The next chapter

In Brazil, Cargill’s investment in a corn milling complex is helping a small town turn a new page

By Carl Peterson November 17, 2014

CASTRO, Brazil - When Reinaldo Cardoso comes to work every day, he has one central preoccupation: How can he build a future for his hometown while preserving more than 300 years of tradition?

Cardoso is the mayor of Castro, a rural community of about 70,000 in Brazil’s corn belt state of Paraná. As far back as the eighteenth century, ranchers drove their livestock down Castro’s main street on the long cattle drive from southern Brazil up to São Paulo. But today, it’s a community trying to write its next chapter, fighting to ensure economic growth. And for Cardoso, that can’t just be about high-quality jobs—although those are needed—it also needs to be about protecting the town’s character.

"Our main concern is preserving the quality of life that big cities don’t have,” Cardoso says.

So while Cardoso and his lieutenant, Vice Mayor Marcos Bertolini, want to attract investment, they’re looking for partners who take a long-term, holistic view, including doing business ethically and in a way that nurtures the community.

“My biggest pride is to have had the opportunity to live in other cities in Brazil and to come back to my hometown, where what I like most is that it is a small city with close-knit families,” says Bertolini.

Walking down the streets of Castro, you get a strong sense of the social fabric that Bertolini is talking about, a fabric that over the decades has integrated groups of immigrants from places like Holland, Germany, Poland and Japan. On a Sunday evening, as the sunset lights up the pastel-colored houses, families gather in the park by the river. Kids play pickup games of volleyball and soccer. In the square at the center of town, teenagers hang out under the tall, widespread branches of the region’s distinctive araucaria trees, which look like a cross between pine trees and palms.

Cardoso and Bertolini believe that Cargill is the partner who will help them sustain all of this while also providing good careers for a lot of those kids when they grow up. Employment could come directly from Cargill’s large new corn mill a few miles outside town—a $212 million investment— or indirectly, as Cargill’s investment attracts partners keen to take advantage of Castro’s location and its increasingly professionalized workforce.

“Cargill is the icebreaker for our city,” Cardoso says.

Castro may have been prospering for 300 years, but its more recent past has included economic struggles. Twenty years ago, the town was bigger and included several nearby industrial areas. But those parts of the town ended up splitting off as part of a separate community, and Castro lost 10 percent of its population and 25 percent of its tax base. Since then, funding for schools, healthcare and infrastructure has been tight. With Cargill’s arrival, both municipal leaders like Cardoso and the local business community see potential to regain what was lost.

“We have the agricultural products here, but not the capacity to industrialize them. What we also need is a lot of services to prepare for growth: expertise in logistics, construction, et cetera,” said Lino Lopes, president of the Commercial, Business and Industrial Association of Castro. “Cargill is bringing good practices from other places and showing us how we can develop together.”

New livelihoods

So far, Cargill and its first co-locating partner in Castro, the German-based specialty chemicals company Evonik Industries, have together created 300 direct jobs and 620 indirect ones in the community.

Many of these positions have been filled by young natives of Castro, like 25-year-old engineer Lorena Poletti, 27-year-old reliability engineer Daniella Carnerio and 22-year-old refinery operator Heriton Marcondes.

Before coming to work for Cargill in 2013, Poletti was living in Curitiba, the nearest big city. Now, she’s back in her hometown, close to her family.

“For me, it’s the best period of my life. What I do for Cargill matches what I studied in graduate school. I love to work here and live here,” she says. “It’s a big opportunity to start with this company.”

Carnerio and Marcondes agree, although all of them express the same sentiment as Mayor Cardoso and others that the character of Castro must be protected, and that there are more important things than pure economic growth.

“Castro is a small city. You don’t have as many things to do. But you know a lot more people than in a big city. You can live better here,” says Carnerio.

“For me, you need health, dignity and happiness. A stable life is what you need,” says Marcondes, “It’s important to look at what a company offers society. Can it be just jobs? No, they need to offer more.”

As Cargill establishes its presence in Castro, it is participating in a handful of programs to help strengthen the community. An investment of more than R$1.2 million includes a variety of programs, such as projects to improve water quality and soil conservation in the region. Another program starting in late 2014 is aiming to help young people in the area with workshops on professionalization, technical training and entrepreneurship. These courses will be held around town at locations like Castro’s city hall, with slots for as many as 400 students over 15 months.

“As a company, our arrival here is an opportunity to think about long-term projects that contribute to the social environment of the city in a sustainable way,” said Renata De Paula, Cargill’s coordinator for social responsibility in Castro.

First impressions

Driving outside of town, the tight blocks of houses give way to rolling hills of corn and soy nearly ready for harvest. The Cargill campus sits back along a dirt road off the main highway.

Walking through the grounds near the corn mill, caramel aromas thread through the hot blasts of air from the industrial driers. With the large open spaces both inside Cargill’s fences and in the areas adjacent, it’s clear that what’s already here is just a prologue for what’s to come.

A key part of the investment is securing co-locating partners like Evonik, which was the first to agree to build a plant next door to Cargill, and that requires a plant designed to make it easy to pipe products right over the fence, while also sharing utilities like power, steam and wastewater treatment.

“We get to build a brand new culture, everything. It’s not just a great opportunity, it’s once in a lifetime,” said Thiago Carbonari, the refinery manager.

The results to date of the plant’s start-up have been good.

“The team did a great job executing the startup. Their safety record was phenomenal,” said Laerte Moraes, leader of Cargill’s starches and sweeteners business in South America.

Evonik, which has had a presence in Brazil for 60 years, has been pleased so far with its experiences as Cargill’s neighbor.

“It’s uncommon to have such an open, transparent relationship as we have with Cargill at Castro,” said Weber Porto, president of Evonik’s business in Brazil. “It’s a good combination of being at the right place with the right partner.”

Cardoso and Bertolini state their optimism directly. “Cargill and its partners will bring a better quality of life to the people of Castro,” Bertolini says.

There will inevitably be challenges, and no one can know the future with certainty. But the new Cargill team members at the corn mill don’t think achieving Cardoso’s balance between the old and the new will be a problem.

“Castro will always be Castro,” they say with a laugh.

With thoughtful looks on their faces, they point out that the town has maintained its identity for 300 years, and this track record gives them confidence that it can continue to do so as it looks to author the next part of its story.