First of all, on behalf of Think Grain Think Feed, we would like to welcome you to India as you join the new assignment. Though it has been just a few months that you are here, however, we would be pleased to know your thoughts on the Indian feed market compared to developed markets? What would be Cargill’s growth priority for India vis-à-vis Asia?
Imre Havasi: Thank you for the opportunity to talk to you and your readers. I am very excited about the opportunity to work in this great country. Cargill has been present in the Indian complete feed market for almost two decades, and the roots of companies Cargill has acquired in India go back much longer.
The Indian feed market, as you know, has advanced tremendously in parts but as a whole it is still full of opportunities. The entrepreneurial spirit is alive and well in this industry and the organized segment of the market continues to grow. There are many good companies in the value chain as well as individual producers who have adopted or seek to adopt new technologies, continuously improve their processes and aspire to be world-class. There is a strong presence of both domestic and multinational companies that has had a very positive impact on Indian livestock industry.
Some of the key opportunities to improve further are livestock farming and feeding practices, quality of the end-product, such as milk, and supply chain efficiencies. Cargill sees India, as well as the rest of Asia, as a growth market in complete feed, premixes and additives. We are committed to the continent and will continue to look for good growth and investment projects.
The prime focus of Animal nutrition industry is efficiency while the world is moving towards sustainable and safe food production. Please share your thoughts on the same.
Imre Havasi: Yes, while the industry has historically focused on least-cost formulation, this is no longer the primary factor in how farmers feed animals. Today, producers want feed that is cost effective and meets consumer expectations and their own principles. Food and feed safety have always been important but have gained even more momentum recently due to consumer awareness, government regulations and, unfortunately, due to recent outbreaks of disease, primarily in Asia. Sustainability and well-being are also rising in importance, alongside well-being.
As feed and nutrition companies, we must develop and offer solutions that satisfy all of these expectations—as well as producers’ needs for success. That’s why our long-term strategy aims to deliver performance and the well-being and sustainability as the most important benefits for our customers and consumers, since these are interconnected. Healthier animals mature and reproduce more successfully, use feed more efficiently (for growth rather than fighting disease) and require fewer antibiotics, which result in improved food safety and minimize waste.
Have there been any recent innovations by Cargill and its group companies, coming from the company’s animal nutrition division, that you would like to share with our readers?
Imre Havasi: We continue to launch new products, notably additives, with a focus on toxin binders and gut health. The Diamond V portfolio will enhance these offerings significantly. I would also like to highlight the new and improved digital products and services we’re developing for our customers. These range from formulation software to digital farm management. As discussed earlier, we want to drive productivity, animal well-being and sustainability improvements through knowledge and technology-based solutions. Cargill’s understanding of ingredients (digestible coefficients for different species, for different life stages) and their application to animal feed, using advanced formulation tools can help formulate feed more precisely, producing better overall outcomes along with lesser feed wastage. We are also promoting business modelling tools like TechBroFlexTM for next-generation productivity improvements. This tool can simulate farm output considering key operational parameters: feed formulation, feed costs, bird density, days for a broiler cycle, downtime, etc. Most of these variables are related to each other in a non-linear way. It’s difficult for a farm manager to do these simulations intuitively. We are also in discussions with a few leading customers to pilot Enteligen, CAN’s proprietary digital solution for farm management. We see significant scope for productivity gains through farm data analytics and real-time interventions.
As predicted by your predecessor Robert Schubert, India is supposed to be the 5th largest feed manufacturer in the world, please share how important is that market from feed additive point of view?
Imre Havasi: Very important. We expect the feed additives market in India to exceed the global growth rate for premixes and complete feed. This is due to higher adoption, innovative new product offerings and changing trends toward more prevention versus treatment.
2018 has seen a lot of M&A and also collaborations like Cargill collaboration with Delacon, Diamond V etc. Could you please share your thoughts on this trend for 2019 and beyond.
Cargill Animal Nutrition is a growth company which means we continue to invest both in organic growth and mergers and acquisitions. We are very fortunate that within Cargill, the animal nutrition business is viewed as a key pillar and an important part of the portfolio. We remain very interested in exploring investment opportunities in health technologies, digital products and services, and even in parts of the value chain where we don’t play today. We are very keen to find projects in Asia, and India is high on our list.
Cargill has recently announced about the new premix and supplement production facility coming up in Rajasthan that will cater to Northern India. Please share some details about this new project.
Imre Havasi: It is our intent to expand our asset footprint in India and we believe Rajasthan offers us a great opportunity to do that. A good combination of raw material availability, existing infrastructure, skilled workforce and access to markets make it an attractive proposition to set up a new production facility there. I look forward to having more details to share as we refine the specifics of this project.
Agriculture is one of the least digitalized major industries. How do you see digitalization impacting the livestock industry? Also, share your observations if you have seen any such organizations adopting this new kind of innovation.
Imre Havasi: In short, the opportunity is huge, and the moment is now. Agriculture is one of the last industries to go digital and the value creation potential is significant. The key ingredients are starting to fall in place: connectivity is more and more available; the willingness to adopt is increasing; and the industry is starting to get the attention of technology firms, individuals and venture capital. There are many start-ups and a lot of “experimenting” is going on—here in India as well—to find the right solutions at the right price points. Today, we have a lot of different solutions but still very little integration. This will come over time. Cargill continues to invest in digitalizing our operations as well as in solutions for our customers. An example of possible application is in the dairy space. We are limited in our ability to cover the market and provide information to dairy farmers due to the large and fragmented nature of the market. Digitalization in the value chain can help integrate information, so that farmers can make more informed decisions and improve the success of their operations.
We would also like to congratulate Robert for getting back to the US after serving the Indian Feed industry for quite some time. Will you please share the challenges and opportunities of the Indian animal industry that you have observed during your tenure?
Robert Schubert: I thoroughly enjoyed my time in India learning about the animal nutrition industry and interacting with customers all across India. The case for growth and expansion of the Indian feed market is as exciting today as it has ever been. The growing demand for all animal proteins (milk, broiler meat, eggs, and fish/shrimp), the increasing size in purchasing power of the middle class, and the improved organization of the dairy feed market are all sizeable opportunities for the Indian feed market through 2025. Even adding the ability to connect data from production source to consumer across the value chain with digitalization is a prospect that would increase our industry’s position as a provider of safe, wholesome, and sustainable food for a growing world population.
The challenges to our industry are fragmented markets, which limit the ability to engage large numbers of farmers and producers; biosecurity and farm infrastructure, which curb the genetic potential of animals; and the challenge of finding supply of quality, consistent raw materials that deliver the key nutrients for feed production.
Would you also like to share a piece of advice for your successor who is now taking over the charge of Cargill Animal Nutrition business?
Robert Schubert: My advice to Imre is quite simple: Focus on developing our Cargill teammates who can take the immense local knowledge of animal and food production practices in India and build on it with broader exposure to global best practices. The formula for winning in India is a combination of these two areas: “’Practical industry knowledge “ and the “Local talent delivering solutions”, that improve the performance and sustainability of our food supply chains in India.