With better economies of scale in mind, Cargill Feed and Nutrition Thailand plans to follow up its recent purchase of a livestock feed mill in Prachinburi by building a new feed mill in Petchaburi.
Watcharapong Poomongkutchai, country director, said the acquisition and new project are strategically important for overcoming production constraints that prevent the company from achieving greater market penetration and better serving its customers.
Higher production volume increases purchasing power to manage prices, while at the same time enabling Cargill to win new customers in the eastern provinces and the northeast of Thailand. Cargill’s customers in those areas will see substantial trucking cost savings, Mr Watcharapong added.
The newly acquired feed mill in Prachinburi province, which was formerly a joint venture between Sri Thai Foods and Beverages Co Ltd and Thai-Denmark Swine Breeding Co Ltd, produces both swine and poultry feed.
Plant renovation and equipment retrofitting was completed in Q1, 2018 with an initial capacity of 8,000 tonnes/month.
Cargill is also preparing to begin building a new feed mill in Petchaburi province with 20,000 tonnes/month capacity. The new plant, slated for completion by early 2020, will level the playing eld for Cargill and make it more competitive in terms of feed cost, volume and new customer development.
Mr Watcharapong believes that the trend towards vertical integration in the livestock industry will lead to the disappearance of medium and small-scale producers.
Cargill firmly believes that technological prowess and the ability to embrace change are the keys to success.
Through its account executive program, Cargill and customers work together to identify gaps and opportunities. Cargill staff and third-party experts help customers achieve their goals by providing assistance with issues such as nutrition, animal health, human resource planning and more.
Despite the current downturn, hog producers who run a tight ship and have been pro-active by investing in downstream businesses are not being hit as hard. Mr Watcharapong believes that the strongest and most competent operators will be better prepared to pro t when prices rebound.
To avoid the hog market’s peaks and valleys, Cargill urges its customers to create pork value chains and supports their efforts to undertake market studies and prepare business plans.
That support has helped many businesses avoid failure amid a serious market slump, he added.
Cargill, which touts itself as a “knowledge-based” organization, shares their know-how and experience gained from running a global operation with its customers, who benefit from the company’s superior feed safety, nutrition and supply chain management.
Cargill’s strategy combines organic growth and acquisitions. In 2013, it bought shrimp feed manufacturer Siamakme Aquatic Feeds Co Ltd, a move that facilitated business growth and technology exchange in the shrimp feed business.
Also, Cargill’s acquisitions at the global level have contributed to cross-pollination of ideas and innovations between regions which have ultimately resulted in improved customer pro fits, he said.
In Thailand, Cargill Feed and Nutrition supplies around 400,000 tonnes/year from four livestock feed mills and one aqua feed facility. It is one of the country’s key suppliers, with a product range that includes hog and broiler feed, as well as layer, pullet, broiler breeder and meat-type duck feed.
Cargill Nutrition Thailand continuously strives for performance improvements. Its energy consumption target reduction is set at 3-5% per annum and the company is guided by the international giant’s global performance improvement program.
All Cargill feed mills in Thailand are HACCP certified. The company’s feed mills operate on par with their counterparts in the United States, and have been recognized for high standards three times in the last eight years with the “Cargill Business Excellence Award,” which uses the same criteria as the Malcolm Balridge National Quality Award.
Intermediate goals are to sustain growth at 10-20% per annum, create a safe work place, produce wholesome feed and improve staff performance through employee engagement.
Cargill management works hard to ensure that employees are satis ed and enthusiastically committed to their job for the success of the entire organization, and the company contributes 1% of its net profits back into local communities through CSR and farmer training programs.