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AMC Conference

Supply Chain opportunities and

challenges

Cargill Australia

www.cargill.com

June 2018

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Cargill around the world155,000 employees in 70 countries

EUROPE, MIDDLE EAST & AFRICA25% of gross investment

23,000 employees

ASIA PACIFIC17% of gross investment

54,000 employeesLATIN AMERICA15% of gross investment

34,000 employees

NORTH AMERICA43% of gross investment

44,000 employees

Employee data as of Aug. 31, 2017.Gross investment is a four-quarter average as of May 31, 2017.

Our purpose:To nourish the world in a safe, responsible and sustainable way.

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We operate within four key business segments:

Food Agriculture Financial Industrial

We provide food and beverage manufacturers, food service companies and retailers with high-quality ingredients, meat and poultry products, and health-promoting ingredients and ingredient systems.

We buy, process and distribute grain, oilseeds and other commodities to makers of food and animal nutrition products. We also provide products and services to crop and livestock producers.

We provide our food, agricultural, industrial and financial customers around the world with risk management and financial solutions.

We serve industrial users of energy, salt, starch and steel products. We also develop and market sustainable products made from agricultural feedstocks.

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Cargill established a presence in Australia in 1967 and has continued to grow and invest in Australian agribusiness ever since.

Our main businesses include:

• Grain & oilseed origination, storage and handling (& JV in S&H)

• Malt & oilseed processing, and vegetable oil refining

• Trading and marketing of grains, cotton & oilseed products domestically and for export

• Sales of Cargill cocoa & chocolate products to the domestic market

• Sales of Cargill Starches, Sweeteners & Texturizing Solutions to the domestic market

• Joint venture in beef

About Cargill Australia

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Cargill integrated supply chains

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Australia’s Grain Domestic MarketDepending on the production year, 25% - 40% of all grains grown in Australia are consumed domestically.

East Coast domestic market (feed, food and industrial) represents approx. ~12 million tonnes.

Animal feed by the Australian livestock industries Chicken Meat and Laying Hen Industries 30%

Dairy Industry 25%

Beef Industry (through feedlots) 26%

Pork Industry 12%

Sheep and Horse Industries 4%

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Storage & Handling - Trends

• Rationalisation and modernization of commercial storage networks

• Large increase in on-farm storage

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Storage and Handling (Commercial) Opportunities & Challenges

Challenges• With a need to lower supply chain

costs and drive efficiency, sometimes flexibility is the tradeoff.

Opportunities • Automation to reduce labour and

site costs• Fast load rail and all weather

access• Scale sites to realise lower cost per

MT

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On-Farm StorageOpportunities & Challenges

Challenges• Price discovery & Stock information• Quality management • Logistical issues (e.g. weather)• Liquidity

Opportunities • Technology/Innovation to improve

transparency/availability• Quality management systems• Stocks Information

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Trends in Export Infrastructure

• New capacity in Newcastle, Port Kembla, Geelong and Adelaide

• Improved capacity at all terminals due to better rail capability

• Implication for the domestic supply chain in terms of available stocks and where it will be held.

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Market Influences & Supply Chain

Trends• Changes in export demand impacts the supplies available for the domestic market.• Small year on year changes are very different to structural demand changes

2012-13 2017-18

Export Demand by Destination Market - Sorghum

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Opportunities & Challenges from Demand Driven/Export Changes

Challenges• Changes in export demand impacts the

supplies available for the domestic market.• The ability to export greater volumes in the

Nov-May window leaves the domestic supply chain exposed.

Opportunities• Stocks Information• Coastal supply chains• Inland Rail – will facilitate efficient

south-north movement of grain.

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Freight Trends

Trends• 50% split rail/road• Road - clear trend towards larger loads • Rail - still lagging international

competitiveness

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Freight – Opportunities & Challenges

Rail• Improved utilisation and lower

freight costs to port• Continued investment in under-rail,

above-rail, access and pathways.

Road• Increased utilisation of larger

capacity vehicles• Better long term planning and

coordination of freight corridors

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Driving competitiveness

Embracing change

Driving Competitiveness

Influencing the operating environment

Conclusion

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Thank You