Cargill partners with two firms in South to scale up its manufacturing

Global commodity major Cargill has expanded its capacity to manufacture corn starch and related products such as sweeteners in India by partnering with two local firms.

Cargill India, which operates an 800-tonne-per day wet corn milling plant at Davangere in Karnataka, has partnered recently with two units in South India — one each in Karnataka and Andhra Pradesh — that has helped the global player to almost double its production capacity.

“We are also looking at opportunities to partner with companies in the West and Northern region of the country to scale up our operations and expand our product portfolio,” said Simon George, President, Cargill India.

Cargill, which manufactures corn products such as liquid glucose, maltodextrin and starches at its Davangere plant, products mainly used by the food industry, will expand its range through partnerships that will be used in industries such as textiles, paper and also pharmaceuticals.

Eye on the top

The idea is to quickly scale up production and become a national player through market expansion, George said, explaining the rationale behind such partnerships. “We are aiming to be among the top three players in the country in the next two to three years,” George said.

As part of the deal, the local partners will dedicate their manufacturing plant to Cargill, which will upgrade the facility with its technology and help improve the quality of products besides taking care of working capital requirements, George said. Other details of the financials were not disclosed.

Besides helping the local players with its risk management and financial strengths, Cargill will also provide access to its customers, George said.

Also, such a move will help Cargill avoid adding further capacities in the starch industry. The starch industry in India is currently going through a consolidation and there is an underutilisation of overall capacity, George said.

In 2017, Cargill had announced its plans to invest $240 million in Indian operations over a span of five years, of which the company has already invested close to $90 million. The company is commissioning a modern silo to store 60,000 tonnes of corn at its Davangere plant this week in which it has invested ₹100 crore. Early this year, Cargill had announced plans to set up a $20 million plant in Rajasthan to manufacture animal-nutrition products.

For the year-ended May 2019, Cargill clocked a turnover of $1.2 billion in India.

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