Q-1: Mr. Marsili, when did Cargill start its operations in Argentina and what would be the main developments since then?
A-1: Cargill have been operating in Argentina for 50 years. We have passed trough different periods and experimented all the segments of business related to agriculture. We have devoted all our efforts in the country to enhance the competitiveness of the Argentinean farmer. Cargill wants Argentina to be positioned as the country that exports food to the world. We also are working with Monsanto in the development of biotechnological seeds. Today we are suppliers of agricultural commodities. We sell products to the farmer’s cloches and buy cloches from them to export. As you know, the 90% of the Argentinean agricultural products are exported. They are also used as basic raw materials or as processed products. We are also in the meat milling business. Cargill is the biggest producer of milled meat in Argentina. This is a basic domestic food. We also produce vegetable oil. Cargill exports corn, meat, agricultural commodities, vegetable oils and protein meals. Our exports move 1,3 million dollars per year. We are the second exporters of Argentina behind Repsol-YPF. We have been in that position for the last ten years. We also import fertilizers and we distribute them in the country. Cargill also does some financial services that are related to our activities.
Q-2: I assume that Cargill practice these financial services to support the development of the agricultural sector.
A-2: Not directly. Cargill wants to work for the development of the agricultural sector. You have to evaluate this financial picture every day. The producers have to be very solvent to make agricultural businesses. We want to give them opportunities and easy access to the markets.
Q-3: Aside from the commercial activities Cargill is very engaged as well in a Foundation in Argentina. Can you tell our readers a little more about its objectives?
A-3: Yes. We would like to have more money for the foundation. We have concentrated our effort in the education promotion. Cargill thinks that this is an area that deserves more attention from the business community. We are promoting work stands in twenty different schools areas where we operate. Our action is the main leader of this idea. We also educate people in the community in order to carry out something related to education. We built a school in Bahia Blanca that replaced an old one. Cargill also wants to introduce new technologies to education. That is why we give computers to schools. The budget for education is not enough in Argentina.
Q-4: Where in Argentina is Cargill present, referring now to your commercial activities, investments, etc.?
A-4: Our major amount of investments is near Rosario, in Santa Fe. Rosario is a very important city for the agricultural business because it has a good combination of fertile lands for agricultural production and also an excellent distribution. We have there an industrial plant that is the biggest that Cargill has all over the world. We also import the fertilizers to Rosario. The nucleus of our commodity sources is in Rosario. In Buenos Aires, Cordoba and Santa Fe we have our logistic net that supplies the products to the different stations. Cargill buys grains from the farmers and delivers them to the different ports or industrial plants. Our second big investment is in Bahia Blanca. We have there a plant where we process barley for the beer industry. This is our most recent investment.
Q-5: Cargill invested 7 million dollars in the port infrastructure of Rosario in order to distribute from there fertilizers...
A-5: Yes, we started building the elevator in 1979. In 1984, the production ascended to 1,000 tons. Today we are producing 8,000 tons of fertilizers. In 1998, we built a warehouse to store the fertilizers.
Q-6: The agricultural sector was passing through a very difficult situation last year, as a consequence of low prices for commodities and the high increase of petrol price. This problem had negative repercussions on lots of economies all around the world. Did it affect the operations of Cargill Argentina?
A-6: Yes, of course, but we are very competitive in risk management. We know how to handle those risks in order to continue growing. The question is why the prices of the commodities are passing through this situation and what will happen with them in the future. Cargill is very afraid about it because we do not want to be part of a protected sector. There are a lot of countries that protect national and tiny industries and put barriers for the entrance of cheap commodities. India and China are examples of this. China prohibited the entrance of most of our oils. The president of China is coming to Argentina next month. I hope that our President can talk with him about it. India has almost closed its market for our vegetable oils. They cannot do that because the last international agreement established a certain limit for oil tax protection. This situation affected Argentina because we are the major oil suppliers. I think that our agricultural sector is so powerful and competitive that we continue growing even in those circumstances. The Argentinean producers are quick, flexible and incorporate new technologies to their work at low costs. We need the government to make more decisions in order to integrate our sector to the international markets. That is my major request to the Argentinean government. We have a big debt. We need to increase our exports. Argentina is able to produce a hundred million tons of grains but we are only producing 65 million tons per year. We need to pay our debts but also to sell our products.
| Q-7: Where are your main export markets?
A-7: Cargill exports all over the world. We export wheat to Brazil and corn to Europe. We also export both of these commodities to other Latin American countries. Asia is a very good market for our vegetable oil. The Middle East and Iran have also been important destinations. The eastern European countries that were a good destination for us have closed our entrance to their economy. We have gone to new markets with the 80% of our exports.
Q-8: The new minister of Economy will implement higher taxes on some consumption products in order to protect the national industry. A measure which will affect as well the agricultural sector if Brazil realizes its threats, to raise taxes on Argentinean agricultural products. What do you think about it?
A-8: I hope that Brazil can understand the reason for those measures. These are not part of a change of policies. These are very specific and limited measures that Argentina will implement for a short period of time. In 1999, Brazil has devaluated its currency without asking us for permission. Argentina understood that. We do not think that devaluation is a solution for us. So we are looking for other tools. Those tools are the ones that Cavallo is trying to implement. He is not promoting protectionism because Argentina has to be more competitive. In some circumstances when a country is in the middle of a recession, it is necessary to implement some defensive measures in order to continue growing.
Q-9: The agricultural sector was represented in the last few weeks by a secretariat, then by a sub-secretariat and now again by a secretariat. Besides the changes of names, what is your impression of the governments approach to the industry you represent?
A-9: I think that the important thing is to have good ideas and strategies. When the agricultural sector was a matter of the Ministry of Agriculture, we did not have much more attention than the one we do have today. The question is that the institution understands which are the most important country policies. Argentina does not spend much money on the agricultural promotion. I am not saying that we have to promote the exports of raw materials. We need to grow in the industrialization of food products. That is our strength. Our future production needs good ideas, technology, design, and solutions in order to improve the agricultural level of Argentina.
Q-10: A final question Mr. Marsili, as you know, our readers are top executives and businessmen. Can you tell them a little more about your personal goals and your professional background?
A-10: I have been an exception on Cargill´s structure. In this company, you get into top positions by practicing merchandising activities. You start as a trainee and you learn skills and abilities to do things. I started working for the company in 1974. I began as an accountant. I was the auditor of some operations and activities. Then, I worked in the financial sector. Afterwards, I became a manager. I think that I was lucky in choosing a very good team. I consider myself a manager and a businessman. The right strategy for the development of the company is to convince and motivate those employees that have the resources to make it grow. We have been successful. That is why I am here.
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