Business

Cargill CEO talks Diamond V purchase in Cedar Rapids

The acquisition closed at the end of 2017

The Diamond V South Plant in Cedar Rapids on Friday, Jan. 19, 2018. Diamond V has been acquired by Cargill. (Liz Martin/The Gazette)
The Diamond V South Plant in Cedar Rapids on Friday, Jan. 19, 2018. Diamond V has been acquired by Cargill. (Liz Martin/The Gazette)
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CEDAR RAPIDS — Cargill’s acquisition of Diamond V should change very little for the Cedar Rapids animal nutrition company, the CEOs for both said Friday.

“This is a story about growth. This isn’t a story about, how can we squeeze as much profit out of what is already here,” Diamond V CEO Jeff Cannon said.

Cargill executives, including CEO Dave MacLennan, visited Diamond V’s operations Friday. The visit, which included tours of Diamond V’s southwest plant and employee meetings, came just weeks after Cargill closed on its purchase of Diamond V.

“Why would you mess with success? This is a great company that is performing very well,” MacLennan said.

Cargill announced it would acquire Diamond V last October, and the deal closed Dec. 31. The purchase marks an expansion for Wayzata, Minn-based Cargill here as the company already employs about 350 at a corn milling plant in southeast Cedar Rapids and two soybean processing facilities.

It’s also the end of local ownership for Diamond V, which was founded in Cedar Rapids by C.W. Bloomhall in 1943. Diamond V’s name and leadership has remained, however. It has about 128 employees in Cedar Rapids and 300 globally.

Cannon and MacLennan described the acquisition as a formalization of a partnership the two companies have had for years. Together, Diamond V and Cargill can make more of a dent in the global animal nutrition business than they could alone, the executives said.

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“When you think about what Diamond V does in the areas of animal nutrition, animal health, immune response, it’s a perfect strategic expansion of what we already do,” MacLennan said.

News of the acquisition came around the time two other locally based companies — Rockwell Collins and Apache Inc. — announced they also were being acquired by non-Iowa businesses. Together, the deals sent some concerns through the community about whether the businesses will remain committed to Cedar Rapids.

Pointing to their companies’ 50- and 75-year histories in Cedar Rapids, MacLennan and Cannon said the acquisition won’t negatively alter their company’s relationship to the city.

“We’re here to stay and we believe firmly that you take care of the communities and of the environment and of the people where you work and live,” MacLennan said.

He said Cargill has given $833,000 to Cedar Rapids organizations and employees have volunteered for about 1,000 hours during the past two years.

Cargill is privately owned and did not disclose the value of the acquisition. During the three-month period in which it acquired Diamond V, Cargill said it spent $1 billion in acquisitions, joint ventures and facility investments.

The largest privately owned company in the United States, Cargill reported more than $107 billion in revenue and had about 150,000 employees in 2016.

Even while they celebrated their partnership, Cannon and MacLennan pointed to obstacles their industry may face from a stressed agriculture economy. Record and near-record harvests in recent years have lowered commodity prices and put pressure on farmers.

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“If the ag economy isn’t healthy, that’s not good for anybody,” MacLennan said.

Meanwhile, the two advocated for the United States to stay a part of the North American Free Trade Agreement. The United States, Canada and Mexico currently are renegotiating NAFTA and President Donald Trump repeatedly has said he may pull out of the agreement.

“We just shouldn’t throw the baby out with the bath water. ... Trade should be a top priority for this country. We shouldn’t start down the path to protectionism,” Cannon said.

l Comments: (319) 398-8366; matthew.patane@thegazette.com

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