Cargill faces future with a new face

Peter Bohan

Minn: For students of Cargill Inc., the world's most powerful agribusiness and commodity trading group, the change in leadership now taking place might seem like business as usual.

But there's not much that's "usual" about Cargill, a 142-year-old private company that, if publicly held, would rank among the top 20 corporations in Fortune 500 list.

A behemoth in world commodity, food and energy markets, Cargill is in the midst of a transformation remarkable for an enterprise its size 153,000 employees in 66 countries.

"In Cargill's strategy I would hope to get across to people there is a degree of change that everyone has to prepare for and there's a degree of constancy," Cargill's president and chief operating officer, Gregory Page, told Reuters in an interview this week, two weeks before he succeeds Warren Staley on June 1 as the eighth chief executive of the fabled firm.

"Both our customers and employees want that. They want constancy around our commitment to reinvesting, our commitment to doing business reliably and ethically," Page said.

Page, 55, grew up in a North Dakota town, graduated from a state college and joined Cargill in 1974, planning to work a few years before returning home to run his father's farm-supply business.

A funny thing happened on the way to the farm. Instead, he graduated from Cargill Inc. Page ended up running Cargill's livestock feed business for Asia from Singapore at age 34. He then took over Cargill's big global meatpacking arm, EXCEL, in 1992, and he joined Cargill's inner circle on the board of directors in 2000.

Cargill at the time was licking its wounds from financial losses tied to Asian and Russian economic crises. Its corporate psyche "Tons R Us" as one executive called it, based on moving millions of tons of grain and other material through the food system was tied to high-volume, low-margin sales.

But Page, with CEO Warren Staley and old hands like Vice Chairman Bob Lumpkins, drove efforts to reinvent the company into a more user-friendly, customer-focused enterprise which has expanded up the food chain.

"If you asked a Cargill person 10 years ago what they did at Cargill, they would describe the product they made," Page said. "'I'm in flour' or they make corn sweetener.

Today, most of them would answer, 'I solve problems for bakers,' or 'I help beverage people.'"

That shift in mind-set is a sea change. Cargill, born and bred in an industry of secrecy where a whisper might affect the profit on thousands of tons of grain or iron ore has had nondisclosure built into its DNA for decades.

So it is remarkable to see Cargill now advertising on network television about its mission to "serve customers" and illustrate the ways it acts as a model corporate citizen.

Was it only the 1930s when Cargill was expelled from the Chicago Board of Trade, accused of trying to corner the corn market? Or attacked in the 1970s for sales of millions of tons of U.S. grain to Russia, affecting U.S. food prices?

That seems a long time ago in Page's world, which revolves around creating a dozen new sales opportunities where only one - the raw commodity - might have existed before.

Instead of providing just wheat flour for bread, what about vitamin nutrients? Bio-based packaging? Healthier vegoils?

"We have ... built out our capacity to innovate in food and ag and that's one of our stated strategic intents. Now we need to make that more real to get people to think about us differently - not just as a supplier of flour and vegetable oils but as a food solutionist," Page said. Page said Cargill also has more than 1,000 scientists now working on products and services from healthy food ingredients to water recycling to crop-based plastics.

"You have to introduce new products, new ideas, new packaging concepts our new strategic intent calls on Cargill to deliver the best ideas. So the thought of Cargill as an idea merchant is something we have to get to permeate with our employees," Page said.

Strategic intent. That is the label for Cargill's periodic master plans. The latest was done last October, mapping out targets and strategies reaching out through 2015.

(Reuters)

(Additional reporting by Christine Stebbins in Wayzata, Minn.)