(Bloomberg) -- Amer International Group Co., the Chinese metals giant founded by copper tycoon Wang Wenyin, laid off the two employees it hired this year to set up an oil trading desk in Singapore, according to people with knowledge of the matter.
The oil trader and operator, who were hired by the company’s Awin Resource International Pte. Ltd. between January and March, left this week, according to the people, who asked not to be identified as the information isn’t public. That effectively closes the desk, they said.
A base metals trader was also cut as the company scales back some of its non-copper related activity, the people said. Multiple attempts to seek comment from the company by phone and email were unsuccessful.
Amer’s pull-back comes amid a tumultuous period for commodities trading, as the Covid-19 pandemic destroys demand for raw materials and throws supply chains into chaos.
While some trading companies have prospered amid the ensuing market volatility, others have struggled as their lenders become increasingly concerned about their exposure to the highly leveraged, low-margin business. Fearful banks are turning their backs on the industry, making it harder for traders to find the funding they need to survive.
The situation has only been exacerbated by the collapse of legendary Singapore oil trader Hin Leong Trading (Pte) Ltd. just weeks after another commodities firm in the city-state, Agritrade International Pte, failed after a unit defaulted on its loans.
Amer’s founder Wang, a low-profile character who started a cable wire factory in Shenzhen in 1990s, is behind Amer’s transformation into one of China’s biggest private companies. It was ranked 119 in Fortune Global 500 list in 2019 with annual revenue of $76.4 billion, profits of about $1.5 billion, assets of $21.2 billion, and nearly 17,000 employees as of 2018, according to Fortune’s website.
Amer’s Fortune ranking, which measures annual sales revenue, was higher than some global commodities conglomerates such as ArcelorMittal SA, the world’s biggest steelmaker outside China, and Chinese state-owned food giant COFCO Corp, whose business spans diary to oilseed crushing to beverages.
In a rare interview in 2015, a top official at Arc Resources Co., an Amer trading unit in Shanghai, told Bloomberg that the company handled about one tenth of China’s copper imports. It opened its Singapore office in 2014 as a move to expand metals trading and to buy global mining assets.
©2020 Bloomberg L.P.
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