Print   Close

Operating on the Low End of Risk Spectrum

Marcel Smits     January 21, 2021

The pandemic has upended all aspects of our lives and spared no business; every sector has had to adapt to remain afloat. In this rapidly changing environment, business continuity has been critical and organisations have had to quickly build resilience to tackle distressed situations. No one was prepared for the all-permeating impacts of the coronavirus. What this pandemic has taught us is that organisations need to lead with their values, protect their people, be customer-centric and focus on business continuity to overcome any significant crisis. As a business leader, my response to this pandemic is based on established culture and values, which have steered us through our 155-year history and will continue to guide us in a post-Covid world.

People-first Decisions

Our core values - do the right thing, put people first, and reach higher - serve as Cargill's North Star as we navigate Covid-19. When we use these values to guide our decisions, it allows us to move quicker, with more agility and consistency around the world. Our experience in dealing with crises and issues, from world wars to hurricanes, typhoons and other natural disasters, has helped us effectively address the impact of the coronavirus on our people, our customers, our suppliers and communities where we operate.

For us, putting people ahead of profit is sine qua non and is deeply embedded in our culture. It is both empowering and enabling. When faced with the pandemic, there was little ambiguity that important decisions would need to be taken without worrying about budgets. Whatever was required for our people, got done. We closed facilities if we could not operate them safely.

We moved fast, were early in getting tests and acquiring PPE kits to protect our people, which allowed us to manage the inevitable outbreaks. We took every precaution to keep our people safe at our production facilities and leaned on the counsel of medical experts in helping us prioritise health and well-being. Our presence in 70 countries enabled us to learn from countries hit early by the virus and allowed us to adopt best-operating practices as the world learned about dealing with the pandemic, including adding mental health support for employees. Our commitment to our employees is now stronger than ever. A people-first strategy and staying true to our corporate values helped Cargill navigate the crisis collectively as an organisation, with 155,000 employees completing the essential work of producing and moving food to family tables around the world during a global pandemic.

Customer Centricity

We learned to be more agile by putting our customers at the centre of our operations and decision-making.

We adopted new ways of working to help our customers navigate and succeed in this new marketplace. We reaped dividend from (re)organising our functions into global delivery organisations rather than fragmented smaller organisation blocks. By being always on and maintaining open lines of communication across our company and with our customers, we were able to quickly address supply chain interruptions. This was critical because our customers depended on the resilience and agility of Cargill's diversified portfolio and the resilience of our employees, farmers, customers, and frontline workers.

Any talk of the food system without talking about agriculture is incomplete. We knew for our customers to successfully navigate a pandemic, we needed to maintain the whole system - from the farm level to the infrastructure that enables food - to move freely around the world. We assisted customers in finding alternative options when they faced supply restrictions. In China, for example, we helped the largest hog and yellow chicken producer identify transportation and sourcing options to get enough soybean meal to their herds. In The Philippines, a chocolate drink plant idled because of lack of access to cocoa powder. Cargill delivered the cocoa powder in special packaging to allow the business to reopen. We can only do this with the help of governments who keep borders open and allow food to move from where it is produced to where it is needed. By designating food as essential, governments across APAC enabled this agility and kept the food system viable for producers and consumers.

Innovation To Unlock Growth

APAC is an important region for Cargill because that is where the world's largest populations live and where companies have the greatest growth opportunities. Despite Covid-19, we understood that Asia's food supply chain is resilient, allowing us to focus on innovation and growth in the region.

As a food company, we are committed to creating healthy, nutritious, and safe products for our customers and consumers. Through innovation and virtual engagements, we were able to launch new products during Covid-19. In April 2020, Cargill introduced a new plant-based protein brand PlantEver? with KFC for consumers in China to provide our customers new food options. We also helped our customers find e-commerce routes to wider markets, bringing products to Alibaba and through Facebook in The Philippines and Thailand. Cargill's PrimeWaters is now the top seafood brand on Amazon Marketplace, with 4x lift during Covid-19. These innovations had twin benefits: they helped many of our customers not only survive but grow, and allowed us to enter new markets in the Asia-Pacific.

Focusing on our animal nutrition customers, we brought innovation forward that focused on farm productivity and animal welfare. In The Philippines, we launched Cargill 360 Protection, a holistic approach to protect swine farms from African Swine Fever (ASF), as well as strengthen the immunity of the herd by focusing on farm biosecurity. Over 286,000 farmers in the region joined live webcasts during the pandemic to learn about swine nutrition and biosecurity practices. Through our supply chain and manufacturing process efficiency, and managing commodity price risk, we are helping our customers pare costs, which is critical for their financial success during the pandemic.

For an organisation as large and diverse as Cargill, this speed of innovation and go-to market was unprecedented. We have innovation centres in China and Singapore and continue to invest in expanding our R&D efforts with another centre in India soon.

Leveraging Resources

India features significantly on Cargill's growth map in Asia. We expanded the bio-industrial business in India in July 2020 by setting up a plant that will locally produce bypass fats to serve dairy farmers. In June 2020 we partnered with a local manufacturer to launch our first chocolate manufacturing operation in Asia. The Cargill business services centres in India leveraged Cargill's scale to create an efficient, modern way of providing high-quality shared services from finance to human resources to Cargill. With a focus on increasing operational efficiency, improving compliance and controls, and delivering insights through planning and analytics, they helped drive competitive advantage.

Prioritising Stability

The spread of this pandemic magnified the intersection between environment sustainability and human health. The seismic changes brought on by Covid-19 have consumers everywhere rooting for sustainable products and services. They are dismissing plastic, demanding transparency, and choosing vegan - all challenges that can be addressed by innovation in the global agriculture and food sector.

We continue to progress our science-based climate commitment with a new agriculture initiative to benefit long-term profitability and resiliency of farmers. We recently launched a sustainable hand cream without the use of hydroalcoholic lotions, for South Asia, France, and Chinese markets. We have advanced our work to reduce carbon emissions across livestock supply chains, agricultural farming and ocean transportation. And we launched sustainable protein programmes with Burger King, McDonald's, and Walmart - all during Covid-19.

Volatility from global issues is the new normal. So, we need to be more agile and focused than ever before. The good news is that the food system remained viable during the pandemic and proved that farmers, agriculture and food production are resilient. Supply chain disruptions are now a much smaller risk. We have been operating on the low end of the risk spectrum in our trading business and will continue this risk-off mode.

The pandemic will not last forever. It will eventually be tamed by vaccines - many are on the horizon. That is the silver lining for the world that has been ravaged by this virus. If there is one thing the recent events have shown, it is that status quo cannot be taken for granted. For the next 50 years at least, there will be people who know what it was like. And we will all be better prepared.

(The author is Chairman, Cargill Asia-Pacific and Head of Corporate Strategy)


URL for this article :
https://www.businesstoday.in/magazine/cover-story/operating-on-the-low-end-of-risk-spectrum/story/428579.html
 
@ Copyright 2019 India Today Group.