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Nourishing Ideas Nourishing People

Nourishing Ideas Nourishing People. Cargill at a Glance. Cargill Founded 1865 Grain warehouse in Iowa. Core Capabilities Developed Risk Mgmt Supply Chain Mgmt Global Mgmt Core Value Established Trustworthy Creative Enterprising. TODAY $59 Billion+ in Gross Sales

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Nourishing Ideas Nourishing People

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  1. Nourishing Ideas Nourishing People

  2. Cargill at a Glance • Cargill Founded • 1865 • Grain warehouse in Iowa • Core Capabilities Developed • Risk Mgmt • Supply Chain Mgmt • Global Mgmt • Core Value Established • Trustworthy • Creative • Enterprising • TODAY • $59 Billion+ in Gross Sales • Over $1 Billion in Net Earnings • Net Worth >$9 Billion • 97,000 Employees in 1000 Locations • Core Behaviors • Customer Focused • Innovative • High Performing Integrated Food Products and Food Service Company

  3. Geographic Presence North America 37% of net worth 50,889 employees Europe/Africa 36% of net worth 15,763 employees Asia/Pacific 11% of net worth 15,186 employees Latin America 16% of net worth 15,123 employees

  4. Strengths of Cargill’s Businesses • Reputation for integrity • Financial soundness • Knowledge of the food system • Building for long-term success

  5. Culture & Behaviors • Ethics/Guiding Principles • Total Quality • Food Safety • Customer Oriented • High Performance • Innovation • Engaged and empowered work force • Customer/Consumer Insight • Community Involvement

  6. Changing Market Environment • Agri-food Industry faced with significant changes and challenges • Increasingly complex business environment; faster pace of change • Customers/competitors consolidating • Greater reliance on outsourcing/more sophisticated suppliers • Pressure to deliver top line growth through new product intros vs. product extensions • Shifting power to consumers (health, wellness, taste, convenience) • Margin pressures; over capacity

  7. Corporate Strategy Guidelines • Private ownership • Focus on agriculture and food • A+ credit rating • Operating managers • Grow our competencies • Maintain basic beliefs

  8. Year Four of a 10-Year Plan Strategic Action “By 2010, Cargill will be the recognized global leader in providing our agricultural and food customers with solutions that enable them to succeed in their businesses.” -Warren Staley memo, February, 1999

  9. Our Plan – Strategic Action • 10 year journey, long-term perspective, but short-term urgency • Internal education: explore, discover, create, deliver • Cross-organization collaboration and transparency • Restructuring and aggressive cost management • Re-focus our portfolio on Ag/Food (exit Rubber, buy Agribrands, form Food System Design)

  10. Corporate Business Unit Focus Employee Focus Collective

  11. Nutrition & Health Food Applications Existing Cargill Food Chains Supply Chain Management Three Areas of Strategic Activity Cargill will provide Food Chain Customer Solutions in the following areas: Customer Solutions Basic Nutrition Building Blocks These new areas of activity would need to be incorporated into Cargill’s existing businesses. Source: Cargill Strategic Intent Presentation, June 2000

  12. Energize Sport Drink with Trehalose Performance Breakfast Soy Signature Bar NUT-NOTSTM Innovative Solutions Women’s and Men’s Bread with AdvantaSoyTM

  13. Outback Steakhouse

  14. The world's first man-made fiber from 100% annually renewable resources. A fiber that not only touches your skin but also touches your soul.

  15. General Mills Focus on Our Strategic Accounts

  16. Success Story - Safety Cargill reached a safety milestone Cargill’s safety index measures the frequency and severity of work-related injuries based on the number of hours worked. It decreased to a record 1.7 in fiscal 2003.

  17. Supply Chain Management The Customer Satisfaction/ Efficiency Paradox March 2, 2004

  18. Grain Distribution Example New Product development Supply Chain Optimization Product Assurance End User/ Consumer Raw Material Logistics/ Storage Raw Material Input Raw Material Production Customer Manufacturing Processing Distribution Processes/Organization Technology Materials/Cash Information Risk Management • Grain originated from country • Transported through elevator system • Exported and distributed to the customer

  19. Grain Processing Example New Product development Supply Chain Optimization Product Assurance End User/ Consumer Raw Material Logistics/ Storage Raw Material Input Raw Material Production Customer Manufacturing Processing Distribution Processes/Organization Technology Materials/Cash Information Risk Management • Grain contract grown and originated from country • Transported through elevator system • Processed into food ingredient • Distributed to food manufacturer

  20. Fully Integrated Meat Example New Product development Supply Chain Optimization Product Assurance End User/ Consumer Raw Material Logistics/ Storage Raw Material Input Raw Material Production Customer Manufacturing Processing Distribution Processes/Organization Technology Materials/Cash Information Risk Management • Specialty formulation fed to animals in feedlot • Animals tracked through feedlot to slaughter plant • Processed to product specific specifications • Distributed to further processing facility • Distributed to grocery or food service channel

  21. Grain Distribution Discussion New Product development Supply Chain Optimization Product Assurance End User/ Consumer Raw Material Logistics/ Storage Raw Material Input Raw Material Production Customer Manufacturing Processing Distribution Processes/Organization Technology Materials/Cash Information Risk Management • Grain originated from country • Transported through elevator system • Exported and distributed to the customer Satisfy customer’s expectation of ‘guaranteed free of’ at low cost

  22. Grain Processing Discussion New Product development Supply Chain Optimization Product Assurance End User/ Consumer Raw Material Logistics/ Storage Raw Material Input Raw Material Production Customer Manufacturing Processing Distribution Processes/Organization Technology Materials/Cash Information Risk Management • Grain contract grown and originated from country • Transported through elevator system • Processed into food ingredient • Distributed to food manufacturer How to respond to customer dissatisfaction as a result of new technology implementation?

  23. Fully Integrated Meat Example New Product development Supply Chain Optimization Product Assurance End User/ Consumer Raw Material Logistics/ Storage Raw Material Input Raw Material Production Customer Manufacturing Processing Distribution Processes/Organization Technology Materials/Cash Information Risk Management • Specialty formulation fed to animals in feedlot • Animals tracked through feedlot to slaughter plant • Processed to product specific specifications • Distributed to further processing facility • Distributed to grocery or food service channel Satisfy consumer’s demand for safe, low cost meat

  24. Thank you! Jenny L. Verner Vice President Supply Chain Management Cargill Jenny_Verner@cargill.com 952/742-5034

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