Mercon Coffee Group: Leading worldwide coffee trader Mercon Coffee Group filed for U.S. bankruptcy due to a “exceptionally challenging operating environment.” In recent years, the company, which operates in Brazil, Vietnam, and Central America, has faced logistical difficulties from the epidemic, bad weather in Brazil, price instability, and rising borrowing rates. In a letter to clients, Mercon’s CEO, Oscar Sevilla, disclosed that lenders chose not to extend credit agreements, resulting in extremely tight working capital conditions.
According to U.S. Bankruptcy Court documents, Mercon and its affiliates face a total debt of $363 million. Key creditors include banks in the countries of its operations, along with trade companies in Brazil, Central America, and the United States. The company’s financial troubles had been the subject of rumors, and these concerns escalated following the closure of Nicaragua’s largest coffee exporter, CISA Exportadora, a subsidiary of Mercon.
The Nicaraguan government acknowledged CISA’s bankruptcy but emphasized that it was not unique to the country’s economic situation. Rumors suggest that Mercon’s financial difficulties stem from challenges in extending credit lines, particularly with Dutch bank Rabobank. While Rabobank confirmed Mercon as a client, it declined to comment further on the situation.
In response to the bankruptcy filing, Mercon assured clients that it would collaborate to ensure a smooth process for open contracts. The company intends to continue operations under bankruptcy protection, utilizing existing stocks and fulfilling ongoing shipments to buyers. The coffee giant’s struggles underscore the intricate dynamics and vulnerabilities within the global coffee trade, affected by a confluence of factors ranging from climate-related challenges to financial intricacies.
Our Reader’s Queries
What is the revenue of Mercon Coffee Group?
Mercon Coffee Group boasts a revenue of $16.0 million, with a workforce of 750 employees. This translates to a revenue per employee ratio of $21,333. The company’s peak revenue was achieved in 2022, standing at an impressive $16.0M.
Who is the CEO of Mercon?
Mercon’s Chief Executive Oscar Sevilla has signed a letter stating that the company’s lenders have chosen not to extend credit agreements. This has led to a situation of very limited working capital for the company.