Singapore-listed commodities firm Noble Group expects its flagging agriculture business to turn around in the second quarter of 2013, its CEO Yusuf Alireza told CNBC.
The trading company reported a 9 percent rise in net profit to $471 million for the calendar year 2012, fueled by growth in the commodities firm's energy and metals segments.
Noble Group's agriculture business revenue, however, for 2012 declined 15.8 percent on the previous year.
Alireza blamed what he described as the company's "worst year for agriculture" on account of a poor harvest in Argentina and negative margins in China, where the crops are processed. But Alireza said these negative headwinds were set to turn around in 2013.
"This year Argentina looks like it's going to have a significantly better harvest and in China the crushing margins have already started to improve...Over the next two years, we have committed capex of $500 million, so things should improve over the course of the year, starting probably in the second quarter," said Alireza.
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The CEO said excess capacity in China was a crucial headwind for commodity firms operating in the world's second largest economy.
"In the crushing business you have 100 percent overcapacity there and you see the same in steel and shipping. This is one of China's main challenges," he said.
Alireza added that in his view China's economy bottomed late last year.
"If you look at China it is clear to us that the economy did bottom out in the third or fourth quarter of last year and you'll probably see growth at around 8 percent this year," he said.
On Tuesday the Chinese government set a growth target of 7.5 percent for 2013 as it kicked off its National People's Congress. The economy grew 7.8 percent in 2012.
Alireza also said plans for the much-speculated initial public offering (IPO) of the firm's agriculture business were "firmly off the table".
"We have no interest in selling our business. We think there are significant organic growth opportunities in the agriculture business," Alireza told CNBC's Asia "Squawk Box."
The group initially planned to list its agricultural business in October 2011, but shelved plans due to difficult market conditions, according to press reports.
Katie Holliday is a writer on CNBC.com. Follow her on Twitter.