Cargill to build 5th feed mill in Korea

David MacLennan, Cargill Chairman and CEO

By Lee Hyo-sik

Cargill will build its fifth livestock feed mill here as early as 2018 to expand output and more effectively compete with market leader, the National Agricultural Cooperative Federation, or Nonghyup.

The U.S. grain and livestock feed producer said it plans to explore more opportunities to invest and hire workers in Korea to capitalize on its growing animal food market, which has reached 10 trillion won ($8.85 billion), in line with Korean’s increasing meat consumption.

“We are proud of our legacy built by the hard work of our employees in Korea. We are committed to continue to invest and grow in this market,” Cargill Chairman and CEO David MacLennan said in a press conference Friday, marking the 50th anniversary of its Korean unit, Cargill Agri Purina.

“We are very grateful to our Korean customers and partners, and will continue to work to become the most trusted partner in providing safe, responsible and sustainable solutions for the animal nutrition industry in Korea,” MacLennan said. “We know that our assets will be secure and our workers are safe because Korea is a stable economy. We will continue to look for more investment opportunities here.”

To achieve sustainable growth in the country’s feed and livestock industry for the next 50 years, Cargill Agri Purina CEO Lee Bo-kyeun said the firm will build a new plant over the next two or three years to expand its presence.

“We operate four mills in Korea, capable of producing as much as 2 million tons of livestock feed annually. We would like to increase the output to 2.7 million tons by 2025. By then, we expect our annual sales will rise to 1.5 trillion won,” Lee said. “We haven’t decided yet as to where we are going to construct the fifth mill. But it will probably be in either the Gyeongsang or Jeolla provinces.”

Cargill Agri Purina sold 1.6 million tons of animal feed in 2016, up from 1.49 million tons a year earlier. But its sales inched down to 826.7 billion won from 847.2 billion won amid the intensifying competition with Nonghyup and other competitors.

The company is the third largest producer, employing 600 workers, after Nonghyup and Harim in the world’s ninth largest livestock feed market.

In November 2015, Cargill opened its largest livestock feed mill on a 52,610 square-meter site in Pyeongtaek, Gyeonggi Province, capable of producing 870,000 tons of feed annually. It also runs three other production facilities in Gunsan and Jeongeup, North Jeolla Province, and Gimhae, South Gyeongsang Province.

“We will continue to provide livestock farmers with safe, high-quality feeds and sustainable farm management solutions to help increase livestock production, Lee said. “Cargill Agri Purina will offer its expertise in farm succession planning, farm productivity improvements and production of safe livestock products. It will also provide leadership in developing biogas plants and reducing greenhouse gas emissions as part of our sustainability focus in Korea.”

Cargill first entered Korea in 1956 and set up its first plant in 1969. Cargill Agri Purina was formed in 2007 through a merger of Agribrands Purina Korea and Cargill Korea in 1997.