The Giant Agribusiness Company
Giant is one good word to describe Cargill. It is the largest privately owned company in the U.S. It’s even large compared to publicly held companies. Cargill has 142,000 employees in 65 countries. In fiscal year 2012 the company generated a staggering $133.9 billion in sales and other revenues and $1.18 billion in net earnings from continuing operations.
The company was founded in 1865 by William Wallace Cargill at the close of the American Civil War. Known as W.W. Cargill and Sons it started with one grain storage warehouse in Conover, Iowa. Part of his strategy was simple; follow the expansion of the railroad system throughout the newly settled prairie to gather and process grain. He was soon joined by his two brothers and they continued to expand putting up country elevators and major terminals in the Minnesota towns of Minneapolis, Buffalo and Duluth.
During that time the company was involved in other businesses as well like insurance, coal, farming, flour milling, railroad, lumber, and real estate. In a way the company was a victim of its own success. The death of the founder in 1909 revealed that the enterprise was highly indebted. It was his son-in-law John MacMillan who led the company from its low point in 1910. He managed to have the debts restructured with a debt repayment plan in place. All the debts were paid within six years. Non-profitable businesses were also sold.
Like any company that has lasted over one hundred years Cargill has had high and low points. Nevertheless it has managed to adapt and prosper. The original family descendants have also managed to keep hold of the company and have been wise enough to let outsiders run the company when necessary.
Cargill has evolved from trading grains to processing many products and moving up and down the value chain. Today it operates with five business units: Agriculture Services (customized farm services and products); Food Ingredients (food and beverage ingredients, meat and poultry products); Origination and Processing (commodity origination, processing, marketing and distribution); Risk Management and Financial (risk management and financial solutions): and Industrial (salt, steel, and fertilizer).
Cargill’s customers range from companies in the food, industrial and pharmaceutical industries, well as food service providers and farmers. It’s a behemoth which looks on its way to prospering for another one hundred years.