Fauji Foundation and Cargill enter partnership for Port Qasim

In order to improve Pakistan’s supply chain one of the country’s leading corporations Fauji Foundation have signed an agreement with Cargill, which would enhance overall value for stakeholders including suppliers, customers, employees and shareholders.

With this deal, Cargill will be taking a significant minority stake in the Fauji Foundation Grain Terminal at Port Qasim and will be handling grains, cereals, rice, oilseeds and fertilizers through this dry cargo terminal in Pakistan. The financial details of the investment, however, have been kept confidential by both companies.

Cargill is a 155 year old company that brings food, agricultural, financial and industrial products to people all around the world. Cargill started its operations in Pakistan in 1984. Today it has business interests in refined oils, animal feed, grains and oilseeds, cotton, food ingredients, sugar and metals. It is one of the leading suppliers of palm oil and soybeans and cocoa powder to Pakistan. It announced its strategic investment intent in January 2019, reflecting its long-term commitment to the country.

Talking about its entry into the Pakistan market, Imran Nasrullah, country president, Cargill commented, “This is a demonstration of our commitment to partner in the growth of Pakistan’s food and agriculture industry. We are very proud of our partnership with Fauji group and together with them will strengthen the supply chain operations in the country. We are thankful for all the support from Maritime Ministry towards this initiative.”

The FAP Terminal at Port Qasim is a joint venture between Fauji Foundation, Akbar Group of Companies and the National Bank of Pakistan (NBP). It operates a state-of-the-art grain and fertilizer marine terminal at Port Qasim, Karachi. It started operations in 2010 and provides complete Supply Chain Management solutions for ship berthing, unloading, storage and bagging of all types of grains, cereals, oilseeds and fertilizers.

Both companies aim to bring in significant foreign investment into the country’s agriculture sector and boost the country's agricultural supply chain through new partnership deal.

Waqar Malik, Chairman Fauji Group of Companies, said about the partnership, “We have joined hands with Cargill for FAP Terminal, Port Qasim. This is a clear validation of the Pakistan opportunity seen by the world’s leading player in agriculture commodities. With its global port experience, Cargill will help drive greater operational efficiencies for the port to reach its potential of handling agri-cargo safely and efficiently. Fauji Foundation and its associated companies are building on their agricultural and infrastructure sector presence to help solve the pressing issues, including nutrition security, of our country.”

Cargill is already a leading soybean and palm supplier in Pakistan and will further strengthen its presence as a significant agri-importer, while enabling FAP to leverage Cargill’s extensive experience in bulk handling, port operations and technical know-how. Going forward, both partners aim to build a safety culture that will create a world class, safe and sustainable environment for consumer in Pakistan.

Minister of State & Chairman Board of Investments, Atif Bokhari stated: “Cargill’s acquisition of a stake in Fauji Foundation Grain Terminal is a further validation of confidence for foreign investment in Pakistan’s economy and ease of doing business. This is a landmark partnership of Global and Local conglomerates and will pave the way for other international companies to see Pakistan as a preferred destination for investments.”

Talking about the new investment Mumtaz Kazmi Head of Investments Cargill Asia Pacific said, “this marks an important first step for our growth plans in a country of increasing importance for us in the region.”

Among Cargill’s other initiatives in Pakistan it is exploring several opportunities in the agricultural space as Pakistan is an important market for it. Cargill’s global expertise, other than in commodity trade, lies in areas including feed milling, meat processing, oilseed crushing, etc. The company aims to leverage its strengths to help address the needs of the Pakistani market.

Talking about why Cargill took time in making this investment in Pakistan, Imran Nasrullah of Cargill commented, “the company was carefully assessing various business opportunities in Pakistan. This included analyzing market dynamics, understanding the needs of the local market, exploring the opportunities that add value to Cargill’s portfolio and what benefits could be brought to the stakeholders in the country. Having completed all the due diligence and the necessary regulatory approvals, we are happy to announce this investment in Port Qasim. As a growth company we will continue to explore future opportunities.”

The Covid-19 pandemic has not affected Cargill’s operations or caused any disruptions, as it has impacted many other businesses around the world. Due to implementation of remote protocols, Cargill has ensured that new procedures and equipment are in place allowing employees to work effectively. There are also new measures in place for dealing with customers and other external personnel to ensure safety for all.

The FAP Terminal, Port Qasim is the only modern grain terminal in the country and handles around 2.5 MT of imports annually. These imports are expected to further grow in tandem with the demands of a large population. A large portion of these imports include Soybeans, which are crushed locally and have resulted in a large domestic oilseeds processing industry. It is therefore imperative that the port runs its operations as efficiently and effectively as possible.

Through this partnership, Cargill brings its global experience in handling port operations and with Fauji Foundation aims to improve port efficiencies and modernize operations using learnings from ports around the world. This will also enable Fauji Foundation to build on its agricultural and infrastructure sector presence and help strengthen agri supply chain sector in Pakistan.