Cargill India Pvt Ltd, a unit of the privately-held US-based global food company Cargill, plans to build a business model “ultimately” with its digital platform “Digital Saathi” by going national over the next five years, says the company’s top official.
Digital Saathi was launched on a small scale 7-8 months ago. We kicked off the platform to make our entry into the digital platform and see how farmers respond. We wanted to see how the platform could help small farmers in small areas in terms of access to knowledge and information on the market, ”said Simon George, President, Cargill India.
The company is not looking at making money from the digital platform now as it is “definitely looking at aligning with the government initiative to improve farmers’ income,” he told BusinessLine in an online interview.
Limited menu, big tool
The digital platform will cover a lot of aspects in the coming years. “We started with a limited menu and are increasing it every day. It will be a big tool that can help the farmer to make the right choices, ”the Cargill India chief said.
Currently, 30,000 farmers are connected to the platform, and a “big step has been achieved by launching operations on it”. “At the end of the day, we are looking at a large number of farmers and its expansion,” he said.
Currently, Cargill’s electronic platform or app is working “specifically” in the Karnataka market, predominantly in the Davanagere, Haveri, and Mysuru areas. “We started with one crop — corn (maize) —and will be expanding it to three soon. We launched the platform with maize for our comfort, ”George said.
The US food major’s Indian arm has a modernized corn milling plant at Davanagere, while its operations are in Mysuru. “Both combined make sense to give value to our customers. We will be launching a few more agri-products. Our team is finalizing them and our ultimate goal is to go national, ”he said.
The time of the platform going national and the aspects that will make the platform part of a five-year plan, the Cargill India chief said. But “it is a pleasure to see how farmers are embracing the change and the glee in their faces” since they can decide what they want to do.
Asked if farmers have become comfortable handling smartphones, George said, “From a high altitude view, we see how companies like Jio have moved into rural areas. India is the fastest-growing smartphone market in the world, with another 500-600 million people shifting to these phones in the next couple of years. But is everyone comfortable? I do not believe so. ”
Dwelling on the features of the digital platform, he said one of them is “Agri Doctor,” which helps farmers tackle crop damage very early if a photo of the plant is loaded onto the app. “Within a matter of a few hours, farmers will be informed about the problem and a remedy will be suggested. It helps farmers to correct quickly and thus increase the yield, ”George said.
Cargill planned to add more such features and move forward from the 45–50 per cent of active users currently on the platform. The company believes that soon everyone will be taking an active interest as the app will provide details on weather, inputs, and diseases.
“We will advise farmers on what to sow, when, and what fertilizer and pesticide to use. For fertilizer and pesticides, we will only give the chemical name and then provide them with the choices to use. It will be a much deeper education of the farmer than now, ”he said.
Food innovation center
Earlier this year, Cargill India opened a food innovation center at Gurugram, Haryana, adjoining New Delhi, and it is one of the best state-of-the-art innovation labs in the country. “We will bring the entire breadth and breadth of Cargill food ingredients to the lab and work in such a way to come up with an innovative product,” Georg said.
The product could be a low-fat, low-sugar biscuit by bringing all these ingredients from its edible oils and fats, starch and sweeteners, cocoa and chocolate, and specialty business to one table. The customer will get a health and wellness solution.
Cargill could also be looking at immunity booster products through special ingredients derived from all or some of the businesses. “We will have everything for a consumer to become a one-point solution. We could become one of the most innovative organizations in India, ”he said.
Cargill has acquired an edible oil refinery in Andhra Pradesh to enhance its supply chain in southern India’s edible oil business. It plans to invest $ 35 million to expand it.
Cocoa, chocolate products ready
The company is the largest player in the starches and sweeteners business in South India and is among the top three in the country. Cargill India’s growth depends on expansion, and it plans to expand its starch and sweetener business to the western parts by year-end and to the northern parts by the end of 2023.
In the cocoa and chocolate business, it is working with local processors to create its own formulations, which are almost ready. Over the next few months, it will roll out its products for the bakery and confectionery industries.
“We launched our project for this business last July. It is now in the final stages of trials. We will launch our products in the next couple of months specifically for bakeries and confectioneries as a business-to-business player, ”the Cargill India chief said.
On the volatility in prices of foodgrains and edible oils and their impact on Cargill, George said the Covid pandemic, the geopolitical situation, and the shifting of food commodities for biodiesel had come at one point in time, resulting in the external environment creating supply and demand issues.
The US major has done “pretty well” in the edible oil business with a rise in household consumption and consumers shifting to branded products besides home-cooked food. These have helped the overall edible oil business, with the company having a pipeline of consumer wellness products.
George said the animal nutrition business was one of the critical pillars of Cargill India, with volatility in grain prices affecting producers economically. The firm has large manufacturing facilities for animal nutrition in Bathinda in Punjab, Sonepat in Haryana, Bengaluru in Karnataka and Andhra Pradesh, and it has brought innovative products to improve animal health and welfare.
In view of the dairy industry being buoyant this year, it has done well on that front, while it expects the poultry sector, recovering from bird flu, Covid fallout, and avian flu, to rebound in the next 3-6 months.
Renewable energy initiative
Cargill uses 70 per cent renewable energy, tapping solar power at its Davanagere corn plant by producing 20 Mw of power. Over the next few months, the capacity will be increased to 24–25 Mw and 90 per cent of the plants’ energy will be met through renewable energy.
“We plan to extend the renewable energy initiative across the country. In Maharashtra, 45 per cent of our edible oil facilities have shifted to solar power. Our Gujarat plant will start tapping solar power over the next few months and by 2025 will shift to 30 per cent renewable energy, “the Cargill India chief said.
Despite the Covid impact across the globe during 2020 and 2021, Cargill has performed well, with its income rising by 17 per cent in 2020–21 (June – May). “The numbers are yet to come for the last quarter of 2021-22, but they look better than last year,” he said.
George said India contributes “slightly over” two per cent of Cargill’s global revenue, but the subcontinent will have a major role to play by 2030, when India is set to become a strategic nation. “A lot of planning is going to grow faster in India,” he said.
May 31, 2022