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Cargill CEO plots new course for agribusiness giant (Tuesday, Nov. 19, 2002 -- CropChoice news) -- The following stories related to Cargill are presented courtesy of the Agribusiness Examiner (http://www.ea1.com/CARP).
BUSH NAMES CARGILL EXECUTIVE TO REPRESENT "FARMERS" ON U.S. INTERNATIONAL TRADE COMMISSION
DOW JONES NEWSWIRES: President George W. Bush formally
nominated Daniel
Pearson yesterday to fill a seat at the International
Trade Commission,
a move that could clear the way for another ITC nominee
delayed since
June.
Pearson's career at Minneapolis-based agribusiness giant
Cargill may
provide agricultural expertise at the ITC as requested by
Senate Finance
Committee members who said they would oppose another
pending nominee,
Charlotte Lane, until the commission better represents
the farming
sector.
Sen. Bob Graham, Dem.-Florida, who put a hold on Lane's
nomination, has
requested a meeting with Pearson to discuss "agricultural
issues and
their representation at the International Trade
Commission," said Graham
spokesman Paul Anderson. The president has nominated
Lane, a West
Virginia public service commissioner, and Pearson to fill
two empty
seats on the six-member ITC board.
Sen. Charles Grassley, Rep-Iowa, who takes over as
chairman of the
Finance Committee in January, has echoed Graham's
concerns about a lack
of ITC representation for farmers who account for more
than $50 billion
in annual U.S. exports. The senators have cited 18 U.S.
antidumping
orders and several pending cases involving farm products,
as well as an
expiring "peace clause" with the EU that could lead to a
surge in
agriculture trade disputes at the World Trade
Organization after
December 31, 2003.
Pearson would serve a nine-year term expiring June 16,
2011. At Cargill,
he has most recently served as assistant vice president
for public
affairs and has been a policy analyst in the public
affairs department
since 1987, focusing primarily on trade policy issues.
From 1981 to
1987, Pearson was the agriculture legislative assistant
to U.S. Sen.
Rudy Boschwitz and worked on a family farm in Minnesota
in 1979 and
1980. Pearson earned a bachelor's degree and Master's
degree in
agriculture economics from the University of Minnesota.
CARGILL CEO PLOTS NEW COURSE FOR AGRIBUSINESS GIANT
Neil Weinberg and Brandon Copple, Forbes Magazine: Down a two-lane highway
that winds through oaks and evergreens 25 miles west of Minneapolis, a
secluded access road turns off to the south and is marked only by a
small sign: "Cargill Lake Office." There near the shores of Lake
Minnetonka, amid the sedate elegance of an antique French-style mansion,
Warren Staley plots a revolution at the most dominating--and obsessively
private- --- company on the planet.
On the face of it Cargill looks like the last business in need of a
shakeup. Earnings more than doubled last year. At $50 billion-plus in
annual sales, Cargill is twice the size of its closest rival, Archer
Daniels Midland, and bigger than Procter & Gamble or AOL Time Warner or
Merrill Lynch.
In sales Cargill is the 19th-largest company in America. Its 97,000
employees run more than a thousand production sites and operate out of
59 countries. They feed the world's herds and fertilize its crops. They
store the harvest, process it and transport it around the globe. They
finance and hedge the risk.
Cargill, or farmers working for it, raise 17% of the world's turkeys. In
the U.S. it controls 22% of beef production and 25% of grain and oilseed
exports. Its vast financial trading arm is a leading commodity broker
and a heavyweight in sovereign debt, having reportedly controlled
one-quarter of Russia's bond market. Is this behemoth too damned big for
its own good? Is it too big for the good of the country?
Such suspicions run deep because Cargill goes to such lengths to keep
its profile low. Some foreign outposts bear no company shingle. Its
annual report contains no financial tables. Discretion is so deeply
woven into the company that even former Cargillites shy away from public
comments about their old employer --- compliments included. Cargill has
been incomparably adept at growing without having to go public and
making all the compromises that would entail.
"I'd hate to have to manage this company worried we'll miss an earnings
forecast by a penny a share and have 40% clipped from our value," says
Staley. "It's a great advantage being private, with shareholders who
understand agriculture is cyclical, returns are lumpy and not every risk
will go our way."
C. Daniel Clemente, a Virginia lawyer who is a Cargill family trustee,
says the company is a paragon of how to stay out of the public equity
markets for generations. "Cargill should be the Harvard Business School
model for how to stay private," he says.
Cargill, founded in 1865 by William and Samuel Cargill, sons of a
Scottish sea captain, started out as a lone grain-storage flat house in
a frontier town in Iowa. Over the decades Cargill grew like bamboo,
silently snaking its roots below ground only to shoot up in unexpected
places and redraw the landscape.
Sprouting from the grain trade, it spread its tendrils into farming,
milling, flavoring, a fleeting stab at energy trading and a bizarre
global mishmash of seemingly unrelated ventures, from steelmaking to
viatical financing to ownership of a casino in Las Vegas. Cargill let
these businesses operate separately and autonomously, each one unaware
of (or unconcerned with) goings-on elsewhere in the empire.
No more. Staley, 60, chief executive since 1999 and five years from
company-mandated retirement, wants to reshape Cargill into a more
sensible giant with a sharper focus on its origins --- the food business
--- and new cooperation. "To grow our opportunities we have to shrink
our sandbox," Staley says in a rare interview. "That means telling our
businesses, `We won't starve you, but we may shoot you.'"
That is a stunning threat in a firm where lifetime employment is the
norm, especially in the highest echelon, and where employees boast that
their blood runs Cargill green. Staley is shaking the place up. He has
bumped dozens of managers. He is drawing new talent via acquisitions and
new hires. "Making sure the right people are on the bus and in the right
seats" is how he puts it.
In three years Staley has jettisoned $2 billion in businesses, from
steel-pipe making to coffee trading. He has spent a few billion dollars
buying competitors in key markets, building up Cargill's position as the
nation's biggest flour miller and number-two turkey producer, and as the
largest grain merchant and among the biggest producers of vegetable
starches in the world. Staley's shopping spree will continue for a
while, bankrolled by more asset sales, $700 million in cash and annual
cash flow from operations of $2.3 billion. "We're keeping things
bubbling," he says. "Fortunately, cash is king, so it's a very
interesting time for people like us."
CARGILL HISTORICAL HIGHLIGHTS
William W. Cargill begins operating grain-storage flat house in Conover,
Iowa Expands to 71 grain elevators, two flour mills
Willliam's son-in-law John MacMillan Sr. takes over after rescuing firm
from near-bankruptcy.
Sets up first foreign operations in Canada, Italy
Barred from futures trading at Chicago Board of Trade.
Becomes Navy shipbuilder, enters soy-processing business
Loads first bulk corn shipment in Brazil's interior.
Sets up financial unit in Geneva
Enters Korea and Taiwan.
Gets into steelmaking, cattle feedlot businesses.
Cargill, MacMillan families sell 17% of firm to employees.
Launches drive to develop high-value-added foods | |
