Strategic Acquisitions of Cargill in Central America...

Produced by: Taybele Piven, Director of Operations in LATAM for WDM Group 

Interviewee: Xavier Vargas, Business Unit Leader, Cargill Meats Central America

The exact formation for an strategic direction

Within the management of Cargill Meats is engineer Xavier Vargas, who as head of the company has driven its evolution, presence and businesses. Vargas has spent most of his career with Cargill, managing all operations in Central American countries (Honduras, Nicaragua, Costa Rica and Guatemala).

   It was 1996 when the current president of the board of Cargill Meats Central America began his work at the company as training manager in Honduras. Subsequently, he worked his way up, occupying the cold cuts management post. By the year 2000 he moved to Guatemala to handle one of Cargill’s acquisitions and took over the commercial management position.

   By 2002, Vargas decided to start his own business, a coffee roaster. Six years later (2008), he returned to Cargill as purchasing manager for Central America, and then became commercial manager for Cargill in Honduras. In 2010 he moved back to serve as CEO of Cargill in Nicaragua.

   In 2013, Vargas served as commercial manager and CEO of Cargill in Costa Rica; afterwards he was selected as executive director for Nicaragua and Costa Rica. Since May 1st, 2014, Xavier Vargas was announced Chairman of the board of Cargill Meats Central America.

Brands that make a difference

"Our most important asset is the trademark of our products. We own more than 20 brands in the region that have a lot of tradition in our operating countries," says Vargas.

   The brand value of Cargill is equivalent to customer appreciation, with products that have been in the Central American households for decades. One example of this value is the brand Tip-Top of Nicaragua, Pipasa from Costa Rica and Pollo Norteño in Honduras, which have captivated the national market for decades. In the range of cold meats, where the main attribute is practicality, the company has strong brands such as Perry in Guatemala, Delicia in Honduras, CAINSA in Nicaragua and Blue Ribbon in Costa Rica, to name a few.

   "Brands are associated with tradition, quality and taste, which helps us have the preference of consumers," he adds.

Investments and next acquisitions for global competitiveness

Among their main investments for entrepreneurial development, some examples are:

• Costa Rica: With an investment of millions to increase the fabrication of products with added value.

• Nicaragua: With the opening of a new distribution center that will become the largest site of operations in the country. In addition it will include two processing plants. This project has an investment of $40 million.

   Their growth strategy will evaluate the possible incorporation of companies that fit Cargill’s vision for commercial expansion in the Caribbean, Central and South America.

Human talent, basis of corporate success

The outstanding achievements Cargill Meats has acquired in Central America over the years have been largely thanks to the human resource commitment and competent execution.

   Among their objectives is being the best company to work for in Central America by 2020. To achieve these goals they are optimizing their work environment and are developing talent by transferring employees to international Cargill plants.

   "We are not a company of chicken, we are a company of people, and we are dedicated to have the best for them to take care of our chickens. But our job as leaders of this company is to bring the best talent, develop them, retain them and promote them," says Vargas.

Food advances for consumers’ taste

In recent years, Cargill has increased their brand’s market presence by packaging individual pieces with information about the company, thereby increasing the consumer preference. Additionally they have expanded their added value lines, providing a greater number of solutions towards convenience and ready-to-cook products.

Artisanal and modern processes

As the poultry industry continues to use traditional methods, the implementation of modern technology exceeds investments of $20 million in equipment, improvements and genetics. Given the intensity of the process, farms require about 10,000 employees.

Strategic partners that supply quality

"Our suppliers, which we call strategic partners, walk hand in hand with us, providing us with raw materials," says Vargas.

Aside from having their own fleet, Cargill has a department that negotiates all regional purchases.

   To be less dependent on imports and strengthen domestic suppliers, they are updating agricultural techniques to develop local crops of corn and sorghum in Honduras and Nicaragua.

"We are trying to give more value to the country by supporting the local produce of grains, corn, sorghum and soybeans, and stop importing," he adds.

A future of vast opportunities

Cargill’s success in Central America is more than evident; the company has doubled the size of their operations in the region in just five years, making them a model for other units in Latin America. For 2020, they are looking to double the size of the company once again.

   The future remains bright for Cargill Meats Central America and Cargill Animal Nutrition, as they are in a region with one of the largest GDP growth trends in the world, with an increasing domestic consumption of animal protein.

The company will continue to innovate to bring to market new lines and solutions, creating new consumption and increasing in percentage.

Related articles:

Editorial of Cargill in FDF World Magazine

Spanish version of this article here

Cargill Corporate brochure