By Long Haibo, Jin Sanlin & Zhang He, Research Team on “Deepening the Strategic Cooperation between China and Main Agricultural Trade Partners”, Research Department of Rural Economy, DRC

Research Report No. 108, 2016 (Total 4991) 2016-8-22

Abstract: As one of the world famous international large grain dealers, Cargill’s business has covered more than 70 countries and regions all over the world. Its investment activities embrace the entire industrial chain of agricultural products, with emphasis laid on the industrial investment in the middle-to-low -ends of industrial chain, the building of a global supply chain of agricultural products, and information collection and risk management. The reasons that Cargill can maintain the lasting investment momentum and high profit growth are: first, it has vigorously implemented a localized operation strategy; second, its stakeholders have formed sound cooperation; third, it has a well financing system and strong financing ability; fourth, it has actively expanded the emerging markets, with a long-term investment concept. In contrast, most investment projects of China’s food and agriculture enterprises have focused on the production process, with inappropriate control in agricultural industrial chain. In addition, it is difficult for China’s businesses to make overseas financing, with poor risk resisting capacity and the lack of scientific investment and decision-making ability. Therefore, it is necessary for China’s enterprises to draw the experience of Cargill in making global strategic investment, adhere to the investment purpose of giving priority to economic benefits, determine the key areas of foreign investment in a reasonable manner, choose appropriate investment model, actively explore the cluster investment, pay attention to performing social responsibilities, and continue to improve the investment decision-making ability and risk prevention capacity.

Key words: global strategic investment, supply chain management, agricultural enterprises, Cargill Incorporated