The man behind Glencore: Ivan Glasenberg
Glencore’s origins under the leadership of Marc Rich, the controversial oil-trader, are seized on by its critics who harbour doubts about its secretive style. It began as Marc Rich + Co in 1974 before it changed its name in 1994 after Mr Rich, then a fugitive in Switzerland from tax evasion charges in the US, sold out to management.
By Javier Blas
Published: April 15 2011 23:02 | Last updated: April 15 2011 23:02
If a thriller writer were creating the character of a shadowy commodities trader, whose rise to global dominance and Croesan wealth occurred with barely an appearance in the public eye, then surely it would be modelled on Ivan Glasenberg.
For more than a decade the South African head of the commodities giant Glencore has been one of the great enigmas of the corporate world. From its headquarters in the discreet Swiss canton of Zug, known for its low taxes and numbers of wealthy foreigners, he has built up a multibillion dollar empire, the world’s largest trading house, that dominates the market of its many activities, from zinc to copper, lead and thermal coal.
Glencore’s origins under the leadership of Marc Rich, the controversial oil-trader, are seized on by its critics who harbour doubts about its secretive style. It began as Marc Rich + Co in 1974 before it changed its name in 1994 after Mr Rich, then a fugitive in Switzerland from tax evasion charges in the US, sold out to management.
Until this week the blunt and plain-speaking Mr Glasenberg, who joined in 1984, has done little to change this perception. Eschewing publicity he has rarely spoken in public, hardly been photographed and refused requests for interviews. All the while he was busy turning Glencore into a behemoth and a rare company with sourcing, production, marketing and trading under one roof. The company, bought from Mr Rich for around $600m, is worth about $60bn.
Then on Thursday he finally stepped out of the shadows as he launched Glencore’s multi-billion dollar initial public offering. As is customary with such well-scripted moves he heralded ambitious targets. In this opening charm offensive, Glencore also surprised seasoned traders, revealing one of Glencore’s most closely guarded secrets: the scale of its trading operation, which controls up to 60 per cent of some markets.
Mr Glasenberg, 54, is now a very wealthy man. Yet he could be forgiven for hankering for his old privacy in Switzerland. He will have been left in no doubt that this move into the public eye could be a difficult transition. On the same day that Glencore was listed, it comprehensively bungled the unveiling of a new chairman, inexplicably delaying the announcement by eight hours, and so pandering to those who question his commitment to corporate governance.
Mr Glasenberg, who is married and has two children, likes to say he came to the business by accident. As an undergraduate studying accountancy at Witwatersrand University in Johannesburg, in apartheid-era South Africa, he took a course in commodities. It was then that he was first inspired by the business by observing the success of an international candle-wax trader.
Soon afterwards, he moved to the US, to complete an MBA at the University of Southern California in Los Angeles. His critical career move came just after finishing his MBA when he landed a job at Marc Rich + Co.
The job offer in New York collapsed as the trading house scaled back its offices in the US following Mr Rich’s entanglement with the judiciary. In 1983, Mr Rich was indicted for tax evasion and he became a fugitive in Switzerland until Bill Clinton pardoned him, on his last day in office in January 2001. Mr Glasenberg, however, was told a job was available back home in Johannesburg. He started in the traffic department, where trainees run shipping details, making sure vessels are loaded on time. It is then that he learned arguably the key to a successful trading company: long-term relationships. He has remembered this to this day. Rivals and colleagues say he is constantly on the phone, gathering intelligence or cementing relationships, and supposedly always ready to jump on the plane and smooth a deal, whether by visiting a chief executive or head of state.
He rose up the ladder quickly, moving after three years to Sydney as a coal trader and, then after a two-year stint in Hong Kong and Beijing, in early 1990 becoming head of the coal department at the company’s headquarters in the small Swiss town of Baar. His rapid progress is textbook Glencore which prides itself on grooming managers from the ranks. In January 2002 he was elected chief executive, replacing Willy Strothotte, by the estimated 300 employees who owned shares at that point. The number has increased to 485 today.
As the largest shareholder, he will have a vast paper windfall with the IPO, but he has not revealed how much he owns and is not expected to do so until the last minute. He has, however, promised not to sell a single share while he works for Glencore.
Retiring he may be, but, unsurprisingly, he has a ruthless and competitive spirit. A sports fanatic he almost competed in the 1984 Olympics in speed-walking. South Africa was then banned because of apartheid and, with his Jewish ancestry, he sought to go as an Israeli but could not complete the paperwork in time.
He sees himself as a no-nonsense entrepreneur with a loathing of corporate blather. Colleagues say he embodies the culture of Glencore which prides itself as made of hard-hitting traders who are ready to go where others do not: Colombia in the early 1990s or Congo in the early 2000s. Such ventures have left Glencore with a reputation as a risky trader which exploits weak governments, an argument he strongly denies.
A few years ago, when speaking at the University of Southern California he told students that once they had chosen their field they should “dedicate to it and work the hours”.
He added: “You’ll sacrifice a lot of things in the early part of your career to be successful, but to be ahead of your competitors, you have to work hard. Many people may say that luck is important, but I think you create your own luck by working hard to ensure you don’t miss opportunities.”
John Buchan, that arch-chronicler of yarns about enigmatic African pioneers, would have been proud of a hero who made such a speech.
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