Cargill, one of the “four major grain merchants” in the world, has changed its leader!
Xiaoshidai noticed that the company announced on Monday that Brian Sikes, the current chief operating officer, will take over the post of CEO in early 2023. Cargill’s current CEO, David MacLennan, will take over as Executive Chairman of Cargill’s Board of Directors on January 1. At that time, Mai Weide, 63, will realize early retirement, and the company’s usual retirement age is 65.
According to the announcement, Sikes, now 54, is a “veteran” who has worked for Cargill for 31 years. After taking over McVader, he will become the 10th CEO of Cargill in its 157 year history. It is worth mentioning that this high-level personnel change comes at a time when Cargill’s annual income has reached a record high.
Cargill’s new global CEO Brian Sikes
Now, let’s pay attention to it.
As one of the largest food suppliers in the world, the size of this low-key upstream enterprise may exceed many people’s imagination.
According to official data, this Minnesota based company was founded in 1865. It is a diversified multinational enterprise group integrating food, agriculture, financial and industrial products and services. Its business covers 70 countries and regions around the world, with more than 150000 employees, and it is the supplier of some of the world’s largest consumer brands and chain restaurants.
In the Chinese market, Cargill’s business covers grain and oilseed value chain, animal nutrition, animal protein, food ingredients and applications, special ingredients and nutrition, finance and risk management, logistics and commercial trade. For example, in the field of food and meat, Cargill China is a supplier of KFC and McDonald’s.
According to the latest 2022 annual report, the revenue of Cargill in this fiscal year (i.e., from June 1, 2021 to May 31, 2022) reached a record high, with a year-on-year growth of 23% to 165 billion US dollars (currently equivalent to 1181.1 billion yuan). That is to say, from the perspective of annual revenue volume, one Jiajiyomo is equal to two Tencent.
Behind the high growth of Cargill and other global agricultural trade businesses, it mainly benefited from rising commodity prices, tightening global crop supply and strong consumer demand. “Cargill has a solid foundation, business model and culture that enable us to achieve long-term success,” the company said.
In addition to the revenue scale, the company’s profitability is also very considerable. Xiaoshidai noticed that Bloomberg recently pointed out that McVader promoted the transformation of this 157 year old agricultural product trader into a protein giant, and created record profits for two consecutive years.
“The supply chain disruption caused by the epidemic and the conflict between Russia and Ukraine triggered unprecedented fluctuations in the entire agricultural market. Cargill announced a profit of 6.68 billion US dollars in the last fiscal year (as of the end of May this year), breaking the historical record of the previous year.” The report said that the rise in crude oil also pushed up the prices of palm oil, sunflower seed oil and soybean oil, and improved Cargill’s profit margin.
This is also before the official shift
“Therefore, part of our management team’s work is to have a more focused business portfolio and develop business where the company can win. Cargill’s current business portfolio is agriculture, food and agricultural bio industrial products. I hope to balance the proportion of the company’s food business and develop more bio industrial products,” he said.
Cargill’s current global CEO David MacLennan
Bloomberg recently commented that McVader’s contribution is to transform Cargill, the “C” (the initial letter of Cargill, referring to Cargill) among the four global crop traders of “ABCD”, into a meat giant, turning the company into a business with high profit margins. Meanwhile, its main competitors, including ADM, Bunge Ltd. and Louis Dreyfus Co., are still trying to make money through food trade. “His strategic success has made Cargill one of the largest beef processing enterprises in the United States.”
In recent years, Cargill’s layout in the Chinese market is also consistent with the overall strategic direction. For example, Xiaoshidai noticed that in the biological industry, in December 2021, Cargill announced that it would invest 50 million yuan to build the FR3 in Yangjiang, Guangdong ® The natural ester production base was officially put into operation. FR3 ® Natural ester is a widely used high-performance transformer insulating fluid, which is more safe, reliable and environmentally friendly than mineral insulating oil. The production of the base is described as “a new milestone for Cargill Bio Industry in China”.
When talking about how to judge the correctness of the strategic direction, Mai Weide believed that profit was the simplest measure, and whether the company was looking for suitable investment opportunities globally and attracting world-class talents. “These are signals that indicate whether the strategy is correct or not. In addition, we must always check the company’s strategy. It cannot be said that this is the company’s strategy. Put it away and look at it again in ten years.”
Investment in China during his tenure
As the CEO of Cargill for a long time, McVader also has a deep relationship with the Chinese market, and during his tenure, he promoted many major investments of Cargill in the Chinese market.
For example, Xiaoshidai noticed that Cargill ONE, a Chinese market innovation center, was established in Shanghai in 2016 according to previous media reports. In 2017, Cargill opened a new oilseed crushing plant in Huanghua Port, Hebei Province. In 2018, Cargill invested hundreds of millions of dollars to expand its starch and starch sugar, animal protein and agricultural supply chain business capacity in China.
In March 2019, Cargill announced that it would invest 40 million dollars in the feed premix project in Yichun, Jiangxi Province. In April of the same year, Cargill announced that it would invest 750 million yuan (about US $112 million) in Songyuan, Jilin Province, to expand the capacity of its large-scale single corn deep processing plant that has operated for many years in the local area. At the same time, Cargill announced that the foundation was laid by the Cargill Food Safety and Technology Center relying on the industrial park.
“In the past seven years, Cargill’s investment in China has doubled. Cargill has all its important businesses in China. Cargill is willing to work with all parties as a partner
Cargill said that his unremitting attention to people and culture, customers and mature ability to lead growth and transformation have won him the trust and respect of Cargill customers, employees and the Board of Directors.
“As Cargill continues to navigate the dynamic global market, the company’s success will be determined by its excellent operation and clear vision driven by goals and values. No one is more suitable to steer Cargill than Brian.” Mai Weide said, “He is a doer who is enthusiastic about serving our customers and employees. Brian has the qualities we value as a strong leader – integrity, empathy, tenacity and authenticity. Under his leadership, I believe Cargill will usher in the best days and create the greatest contribution.”
According to the announcement, in order to ensure a smooth transition from shift to shift, during the “new role” of McVader as Executive Chairman of the Board of Directors, he will serve as the strategic adviser of Sikes and support Cargill’s long-term strategic plan.
Although it is not clear what the new manager thinks about Cargill’s business in China, Xiaoshidai noticed that the new manager who will take charge of Cargill has another title: a member of the board of directors of the U.S. China Business Council. In the future, this agricultural giant is expected to play an important role in Sino US trade.
At present, in the Chinese market, Cargill is continuing to diversify its business and increase its exposure to emerging market segments.
For example, this traditional meat giant also needs to “bite” the plant meat that has become more and more popular in recent years. In 2019, Cargill launched a new plant protein product Radipure developed and produced in China. It is reported that Radipure is environmentally sustainable, hypoallergenic, non GMO and can be used in dairy products, ready to drink drinks, baked goods, artificial meat and other fields.
In April 2020, KFC launched its first fried chicken product with plant meat in China, and the supplier behind it is Cargill. In July 2020, Cargill China’s plant meat brand “Zhiqi” joined hands with Rosen to launch two new types of plant meat products, namely seafood flavor sandwich and chicken flavor rolls.
“We need to put all the protein choices on the table,” Sikes, who was then the head of Cargill’s global protein and salt business, said in a circular released in 2020, “whether you eat meat substitutes or animal protein, Cargill will be at the center of the plate (first in position C).”
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Cargill, an international grain trader, has recently finalized the 10th CEO. He not only has a meat background, but also focuses on US China trade
虽然暂不清楚新帅对于嘉吉中国业务有何最新想法，但小食代留意到，这位即将执掌嘉吉的新帅身上还有一个头衔：美中贸全国委员会（U.S.-China Business Council）的董事会成员。未来，预计这家农业巨头还将在中美贸易中扮演着重要角色。