Cargill Brings In Big Gun To Run Asia, Historic Shift After 154 Years In Business

 

Pamela Ambler, Forbes

Jun 11, 2019

 

Cargill is the world’s largest agribusiness by sales, with $115 billion in revenues last year, and is among the oldest, founded in 1865. In December last year, the privately held U.S. company took a historic step, appointing its chief financial officer Marcel Smits to a new role, chairman of Asia Pacific and head of corporate strategy, and relocating him from its Minneapolis headquarters to Singapore in January. While Cargill has long had a presence in Asia, Smits, 58 and a Dutch citizen, is the first board-level executive in the company’s 154 years of history to operate outside the U.S. and be given a specifically regional post, signalling the significance of Asia to the company.

 

Cargill has been operating for 154 years, why now to make such a senior appointment for Asia in Singapore?

 

Cargill has a significant presence in Asia. About 15% of our gross investment is in APAC. That number has grown over the last 15 to 20 years and that number is going to continue to grow. I think it’s safe to assume that that will increase. It was clear that we'd like to have a larger share of our business in Asia. We discussed with our board that we need to enhance our presence and enhance our executive presence, so I raised my hand. I have strong conviction. Basically, what we’re trying to do is to make sure that we run with Asian role models and Asian talent. As an organization, we have more work to do, but we have interesting examples where we have Asians run businesses, and they are very successful. Two is, we're going to increasingly rely on Asian partnerships, be that with government or private partners.

 

When you refer to Asian role models, do you mean individuals within the organization or industry leaders?

 

It’s both. For example, we have a team of traders sitting in Shanghai. They’re all native speakers and that is serving us very well. They are now at the cutting edge of cargo in terms of algorithmic trading. They are moving into all sorts of pricing stability products for customers. They have become a fairly sophisticated trading operation inside of cargo and it’s appropriate for them to be in Asia because that’s where the market is.

 

We have people who understand what kind of iron ore comes out of the mines. What kind of iron ore is needed into different types of mills. That allows us to make sure that we connect the right buyers to the right sellers. That also allows us from time to time identify dislocations in the markets. We’re merchandisers so we’re making sure iron ore gets to the right place and then we will take proprietary trading views. But the basis of the business is physical flows.

 

The big question on everyone’s mind is China—how are the ongoing macroeconomic issues going to impact business? ...   

 

What is Cargill’s biggest business in China now and has anything changed as a result of trade conflicts? ...

 

Until the trade conflict is resolved, does Cargill have an contingency plans? ...

 

Cargill just celebrated its 50th anniversary of doing business in Thailand, and 70th in Philippines, what are your major assets in each of those countries? ...

 

more

https://www.forbes.com/sites/pamelaambler/2019/06/11/cargill-brings-in-big-gun-to-run-asia-historic-shift-after-154-years-in-business/