The role of a multi-national in developing markets
A Cargill case study

Page 1: Introduction

Cargill 3 Image 6This case study shows how a multi-national corporation, Cargill, enables people throughout the world to enjoy a variety of food products and other commodities, which have often passed along distribution channels covering thousands of miles. The study also focuses on the way in which Cargill has encouraged emerging markets in Africa to develop since 1981. The growth of such markets has supported development of sustainable self-help in a number of African countries and has enabled a number of Cargill’s businesses to expand. Cargill believes in establishing new businesses and then progressively supporting these activities by nurturing them over a long period of time. Longer term progress is more important than short term gain, although all businesses are expected to be profitable.

Cargill is the largest private company in the United States, with assets more than three times the size of the next largest. It was founded by William Wallace Cargill, the second-oldest son of an immigrant Scottish sea captain and is today owned by his descendants – the Cargills and MacMillans. The history of the company helps us to understand the way it operates today. Unlike large public companies which must maximise short term gains for shareholders, a private company like Cargill is able to take a longer term view. After more than 130 years Cargill is still a low profile and often unknown company to most consumers – largely due to the fact that there are no Cargill-labelled products on retail store shelves and no branded consumer advertising. Like many other privately held companies, Cargill releases only limited financial information. However, the company is well-known
to the agricultural, food and financial markets in which it operates. Cargill has been active in the UK since 1955 and currently employs more than 5,000 people in 22 plants and offices nationwide. Principal locations include headquarters at Cobham (Surrey) and operations at Hereford, Hull, Liverpool, Swinderby (Lincolnshire), Tilbury (Essex) and Wolverhampton. African activities are also directed from the company’s UK headquarters.

The world's economy

Large multi-nationals, such as Cargill, play a valuable role in the international world economy. Cargill, for example, provides a broad range of food products and commodities. If your answer is ‘yes’ to any of the above questions, then you are likely to have consumed something from Cargill today. Answer ‘yes’ to a number of these questions and you will start to realise the role international marketers and processors of commodities play in the world’s food supplies and economy.

Much of Cargill’s revenue comes from trading. It is a leading importer and exporter of grain world-wide and it buys, stores, ships and sells most other crops. It is an international marketer and processor of agricultural, financial and industrial commodities and employs more than 76,000 people in nearly 1,000 locations in 66 countries. Company businesses are classified into three segments: Commodity Trading and Processing, Industrial and Financial. Principally, Cargill operates in four geographic regions: Asia/Pacific, Europe/Africa, Latin America and North America. The company has approximately 40 per cent of its assets invested in businesses outside North America.

Commodity Trading and Processing

Trading

  • Coffee
  • Cotton
  • Fats and Oils
  • Freight Operations/Vessel Charter
  • Grain
  • Petroleum
  • Rubber
  • Sugar

Processing

  • Cattle Feedlots
  • Cocoa
  • Contract Pig Production
  • Feed
  • Fertiliser Production and

Distribution

  • Flour and Rice Milling
  • Fruit Juices and Concentrates
  • Malt
  • Meat (Beef, Pork, Poultry and
  • Eggs)
  • Oilseed Processing
  • Salt
  • Seed

Industrial

  • Ferrous Metals Trading
  • Steel and Wire Service Centres
  • Steel Manufacturing
  • Steel Recycling

Financial

  • Brokerage
  • Commodity and Financial Futures
  • Financial Instrument Trading
  • Leasing
  • Structured Finance

Cargill | The role of a multi-national in developing markets

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