Cargill India to invest $160 million in the next three years in new businesses

Global food and agriculture major Cargill plans to invest $160 million out of the $240 million it promised in the next three years for fresh acquisitions, including brands, geographical and product-line expansions, two senior officials from the company said.

Once through, Cargill's total investment in India will touch almost $750 million that includes around $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 Marcel Smits (pictured), chairman and chief executive officer, Asia Pacific, Cargill.

Cargill India President Simon George said: “Cargill has so far invested $80 million of the promised $240 million in India and the remaining will be done in the next 36 months in a host of initiatives.” The $80 million investments it made includes $20 million in an aqua feed facility in Andhra Pradesh, $20 million in a state-of-the-art silo to store corn in Davangere having a capacity of 60,000 tonnes. The company is also setting 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, totaling 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,” Smiths said.

The Indian government's intervention in the agriculture sector, where it is a major player, sometimes makes ‘things’ little less predictable for some of Cargill's businesses, like commodities, as compared to other countries, but since the size of commodities business is small, the company says it does not have much impact on their overall operations. It also feels that till the time there is level field for all, policy interventions in duty structure do not impact them much.

Cargill’s edible oil business, both as a bulk importer and also a leading player in the branded edible oil segment in India, forms a significant chunk of revenues of the company from India.

On the recent trade war between US and China and its impact on global commodities trade, Smits said Cargill as a company believed that free-trade is absolutely necessary if the world wants to feed 9.5 billion people by 2050.

"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," Smits said. He said free trade is not a zero-sum game, which means that all sides can have a win-win situation.