i Presenting to
US'S BIG PLAYERS
WHAT'S NEWS Issue 3 March 1998
working relations
3
Last month, a team of experts and senior managers led by Henk Visser of our
executive board, were in the United States to deliver a series of specialized
presentations to several high-profile clients including one of the leading players
in the world of food and agribusiness - the Minneapolis-based Cargill group.
Here's an example of a US initiative - which is at the leading edge of our new
and more proactive banking style.
The customer focus strategy recognizes
that - in order to maintain our position as
the pre-eminent Banque du Référence in
global F&A - we will need to concentrate
n further cultivating our consultancy
capabilities rather than merely selling
traditional credit products. This, in turn,
implies ever greater emphasis on the
powerfully knowledge-driven side of our
business and sharper focus on strategie
corporate issues including mergers,
acquisitions, joint ventures, divestments,
and related financial restructurings. This
emphasis on F&A corporate advisory
services lay behind presentations
specifically developed for three important
American clients which, in addition to
Cargill included Koch Industries and
Farmland. Each cliënt, needless to say, has
substantially different interests and
req uirements.
WORLD LEADERS
Cargill is already established as one of the
^orld's leading traders and processors of
grain as well as a top producer of animal
feeds. lts annual sales top USD 50 billion.
The group is also involved in meat
production, a fast-changing market.
'Higher disposable incomes in the
developing world are changing diets and
leading to greater demand for and
consumption of beef, poultry, and pork,'
says Frans van Bijsterveld, front F&A
Research. 'Any company that wants to
Chicago-
based David
Nelson
handling
relationship
management
with Cargill
tap these emerging markets has to
consider a number of important
questions.' First and foremost among
these questions is whether to target the
high value added sector of the market or
to concentrate, instead, on delivering
products at the lowest possible cost. Flach
option - and different options will be
appropriate for varying products and
geographical markets - implies the need
to develop very different capabilities and
business systems.
MAIN TRENDLINES
Our presentation to Cargill provided an
overview of main trendlines affecting the
world meat market. It sought to highlight
potential strategies and success factors,
and the core capabilities associated with
each. It synthesized a broad mix of
practical experience and strategie
understanding, looked at both the
upstream and downstream side of the
food chain, and was 'very well received'
according to David Nelson, who handles
relationship management with Cargill out
of Chicago. Cargill responded with its
own perspectives, stimulating a lively and
mutually rewarding discussion. The
meeting thus marked the beginning of an
important strategie dialogue between
Rabobank and Cargill at the highest levels
of operational management.
FARMLAND PRESENTATION
Our presentation to Farmland, the biggest
farm cooperative group in the US,
revoived around different strategie
questions specifie to a group that is, like
ourselves, organized as a cooperative:
namely, how to engineer a cross-border
expansion strategy in order to deliver the
highest possible value to the cooperatives'
membership.
BEEF ISSUES
Our presentation to Koch Industries'
Agriculture division focused on beef
issues. The second largest US privately-
Henk
Visser
heading the
Cargill
presen
tation team
owned company - with sales over USD
30 billion - Koch is a leading player in
two sectors (cow/calf and feedlot) of the
beef industry. Koch is expecting to close
an acquisition of Purina Mills on March
12. Purina is the leading US
manufacturer of compound feeds with
USD 1.2 billion in sales and a 10 percent
market share. Koch wants to use Purina's
compound feeds network - with 4,000
dealers and 4,000 direct customers - to
assemble finance, marketing and
integration opportunities in its growing
F&A business, not only domestically but
worldwide. Thanks to the presentation
by Henk Visser's team, we are now very
well-positioned to work with Koch in
this effort.
RISK MANAGEMENT
AU three presentations recognize that the
ability to identify and manage risks
confronting our F&A clients is crucial.
These include not only the traditional
concerns - such as country risk and
interest rate or currency movements - but
also F&A-specific concerns such as raw
material sourcing, volatility in market
prices for raw materials, inventory
management, and market positioning of
the final product. This kind of service -
and solutions-oriented banking, which is
the competitive edge that will keep RI's
F&A operations in a leadership position
on the world map, relies crucially on
multi-disciplinary teams.
THE TEAM
Members of our team who attended these
presentations included Henk Visser, Niek
Streefkerk and Cordon Butland (APFT),
Frans van Bijsterveld, David Nelson, who
also handles relationship management
with Farmland, and Gordon Arnold of
our Dallas office, who is relationship
manager for Koch Industries. Backing
them up were at least a dozen APFT
regional experts front Asia, Central
Europe and Latin America, as well as a
half dozen researchers from F&A
Research.
