Humane Practices
FOOD SEGMENT
Brazil FoodsThis Unit sells and distributes consumer products to the Brazilian retail market and vegetable oils and fats to the food industry and service market. Among the brands of consumer products are Liza, Mazola, Purilev, and Veleiro cooking oils; Maria and Olívia blended oils; Liza, Gourmet, Maria, and Mariana mayonnaise, and Liza salad dressings. This unit is also responsible for selling and distributing Gallo and La Española olive oils.
In a year marked by uncertainties in the domestic consumer market due to the global crisis, the Unit recorded significant growth with considerable increase in volume sold and market share. One of the highlights was the opening of the Liza soybean oil production line in Primavera do Leste (state of Mato Grosso), which allowed for a boost in competitiveness, since the factory is located in the region where the raw material is most widely produced in Brazil and has easy access to markets with potential for further establishment of the product, such as the Central-West and Northeast Regions.
The growth in demand for food products resulted in the need for investments to expand capacity and eliminate bottlenecks. Funds were allocated to expand the production and supply of fats and oils with an enhanced profile of healthiness, as well as the production of salad dressings. The sales force also increased by 25% to almost 100 people, in order to expand the presence and visibility of products and provide unrivaled service to customers in all regions of Brazil. Among the products which recorded an increase in sales, the categories of olive oils and special oils are worthy of mention, with sales rising by 13% and 5%, respectively.
Mindful of the growing demand for salad dressings, Cargill launched two flavors under the brand name Liza: Yogurt and Mustard & Honey, adding to the other five varieties. At the beginning of the year the company estimated an increase of up to 12% in demand for dressings, but this figure reached 20%.
Other highlights were the continuation of the Liza Receita Caseira mayonnaise in the product portfolio (originally launched as a limited edition) and the export of Purilev canola oil to Argentina and Paraguay (it was already available in Venezuela, Uruguay, and Chile).
In the food service market, the company launched Gallo balsamic vinegar, sold in 250 ml bottles to restaurants, bars and hotels.
The company also stands out as a supplier of top-quality fats for the industry, meeting growing consumer inclination toward healthier products. To create solutions in this market, the company always keeps four aspects in mind: meeting customer usage requirements, striving for 0% trans fat, developing products low in saturated fat and achieving competitive cost.
The year was also marked by the incorporation of the fruit blends (liquid, powder, soluble, and emulsions) area, previously part of the Flavor Systems Unit. With this change, Cargill intends to increase the exposure of its portfolio to food service and retail customers.
Cocoa & Chocolate
Cargill is the largest cocoa processor in Latin America and the market leader in Brazil, exporting to countries such as Argentina, Chile, Paraguay, Uruguay, Bolivia, Mexico, the United States, Canada, and the Netherlands. Along with its two plants – cocoa processing in Ilhéus (state of Bahia) and chocolate and compound in Porto Ferreira – (state of São Paulo)the company also maintains four branches and one service station for the purchase of cocoa beans located close to producers in Ilhéus, Itabuna, Gandu, Coaraci in Bahia and Altamira in Pará. Cargill also produces and sells a special line of cocoa powders called Spectrum and different types of cocoa liquor and butter.
The Cocoa & Chocolate Unit is continually innovating to create products and develop, in partnership with clients, specific formulae that meet their needs in the market categories of milk, confections, chocolate powder, chocolate drinks, bakery and confectionery. In 2009, 64,000 metric tons of cocoa beans were processed at the industrial unit in Bahia.
Investments were made in new presses, in the automation of pallet assembly and in revamping the production line. At the Ilhéus factory, the special line of cocoa powders (Spectrum Line) was extended with the launch of powders of single and controlled origin – Ocean and Amazon (produced with the best cocoa beans in Bahia and Pará, respectively) – along with a special blend, the Capri. Solutions for the food service channel were expanded at the Porto Ferreira unit, and Genuine White Chocolate and Toppings & Curls Dark Chocolate were launched.
Reduced chocolate consumption in 2009, especially in the United States (as a result of the global financial crisis), has directly affected the demand for cocoa butter, a key raw material in producing this delicacy. On the other hand, lower-value products such as sandwich cookies and other chocolate-flavored foods had a significant increase in sales, which positively affected the sales of cocoa powder. Among challenges for the Unit was the shortage of cocoa beans in Brazil, which since the late 1990s has led the company to import the product from Indonesia and Ivory Coast to meet processing needs. To avoid a recurrence of this situation, Cargill supports agricultural production in Bahia and Pará to increase the Brazilian harvest. The company’s risk management team also uses financial tools to minimize the risks to cocoa farmers with the volatility of the International Commodities Exchange (ICE).
Starches and Sweeteners
This unit provides ingredients for making candies and confectionery, beverages, milk drinks,fast foods, breads and other products. In the industrial sector, it produces inputs mainly for the paper, cardboard, chemical, fermentation, textile and mining sectors. In Porto Ferreira (state of São Paulo), the Business Unit produces milk whey and operates the maltodextrin drying process to provide the food market with these ingredients.
For Starches and Sweeteners, 2009 was a year of transforming difficulties presented by the international crisis into opportunities, which was achieved by expanding the client portfolio. As a result, the company recorded impressive market share gains in several segments, especially new business. Growth of all product lines taken together reached 40% in the year, 25% higher than forecast. For 2010, the projection is for volume expansion at the same level. In order to meet demand, it was necessary to expand the production lines; the plant in Uberlândia, for example, received an investment of R$ 112 million as part of a project that will increase its capacity by 70% from 2010.
Another milestone was the commercialization of Ingeo™ in Brazil, a bioplastic that breaks down in only three to five months when industrially composted at a constant temperature in excess of 60ºC (more details in chapter: Environmental Management). In Brazil, a company has already decided to use Ingeo™ to manufacture packaging for clothing.
Also worthy of note was the company’s bold action in the paper segment, whereby it expanded its structure to work with large volumes and posted sales of 80,000 metric tons of starch for the segment. Furthermore, it introduced oxidized and cationic starches for the paper market, began selling modified starches in Brazil for paper coating application, modified starch C*Film™, and launched new additives for the corrugated line. In the food area, adoption of potassium citrate and modified starches in a cold process for producing mayonnaise were two further innovations. During the year, the Flavor Systems Business Unit operations came under direction of the Starches & Sweeteners Business Unit in order to take advantage of the synergy of the operation with this business as well as to cut costs. Thus, the Cosmópolis (state of São Paulo) plant became responsibility of this Unit.
Cargill Japan Toshoku
Through its office in São Paulo, the Unit provides food products and raw material from South America to customers in Japan. It exports juice concentrates, bulk wine, frozen yolk, carnauba wax and other items. In 2009, the Unit sold 5,600 metric tons of products to Japan. Orange and lemon juice concentrates were the most sought-after products.
During the year, the Unit’s most significant achievement was offering an alternative lemon juice with a higher level of concentration, allowing for savings in shipping. For 2010, due to the slow recovery of the Japanese economy, volumes exported in 2009 are expected to be maintained.
