Cargill reorganizes animal nutrition business

Cargill Inc. is reorganizing its animal nutrition business and will create a new business unit focused on animal and human health products.

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New business unit will focus on animal and human health products

Cargill Inc. is reorganizing its animal nutrition business and will create a new business unit focused on animal and human health products.

The company’s new Animal Nutrition and Health group will consist of three units: Cargill Animal Nutrition, combining its existing feed, nutrition and pre-mix businesses; the existing Cargill Aqua Nutrition; and the new Cargill Health Technologies, which will focus on digestive health in immunology for animals and incorporate relatively new acquisitions Delacon and Diamond V.

“The animal protein market is evolving and consumer focus on animal health and well-being is becoming increasingly important,” David Webster, head of Cargill Animal Nutrition and Health, said in a statement. “It’s a key area for growth, and we intend to better serve customers in this rapidly evolving market.

“By elevating Cargill Health Technologies into a standalone business and adding health to our name, we will be able more rigorously focus on innovation and create products that push performance and enhance animal, and human, health,” Webster said.

Chuck Warta, president of Cargill’s animal nutrition and premix business, will lead the new unit. Adriano Marcon, president and group leader for Cargill’s global aquaculture business, will lead Cargill Animal Nutrition. Pilar Cruz, president of its compound feed business, will lead Cargill Aqua Nutrition.

The changes are likely to result in a “workforce impact,” a Cargill spokesman told Feed Strategy in an email.

“As a smart business looking to lay the foundation for some pretty strong growth, we are also looking for ways to run our business more efficiently and remove complexity from our system,” the spokesman said. “As a result of that focus, and also because we are combining two businesses (premix and feed) into one, we expect that there will likely be a workforce impact as we implement the changes. However, while there may be reductions in some areas, there also will be growth and opportunity within the new health technologies business especially. At the end of the day, this is about continuing to deliver double-digit growth.”

Structural changes are set to begin October 1.

First quarter financial results

Cargill reported a “solid start” to its fiscal year 2020 in its earnings report on September 26, with first quarter revenues up 1% from the same period a year ago to US$29 billion. The company reported in July that revenues were down in the fourth quarter and full year of fiscal 2019.

“Our year started on a good note as we continued to help our customers navigate an unpredictable business environment,” said Dave MacLennan, Cargill’s chairman and CEO. “Right now, we are focused on modernizing all aspects of our operations so we can effectively and efficiently provide our customers with solutions they value everywhere they do business.”

Adjusted operating earnings rose in two of Cargill’s four business segments: Animal Nutrition & Protein, and Industrial & Financial Services. They decreased in Origination & Processing and Food Ingredients & Applications.

The global protein business performed the best, with strong results in North America. Poultry performance was also good in China, Thailand, the U.K. and Latin America.

The global compound feed business overcame pressure from African swine fever, and aquafeed also saw healthy results.

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