IBEF: October 09, 2019
Cargill, a global food and agriculture company plans to invest US$ 160 million in the next three years for fresh acquisitions, including brands, geographical and product-line expansions, two senior officials from the company said. It has promised US$ 240 million investment in the coming three years.
As this investment will be processed, the company's total investment in India will touch almost US$ 750 million that includes around US$ 500 million in various facilities across the country over the years.
"Discussions are on towards increasing farmers' income and productivity. We think that Cargill's various businesses from agricultural supply chain, food and animal nutrition could play a big role in the months to come," said Mr. Marcel Smits, chairman and chief executive officer, Asia Pacific, Cargill.
Cargill India President Mr. Simon George said, "Cargill has so far invested US$ 80 million of the promised US$ 240 million in India and the remaining will be done in the next 36 months in a host of initiatives." The so far amount of US$ 80 million has been invested in US$ 20 million in an aqua feed facility in Andhra Pradesh, US$ 20 million in a state-of-the-art silo to store corn in Davangere having a capacity of 60,000 tonnes. The company also plans to set up a feed meal plant in Kota of Rajasthan.
Cargill also has a commodities business in India, under which it has sourced almost 13 commodities from around 300,000 farmers in 2018-19, totalling 600,000 metric tonnes.
"In India, the government plays an important role in the agriculture sector, which is largely self-sufficient. Our commodities business is relatively smaller here compared to other parts of the world and largely domestic. However, all that is rapidly changing. Going forward, one would have to be well integrated with the global supply chains to stay globally competitive," Smits said.
The intervention by the government makes the business little less predictable for industries like commodities, when compared to other countries, but since the size of commodities business is small, it does not have much impact on their overall operations. According to the company, the policy interventions in duty structure do not impact them much as there is still level field for all.
The edible oil business of the company consists of both as a bulk importer and also a leading player in the branded edible oil segment in India. This forms an important portion of revenues of the company from India.
According to Mr. Smits, "Globally, Cargill has long been a strong votary of free trade and we strongly feel that if the world has to feed 9.5 billion people by 2050, it has to allow comparative advantages to play out which can be best done through free-trade." He further added that free trade is not a zero-sum game, which means that all sides can have a win-win situation.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.