Interview with Mr Simon George, President, Cargill India
Being one of the oldest American companies in India, what has driven Cargill’s investments in the Indian market?
Cargill creates connections across the global food system to help the world thrive. With India being one of the fastest-growing large economies in the world with thriving young population, urban class, and talent amongst others it is imperative for Cargill to have a meaningful presence in the country, to fulfil its mission of nourishing the world. India also has a large agriculture and food sectors which provides an opportunity to work on productivity, storage, logistics and marketing and allows companies like Cargill to bring in their global experience and foster growth.
The country also has the biggest Livestock population in the world. Through our Animal and Nutrition business, we leverage our global expertise to contribute to farmers income and enhance productivity levels. Cargill operates in Animal & Nutrition primarily through its three businesses: Cargill Animal Nutrition, Cargill Aqua Nutrition and Cargill Health Technologies.
Being a 155-year-old company, we take a long-term view of markets. We are looking at India to play a more significant role in Cargill’s global operations and will continue working on bringing in our global expertise, products and solutions to the country. We are concentrating our efforts in taking made in India products & solutions to the world markets and thereby providing international market access to farmers and leveraging India’s knowledge capabilities for R&D and delivering business services to our businesses globally.
Maintaining the supply chain was a major concern for food processing cos in lockdown, how was Cargill able to navigate the COVID-19 Lockdown in India?
The pandemic undoubtedly presented us with an uncertain crisis. However, since, we supply essential commodities like edible oil, wheat flour and animal feed which are critical to feed people and animals, we were allowed to operate during the pandemic. During this unprecedented situation, we tried our best to ensure that our product reached our customers and consumers with least possible disruption. We have 12 manufacturing locations across India engaged in production of food and nonfood items and we tried to ensure that production, packaging, warehouse and transportation were not impacted due to labor shortage or logistical challenges and deliveries happened timely.
In addition, we received tremendous support from various authorities at center, state and the local administration level which ensured that we were able to maintain the supply chains and feed the consumers and animals. We are also thankful to our employees who continue to show exceptional commitment by coming to work to ensure food supplies do not get interrupted.
Cargill has been present in the state of Karnataka since 1983 and has multiple facilities in the state, how has the ecosystem in Karnataka supported Cargill’s investment journey in India?
Karnataka is a key state for Cargill’s India growth plan, and we have different businesses present in the state. With over 3500 employees in the state, our largest investment in the country of INR 800 Cr wet corn milling plant and bulk storage is in Davangere, Karnataka.
Through our Agriculture Supply Chain business, we also purchase over 2,50,000 Mt of corn annually thereby supporting better price realization for 120,000 farmers by connecting them to customers and markets. In addition to this, Cargill’s Animal Nutrition and Health business has 3 production plants: 1 for premix, 1 for therapeutical products, 1 for chemical products and a R&D centre. Beside catering to domestic requirements, we also export to South East Asia.
In 2015, we started our Cargill Business Services operations in Bangalore office. It is by far the largest center for us in Cargill globally. The team delivers services in IT, Finance, HR, Procurement and Logistics areas. Many cutting-edge technologies like AI, ML, IoT, Cloud and Analytics are also developed by Bangalore team.
We strongly believe Karnataka’s culture of Innovation and growth, strong industrial and agriculture base, proactive and investor friendly government has created an ecosystem for Cargill and other global and local companies to have the state of Karnataka as a preferred destination of choice.
What are the potential opportunities Cargill foresees for American companies in Karnataka in a Post-COVID era?
Karnataka is home to a very strong agricultural base which includes various food crops and offers immense scope for the development of food processing industries.
It was the first state to introduce online mandis which helped integrate 150 mandis on a single online platform, contributing further to the vision of Digital India. State also cleared the Ordinance to bring in changes to the Agricultural Produce Marketing Committee (APMC) Act to remove restrictions on the sale of farm produce which will help grow the sector.
There are huge opportunities for the state in warehousing, cold storage, and logistics space that we foresee along with a significant growth in organic farming.
What do you think Indian Food processing and FMCG will look like 10 years from now?
With the world population expected to reach 8.5 billion by 2030s of which 4.9 billion will be in Asia, including nearly half of the world’s urban population, the global food industry has a significant role to play in meeting the food requirements of the world.
According to industry estimates and the United Nations, global demand for food and agri products is expected to grow by about 60-80 percent by 2050. Farmers worldwide will have to produce more by enhancing productivity and deploying technology. Manufacturers will have to cater to demands for healthier and diversified food; while managing under nutrition and micro nutrient deficiencies in developing economies.
Other factors like technological advancements in food storage and distribution systems will also assume significance as we continue to manage climate change challenges. Developing a sustainable and resilient global food system is essential for a food secure world in 2030 which includes:
- Sustainable agri practices: Biotechnology has already shown significant benefits in countries around the world. We will see wider adoption of technology going forward including drought and flood resistant seeds, pest and disease resistant crops, along with seeds that provide micronutrients and vitamin fortification. Additionally, we foresee climate-smart agriculture tools to help farmers adapt to the environmental changes and improve the quantity and quality of produce.
- Technological solutions to improve food distribution systems: Leveraging big data on various aspects from population figures to weather conditions and eating habits to public health records, will be important to improve food systems around the world. Avenues such as blockchain technology, which can monitor and trace food in the supply chain, will help enable transparency as well as increase responsiveness to food safety issues by allowing products to be traced which would ease product recall and reduce food waste in years to come.
- Fortification and Reformulation: Food fortification addresses micronutrient deficiencies and has had far reaching impact on public health. Regulators have already been supporting fortification in food products including salt, oil, milk, wheat flour etc. Going forward, we will see more food products and crops getting covered under the fortification objective with focus on quality of fortification. In addition to this, Reformulation is another product innovation that is likely to become commonplace over the next decade.
- Robust food infrastructure for food security: Nothing disrupts food supply chains like infrastructure failures, for instance, a lack of ample storage or a transport disruption. We see significant investments being made both by governments and private sector in the food infra space including climate change mitigation measures, risk management, cold storages to reduce food loss etc. Advanced logistics, safe transportation and better storage will be all important to ensure food security for nations.
- Harmonized Food safety standards: A science-based set of parameters will enable food to move seamlessly across borders, from areas of food surplus to areas of deficit. While many countries have already adopted the Codex based food safety standards, we are sure to witness more harmonized food standards globally that will be enabled by technology and responsible trade practices.
A decade from now, feeding the global population in a safe, sustainable, and responsible manner will require unprecedented innovation and coordination by all stakeholders in the global food value chain. Every spoke in this wheel must work together to produce more efficiently, move more efficiently, and consume more efficiently. Doing so, we can hope to create a sustainable global food balance in the future.