Cargill
Cargill highlighted its key achievements in the company's 2016 annual report. 
 

MINNEAPOLIS — Two of Cargill’s top executives in the company’s 2016 annual report issued Aug. 16 admitted the company has not yet achieved the consistent earnings growth it wants, but even so, where changes have been made Cargill has realized positive results.

David
David MacLennan, chairman and CEO of Cargill 

“We are transforming Cargill to be more agile, with capabilities essential to our customers’ success,” David MacLennan, chairman and CEO, and Marcel Smits, executive vice president and CFO, wrote in “Envisioning Tomorrow,” the company’s annual report. “We are leading the advance toward a more sustainable food system that nourishes people and protects the planet.”

Cargill stated its acquisition of a case-ready ground beef plant, opening a new beef distribution center, and adding capacity in cooked meats and specialty protein products. 

 Jollibee
Cargill partnered with Jollibee Foods Asia's largest foodservice company in 2016. 
 

The report mentioned some growth in the poultry sector. Cargill partnered with Jollibee Foods, an Asian foodservice company, to build supply chain for specialty poultry products in the Philippines.

Cargill also said how its researchers are looking at the role essential oil can play in poultry to promote feed efficiency and keep birds healthier. The report stated that Cargill is finding certain essential oil compounds have a broad, positive effect on digestive health. 

In fiscal 2016, adjusted operating earnings were $1.64 billion, down 15 percent from fiscal 2015, but net earnings on a GAAP basis rose 50 percent to $2.38 billion. The variance between net earnings and adjusted operating earnings included gains on sales of businesses and other assets, asset impairment charges, and a LIFO inventory adjustment. Revenues for the fiscal year declined 11 percent to $107.2 billion, which reflected lower commodity prices, a strong US dollar and divestitures.

In the report, MacLennan and Smits said Cargill is in the process of transforming operations for growth. To that end, the company has simplified its leadership and organizational structure.

Marcel
Marcel Smits, Executive Vice President and CFO of Cargill 

“We replaced the former two-tiered leadership structure with a smaller executive team that represents Cargill’s major lines of business and key functions, and is responsible for strategic direction, portfolio management, capital allocation and talent development,” they said. “We initiated a cross-company move toward fewer, larger business groups to speed decision-making, increase accountability and take better advantage of Cargill’s global reach.”

The executives said Cargill has focused on “competitive excellence,” which has included everything from running plants and supply chains more efficiently to improving how the company delivers services to its businesses.

“With this leaner, more direct structure, we are better positioned to meet customers’ emerging needs,” MacLennan and Smits said.

 EWOL
One of Cargill's key moves in 2016 was acquiring EWOS, a leader in salmon nutrition. 
 

In the course of its transformation Cargill also said it has made significant changes to its portfolio, including acquiring businesses and investing capital to make the company more competitive in markets it hopes to lead.

Key moves in 2016 included the acquiring EWOS, a leader in salmon nutrition; acquiring a chocolate business that strengthened the company’s North American brands and capabilities; completing a new oilseed crush, refining and port complex in northeastern China; and forming a joint venture to build a grain export terminal in Ukraine on the Black Sea, which is well situated to serve destinations in the Middle East, North Africa and Asia.

“We sold businesses where we did not see a consistent path to growth, including pork processing and custom sauces in the US, as well as Cargill’s stake in North Star BlueScope Steel,” the executives said. “And we spun out Black River Asset Management into independent employee-owned firms. Totaling nearly $2.4 billion, these divestitures were the most significant in years.”

Cargill said it earned more than $425 million from innovation during fiscal 2016, primarily from new products and services in risk management and structured finance, animal nutrition and protein, and food ingredients and bioindustrials. The company also said it achieved more than $200 million in savings by increasing efficiency in its plants and supply chains.

For the full report, click here