Transitioning positions | Jeff Vassart takes over the helm of multinational’s Canadian operations
With prairie grain farming booming and demand for food high around the world, changing leaders now at Canada’s Cargill subsidiary is a pleasant process, acknowledge its outgoing and incoming presidents.
“It’s a good time to be handing it over to the next generation,” said outgoing Cargill Ltd. president Len Penner.
But he and new president Jeff Vassart noted the vulnerability of farming, agriculture and the food products business to long cycles of low earnings and losses, to great volatility, and to constant consolidation and change.
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Vassart thinks evening out that cyclicality, volatility and uncertainty is a role that Cargill, which has focused on that function in recent years, can expand and develop to help build a sounder, surer Canadian agriculture industry.
“We operate in very complex supply chains,” said Vassart, who returns to Canada after two years spent working within Cargill’s Australian operations.
“There are a number of stakeholder groups and what has served us well as Cargill is understanding those diverse stakeholder groups and partnering with our customers to work through what are the opportunities in front of us and can we realize the full potential.”
The Canadian arm of privately owned multinational Cargill has, over the decades, become a mainstay of Canada’s farming and agriculture sector. It is one of the country’s big three grain elevator companies, the owner of one of Canada’s biggest cattle slaughter plants and some of its largest canola crushing plants.
For many years Canada’s grain and meat production industries were relatively dull, dusty parts of the economy. There was much consolidation in the sector, but not great profits or excitement.
However, Cargill incrementally grew through the period, adding businesses and expanding operations.
When the agriculture boom hit in the mid-late 2000s, Cargill was primed to benefit from its myriad investments, and that led to even more investment. It is building a new canola crushing plant in Camrose, Alta., and expanding its refinery at the crushing plant in Clavet, Sask., as well as investing in numerous other operations.
Penner said Cargill now has six times the capital investment in Canada that it did in 1990 — proof of its optimism about Canadian agriculture.
“We vote with our wallets,” said Penner.
One of the less capital-intensive parts of the Cargill empire is one of its brightest lights, Vassart and Penner said. Risk management and marketing advice has become a bigger part of Cargill’s attempt to help farmers and end users profit from interacting with the company and Vassart said he will try to develop that while he’s president.
Penner said Cargill connects all the parts of the food chain due to its position in the middle, but knows it needs to make customers on both ends see its role as positive to their businesses. If farmers and food processors see Cargill helping with their challenges, they will be happy partners.
“Our future success is going to depend on helping our customers prosper,” said Penner.
“What does the next turn of the flywheel look like for our customers? What can we bring to the table that can help them?”
Cargill thinks it can help grain and livestock farmers manage volatility and improve returns.
“We don’t think (volatility) is going away shortly,” said Penner.
Vassart said his Australian grain industry experience will help him in Canada as the industry here transitions away from the Canadian Wheat Board’s monopoly.
Australia broke its wheat monopoly a few years ago and the experience has not been entirely smooth. What he’s seen since coming back suggests Canadian farmers, grain companies and food companies might do better because they have more experience with free market sales and they also seem to be collaborating better.
“In the early days (in Australia) I’m not sure all of the stakeholders involved through the supply chain worked as one to try to overcome the challenges that faced them from an industry perspective as opposed to from an individual stakeholder point of view,” said Vassart. “They were in a different place when they went through deregulation.”
Vassart thinks Cargill is well-positioned and will continue to expand.
“The combination of people and customer focus to me are some of the things that I have enjoyed the most out of being part of the Cargill organization over the years,” said Vassart.
