group –arlon capital Partners

arlon food and agriculture Partners

Investor in middle market food

and agriculture companies in the U.S.

arlon latin america Partners

Investor in middle market food

and agriculture companies in Brazil

and select Andean countries

continental capital ltd.

Investor in food and agriculture businesses

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

Continental Grain and Arlon Today

Through decades of growth, changes andchallenges, Continental Grain has grown tobecome one of the largest privately heldcompanies in the world with diversifiedoperations and investment activities.Building on the entrepreneurial legacy ofthe original grain trading business andContinental Grain’s extensive knowledgeand networks in the world of food andagriculture, the company today is in theprocess of building one of the leadinginvestment companies in this field. Beingprivate and having long-term committedcapital and flexibility in the types ofownership structures and partnershipscreates a unique business model.

Continental Grain today is comprised oftwo core groups: Corporate GroupInvestments and the Arlon Group.

Corporate Group InvestmentsWayne Farms LLC

The largest wholly-owned subsidiary ofContinental Grain, Wayne Farms LLC, hasgrown over the past 40 years to become tothe fifth largest poultry producer in theUnited States. With a focus on quality everystep of the way, more than 2.5 billion

pounds of poultry are raised in over 1,000individual farms, and processed annually inWayne Farms’ eleven facilities. From itsfarms to its customers’ kitchens, WayneFarms’ chicken is sold under the banner ofthree brands, WAYNE FARMS®, DUTCHQUALITY HOUSE®, and PLATINUMHARVEST®. Wayne Farms is comprisedof two business units — fresh and furtherprocessing.

Wayne Farms’ Fresh Business Unit

Wayne Farms’ vertical integration allowscontrol of the complete poultry productprocess from feed to final (raw or cooked)


product, assuring, strict product quality andfood safety throughout the process. Thisincludes managing complexes of feed mills,hatcheries and processing plants to ensureproduction of the highest quality birds,optimum food usage, formulation andconversion. Also, complex managementallows for the safest and most efficientprocessing and packaging.

Wayne Farms offers a wide range of freshchicken cuts and packaging to meetcustomer’s needs. Whether packaged underthe WAYNE FARMS® fresh poultry brandor privately packaged for club stores,supermarkets and processors, quality, size,

volume and packaging are available to meetany specification.

Wayne Farms’ Further Processing Unit

During the past two decades, Wayne Farmsnot only expanded its fresh chickenbusiness, but also its processed (cooked)chicken business by building two state-of-the-art greenfield plants in Decatur,Alabama. Wayne Farms is a furtherprocessor of chicken meat, marketingready-to-cook, ready-to-eat and custom-designed convenience foods. As a pioneerin further processing, the DUTCHQUALITY HOUSE® poultry brandbecame known for innovation in a widerange of value-added products forfoodservice, food manufacturing,restaurants, club and grocery stores, privatelabel manufacturers and other preparedfood marketers.

In 2011, Wayne Farms established a formalboard of managers, which includes threeworld-class independent directors. Thecompany today is recognized as a leader inthe poultry industry and as an innovativefood manufacturing company with asolution-based approach to its business.

86

manage and run day-to-day operations.

The willingness to craft partnerships indifferent forms has opened many doorsover the years. This allows family-ownedbusinesses that want to sell only a portion

of their holdings to retain an importantstake. At the same time, thesearrangements enable ContiLatin to providecapital and technical support to spur growthand expansion. In addition to local partners,


Relationships, first developed by

Michel and continuing to this day,

have spanned generations and

have become the lifeblood of this

company. Relationships are what

this company was built on.

JERRY ROSENFELDContinental Grain Board Member

Wayne Farms’ customers seek its strategicbusiness point of view along with its foodexpertise — because its approach, and itssuccess, revolves around their success.

ContiLatin

ContiLatin is the successor organization toContiMilling and is comprised of LatinAmerican and Caribbean industrialagriculture businesses, one of whichContinental Grain has owned for almost 40years. These businesses — located inParaguay, Peru, Ecuador, Venezuela andHaiti — are focused on some form ofprocessing, including oilseed crushing, flourmilling, feed milling, poultry processing, aswell as baking, pasta, and commodityorigination and distribution.

With such a wide range of industrialoperations and investments in thisgeography, ContiLatin invested in smallercountries in the Southern Hemispherewhere the company can have a largerfootprint and, over time, develop closepartnerships with local food industryassociations and national clients.Continental Grain’s ownership ranges from100 percent to less than 25 percent. In somecases, it relies on its local partners to

Capiata plant outsideAsuncion, Paraguay

90

the company also has had a long-standingpartnership in Latin America with SeaboardCorporation, a global food, energy andtransportation company.

In a joint venture with local partners inVenezuela, for example, ContiLatin isinvested in one of the top integrated poultrycompanies in the Maracaibo region of thecountry. In Ecuador, ContiLatin is a partnerin the largest flour milling company (whichincludes consumer pasta production andcommercial bread baking) as well as apartner in one of the largest independentfeed manufacturers.

In Peru, ContiLatin is a co-owner of thelargest commodity marketing group, with adominant share of corn and soymeal salesto third parties. It is also principal ownerand operator of one of the leadingintegrated poultry operations. In Paraguay,ContiLatin owns and operates one of thelargest and oldest crushing operations, and

is a major producer of consumer productsin the Asunción area. ContiParaguay is thelongest held operation in ContiLatin andwas purchased by Continental Grain in1978.

Continental Grain in Haiti

For years, Haiti’s sole flour mill had beenowned by the government, was onlymarginally profitable and eventually failedand was closed down. While the asset satidle, Haiti had to import flour, losing theopportunity to produce its own flour andprovide jobs for its citizens. After beingabandoned for a decade, the mill needed asignificant infusion of capital andprofessional management to make itoperational and profitable, which requiredprivatization. In October 1997, at theconclusion of protracted negotiations, theHaitian government transferred majorityownership of the inactive mill to apartnership that included SeaboardCorporation, Continental Grain and a groupof local investors led by Unifinance, S.A.

Fast-forward 15 years and the flour mill, LesMoulins d'Haiti, was an unqualifiedsuccess, providing flour to the people ofHaiti and employing 170 of its citizens. But

Les Moulins d’Haiti flour mill, located in Port-Au-Prince, Haiti

ten minutes after Haiti's devastatingearthquake in January 2010, the flour mill,like the rest of Port-au-Prince, lay in ruins.Seaboard Corporation, Continental Grainand their local partners invested millions ofdollars into rebuilding and improving themill, which reopened in December 2011.“We wanted a flour milling business thatwould be staffed with local people to servethe community as well as internationalinvestors — a business that would last forgenerations,” explains Paul Fribourg. “Wecould have exited and invested theinsurance proceeds elsewhere. However, wewere committed to Haiti and today we havea state-of-the-art facility that is expandingbeyond flour milling into related areas,” headds.

ContiAsia

Continental Grain, through its ContiAsiadivision, has had an active presence in Asiafood and agriculture for more than threedecades. In 1981, Continental Grain, basedon its historic grain trading relationshipwith the Chinese, was granted businesslicense Number 0001 for overseasinvestment in the People’s Republic ofChina. The company established an animal

feeding and husbandry business in a jointventure with Charoen Pokphand (a largeThai-based multinational), and isrecognized as the leader in introducingmodern agricultural practices in China.

Today, through ContiAsia, ContinentalGrain is an operator and strategic investorin a wide range of businesses in Asia,primarily involving animal nutrition andhealth, genetics, meat production,processing and merchandising.

ContiAsia includes over 30 wholly-ownedand joint-venture companies managedthrough separate business units: ContiFeedGroup, Conti Chia Tai International, andHong Wai Foods, as well as DaChan Food(Asia) Limited.

0001

0001

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Business license Number 0001 for overseasinvestment in China, granted in 1981


In 2012, along with other partners,Continental Grain invested in CastletonCommodities International (CCI), formerlyknown as Louis Dreyfus HighbridgeEnergy, a leading merchant energycompany. Paul Fribourg has a seat on boththe CCI board and executive committee,and Michael Zimmerman, Vice Chairmanof Continental Grain, is also a boardmember. The investment marks the return,somewhat tangentially, of the company tophysical commodities trading.

Working with different people

and cultures from all over the

world is in our DNA. We’re

very comfortable with it. It’s

second nature to us. MF

would be thrilled to see how

the world has evolved and

how the company has

adapted to it.

CHARLES FRIBOURGContinental Grain Board Member

and Directeur General, Arlon Group(Europe) S.A.


Asset Management Group

The Asset Management group, meanwhile,is the equivalent of an endowment for thecompany and the family. It is a significantpool of liquid capital managed by leadingoutside professionals. Core investments arein U.S. and international equities, fixedincome, private equity and hedge funds.

Partnerships and Family Investments

Another vital partnership example isContinental Grain’s collaboration with 3GCapital (a leading Brazilian investmentgroup) in the acquisition of Burger King in2010 and Heinz in 2013. The relationshipwith the three principal owners of 3GCapital goes back over thirty years.Continental Grain is actively involved inthese ventures contributing its food industryexperience and participating as a boardmember (Burger King).

It’s not about the last 200 years; it’s about the next 200 years.

What interested me is the collegial culture with a focus on people and relationships.And it’s a company that engages in exciting transactions, continually exploring newinvestment opportunities in new businesses and new places around the world.

‘‘Every single person I have met at Conti is not only a good professional,but an outstanding person. Having outstanding people is what makes

Conti different from other companies I know.

‘‘‘‘

JONATHAN JACOBSVice President, Legal - Continental Grain (hired in 2011)

JUAN POMBOOperations Manager, ContiLatin del Perú (hired in 2011)

ALAN FISHMAN Continental Grain Board Member‘‘ STEPHEN VOLK

Continental Grain Board Member

(In talking about the Haitian earthquake) the flour mill that was destroyedwas 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 aquestion of how quickly we can go forward and rebuild the mill, and in themeantime, what could we do to help the families of our employees who diedor who were injured or dislocated.

Arlon is not like a typical private equity firm. I was impressed with their long-term aspirations and patience, and their pristine reputation. They invest in

high-quality management teams and take those investments to the next level.

‘‘JERRY SHAFIR

Founder, Kettle Cuisine

We are very pleased and privileged to have Continental Grain, with its unparalleledfood industry experience, as our investors and partners in our recent acquisitions in the global food industry, namely Burger King and Heinz. In particular, having Paul Fribourg on the Burger King Board has been instrumental to us, and to me personally, as we work hard in improving and growing our business in a very competitive industry. The strength of Paul's relationships and contacts at the highestlevels around the world do not cease to impress me and my partners at 3G. ‘‘ ALEX BEHRING

Co-founder, Managing Partner, and Board Member, 3G Capital

Arlon GroupArlon employs two alternative investmentstrategies to identify food and agricultureinvestment opportunities.

Arlon Capital Partners (ACP)

Arlon Capital Partners (ACP) is ContinentalGrain’s private equity arm focused today onthe food and agricultural sector. WithinACP, Arlon has created a number of sector-focused strategies that invest ContinentalGrain’s as well as third-party capital.

Arlon Food and Agriculture Partners(AFAP)

Arlon Food and Agriculture Partners(AFAP), was started in 2009 and issponsored by Continental Grain andRabobank, the leading commercial bank infood and agriculture, and one of thecompany’s oldest and most importantbanking relationships. Today, AFAP hasinvested half of its $335 million ofcommitted capital into six portfoliocompanies. They include the largest organicbranded sugar and sweetener company inthe U.S. (Wholesome Sweeteners); aleading soup company (Kettle Cuisine); afresh prepared foods business (HMR Foods

Holding, LP); a Mexican refrigerated foodscompany (Excelline Food Products, LLC); acompany producing and marketing chiaseeds from Australia (The Chia Company),and a large Yum Brand franchisee withTaco Bell, KFC, and Golden Corralrestaurants (K-Mac Holding Corp.).

98

2010-

2010Through 3G Capital, Continental Grain

participates in the acquisition of BurgerKing and then in 2013, of Heinz.

2013Arlon implements a LatinAmerican private equity

strategy focusing on food andagriculture based in SãoPaulo, Brazil. Continental

Capital Ltd. co-sponsors an investment strategy based inBeijing focusing on food and

agriculture in China.

2012Continental Grain becomespart of an investment group

acquiring Louis Dreyfus Highbridge Energy, which is

rebranded Castleton Commodities International LLC.

2013Continental Grain turns 200.

contInental GraIncontInueS forwarD

100

Arlon Latin America Partners (ALAP)

Building on its success with AFAP, Arlonrecently implemented a Latin Americanprivate equity strategy, Arlon Latin AmericaPartners based in São Paulo, Brazil. Thecompany believes that Arlon can capitalizeon its deep food and agriculture expertiseand local industry contacts in a growingmarket and take advantage of the numerousopportunities in Latin America to createvalue-added partnerships with strongmanagement teams.

Continental Capital Ltd.

Recently, the China-based subsidiary ofContinental Grain, Continental Capital Ltd.,co-sponsored a third investment strategybased in Beijing, focusing on food andagriculture in China and other areas ofAsia. Continental Capital Ltd. makes directinvestments in private companiesthroughout Asia, with a focus on China.Continental Capital takes a long-term,

value-added view on its investments andtargets emerging, high-growth food andagribusiness firms in China and selectdeveloping Southeast Asian countries.

Continental Capital Ltd. capitalizes onContinental Grain’s early entry into Chinain 1981 and its leadership in introducingmodern agricultural practices in China.Continental Grain and Continental Capitaloperate today as a complementary hybridoperating/investment company. Theoperating team grows its businesses bothorganically and by pursuing strategicrelationships in animal protein-basedbusinesses in China. Simultaneously, theinvestment team, with the involvement ofthe operating team, invests alongsidemanagement teams of food andagribusiness companies and supports theirgrowth by leveraging Continental Grain’sand Arlon’s global food and agribusinessexpertise, network and investment skill set.

China is a major demand center for foodand agriculture as a result of the country’slarge population and growing middle class.Asian countries are looking for bestpractices to improve domestic production offood and agriculture by increasing crop andlivestock production, and implementingbetter food safety and security practices.Continental Capital Ltd. believes theseimprovements and innovations and thecontinued demand for agricultural productswill create numerous investmentopportunities.

Arlon Capital Partners (now fullyinvested)

Between 2008 and 2010, ACP alsoparticipated in three regional, commercialbanking company investments (CarlileBancshares in Texas, Northeast Bancorp inNew England, and Grandpoint Bank inCalifornia). Additionally, when theprincipals of Monarch Alternative Capital, adistressed debt investment firm, sought aninvestor to help them repurchase a stake intheir management company, Arlon was alogical partner. This was based on ACP’swillingness to invest in a non-traditionaldeal structure, its long-standingrelationship with the Monarch team, andknowledge of their investment expertise.

Since then, the Monarch funds haveoutperformed most of their peers and thefirm has grown to over $5 billion of assetsunder management.

Arlon Opportunities Investors (AOI)

Arlon’s second investment strategy, ArlonOpportunities Investors, invests in publicequities and related commodities in thefood and agriculture industry.

Through Arlon’s two strategies, thecompany is able to seek new global growthopportunities across the entire food andagriculture supply chain, tapping into themany worldwide relationships ContinentalGrain has forged over the decades andworking closely with both old and newinvestment partners.

The company believes that ContinentalGrain’s history, networks and partnership-orientation help to position Arlon toidentify and invest in the best ideasavailable in the food and agriculture space.Arlon has approximately $750 million inassets under management and isheadquartered in New York, with apresence in São Paulo, Brazil, and inBeijing, Shanghai and Hong Kong, Chinathrough its affiliate, Continental Capital Ltd.


Paul Fribourg and Yuan Zhan Guo establish new Rmb fund partnership in China.

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Continuing the Legacy of ContinentalGrain Company

Continental Grain has come a long way in200 years — from a small European graintrading business to an active, global food,agribusiness and commodities investmentcompany. The company has achieved aunique balance between long-term familyownership, professional management,meritocracy — giving capable people thechance to build unique businesses — and agovernance structure of wise people whocare deeply about the company and its

future. If we can keep these elements in ahealthy balance, we have a great chance tokeep the legacy of Continental Grain alivefor many years to come.

Future generations will face new challengesand opportunities. They, too, will have toconstantly reinvent the company. Theentrepreneurial and pioneering spirit thatcomes from the company’s grain tradinglegacy should serve them well in the next200 years. In the words of Steve Jobs, theywill need to “stay hungry and stay foolish.”

We thank all of you who have played arole in bringing us to where we aretoday. It’s been a great team effort, agreat journey and our future success isdue in large part to your loyalty,dedication and efforts.

Paul Fribourg on behalf of Continental Grain Company

Continental Grain 200th Anniversary Book

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Transcript of Continental Grain 200th Anniversary Book