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Moving Essential Commodities Around The World

September 3, 2012

As in most cases the area of production is not the same place as the area of consumption. In fact the location where a commodity like wheat or natural gas is produced or extracted is not so densely populated so the market is too small for the commodity produced. It has to be sold somewhere else. These are in populated places usually far from the area of production.

Who will move these commodities? Farmers are usually not that sophisticated and have enough worries running their farms.  One company that has the capacity to move huge quantities of commodity is Gavilon Group, LLC, based in Omaha, Nebraska. It is the third largest grains handler in the U.S.

The company is a leading commodity management firm, connecting producers and consumers of food and energy through its global supply chain network.  Gavilon provides origination, storage, transportation, marketing and risk management services in grains and ingredients, fertilizer, and energy.

The company’s assets and capabilities are quite impressive. It has 2,000 employees in 300 locations on six continents.  Through railcars, barges, trucks, vessels and major North American pipeline systems the company delivers around 250,000 railcar, 47,000 container, 800,000 truck, 300 vessels and 3,900 barge shipments annually.

Gavilon has 145 grain facilities with over 320 million bushels of licensed storage capacity and 12 regional offices. It markets products from over 40 production facilities and distribution ingredients through over 40 owned and leased transload and storage facilities. Gavilon distributes around 30 million metric tons of grain and 8 million metric tons of ingredients.

The company also has storage capacity for 7 million barrels of crude oil, 500,000 barrels of refined products and 10 billion cubic feet of natural gas.

This enterprise began over 135 years ago as Peavey Company. It became part of ConAgra Foods in 1982 and has adapted to the many changes that has taken place in the commodities and energy businesses.  It became an independent company in 2008. In May 2012 it was announced that Gavilon would be acquired by Japanese trading giant Marubeni in deal worth $3.6 billion excluding debt.

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