Gerald Group – Leveraging expertise and exploring new opportunities

As Extinction Rebellion protests disrupted the bustling tourist spot on Trafalgar Square last October, I met with management of commodity trader Gerald Group at their London office. Gerald Group, one of the world’s oldest commodity trading companies, with a global footprint from Stamford to Shanghai, has its origins as a copper merchant. With a trading philosophy embedded in its most valued employees from the days of founder Gerald Lennard, nearly six decades on, Gerald has evolved to become the largest independent, employee-owned metals merchant in the world.

The Group is actively exploring new opportunities leveraging on decades of experience, and investing in new metal merchant transactions, from prepayments to new min-
ing projects. Gerald plays a vital role in ensuring that global industries have a steady supply of responsibly sourced raw materials. The Group sources, store, processes, and transports
ferrous, non-ferrous and precious metals, concentrates, and other raw materials, which are then consumed in our everyday lives in an infinite range of products. For commodity companies, sustainable transaction flow is critical to ensure reliable, efficient, and timely off-take to supply a growing global customer base. Craig Dean, Gerald’s CEO, says it’s not just about increasing deal flow: “We must be smart, nimble and manage a certain amount of risk. Does this fit with our conservative approach to The Group has strategic investments around the world in core trading areas from tin, copper, chrome ore and iron ore to precious metals risk management? I would say, risk management is key in our business, and more so if we want to grow in a dynamic industry. We have very talented people who manage our businesses, but there will always be head winds and dynamic variables. Our strategy is to endeavour to create value and to grow while staying true to our core philosophy of trading ethically and responsibly.” Min Zhang, a member of the Board of Directors, has been at Gerald for 20 years, and is credited for her analytical prowess in response to changing market scenarios.

As Gerald’s Head of Copper Concentrates, who formerly worked at Glencore, Ms Zhang expects 2020 to be another challenging year for global markets, acknowledging that trading teams have a lot more to consider in the current environment.

Complex issues in respect of geo-political and economic scenarios, greater transparency, higher costs and other events can impact margins. The incentive to be highly analytical and innovative at the same time is paramount for creating value in the supply chain.

She remarks that “before we invest in a strategic asset, we do our due diligence, look at the business, the markets and how we can mitigate our risks given the conditions we’re investing in. For this, we need the right level of information in our deal analysis and as reflected in our terms of engagement.”

Ms. Zhang exemplifies Gerald’s diversity, where three out of seven of the Group’s Board’s representation is female, a rare ratio in the commodity trading industry. In December Patricia Nikolopoulos, who has a 20-year track record at the Group and has served as Global Head of Risk and CFO, North America was appointed to Group CFO and Board member. Trade finance solutions Gerald has strong financial relationships, enabling it to offer an array of trade finance solutions to producers and consumers. The Group has strategic investments around the world in core trading areas from tin, copper, chrome ore and iron ore to precious metals. Mr. Dean believes that Gerald has the global capabilities to bridge relationships with producers, banks, refineries and processors, logistics chains and governments: “Our activities ensure that our customers can depend on us, but at the same time, we aim to play a wider role by giving back to communities while applying the highest ethical operating standards across all our activities, including the OECD’s Guidance for Responsible Supply Chains of Minerals. If we can play our role in delivering natural resources responsibly and reliably, then we are a responsible corporate citizen of the world.”

David Whittaker