HANSEANDINA to be present with B2B concept in more than 20 countries in 2023 globally
Jul. 24, 2017
“Our vision is to be present with our B2B Concept in more than 20 countries in 2023 globally,” Jan Onnen, Head of Hanseandina Group, told Agropages in a recent interview. Meanwhile he also shared his views on HANSEANDINA's development general situation, product series as well as business model etc.
Q1. Could you please briefly elaborate the development general situation of HANSEANDINA in the Latin American (LATAM) agrochemical market and its business model?
HANSEANDINA is privately owned and was originally founded in 2008 in Colombia. Today the Headquarter is located in Reinbek in the north of Germany. From the beginning the decision was taken to respect be loyal to the traditional supply chain model, which exists in that market and this is one of the keys to what HANSEANDINA is today. We are a B2B-Company and we sell all of our products on CIF Level to the Importing Pesticide Industry, cooperating as our distributors with Off-Patent Multinationals and Local Big Importers, which means, that we work without an own local distribution network. We started doing it like this by trading commodities such as Glyphosate, Butachlor, etc. to importers in Colombia and today we follow the same B2B strategy, but with our property registrations of innovative combination products, own branding concepts, advertisement & marketing support, local technical service & training to our importing Distributors.
For the markets we are active in, I think that generating data and holding a registration to secure sales is maybe important, but in the scenario of saturated channels, overload of brands competing for the same planted areas, my expectation for the coming years is, that having the supply chain and know how to prevent the risks of local distribution in order to get to the farmers is even more significant.
We hold on to our B2B Vision, teaming up with loyalty with strong importers and to penetrate through their distribution network with our innovative products and technical advice. Going one step down the supply chain does not make sense to HANSEANDINA, as we are good and confident in what we are doing.
Q2. Could you please also talk about HANSEANDINA’s product series in LATAM?
Due to the different climatic zones in our markets, we have focused originally on Coffee, Corn, Tomato and Rice, but obviously have worked on Potato, Peanuts, Export Fruits and Veggies. We have launched our innovative combination products for the mentioned crops such as specific Lepidoptera Insecticides, Broad Spectrum Insecticides or even a specific Insecticide for Whiteflies and Sucking Pests, but also a Fungicide for Leaf diseases and one for Botrytis. All of them are always based on two active ingredients, which allows us to give an added value to the farmers in regards to knock-down, days of control, Resistance Management, controlled MRLs, this added values will improve their earnings.
We plan to launch 2-3 new products each year, therefor we have our own Field R&D Team located in Colombia which takes care about our innovative products in the pipeline, doing dose rate screening, phyto-toxicity, comparison against existing products in regards to efficacy & days control, in vitro trials and others.
Q3. Could you please briefly introduce industry changes and respective features of self-built channels and acquired channels?
Every 3-4 years things are shifting in our markets, starting with the Mergers of the Big R&D Companies, Acquisitions of Local Importers by the Off-Patent Multinationals, Entering of Asian Companies, but also companies from Peru, Guatemala, Colombia, Chile for example starting to grow their business through set up of branches with own distribution network in the neighbor countries, all these changes bring more competitors to the market, whilst the areas grown remain the same or at least do not grow significantly, so the input is more than in the consumption and this puts the local distribution channels under pressure and reduces the prices and margins of the industry, which initially is good for farmers, but on long term other negative effects may appear due to reduced margins such as missing resources to maintain a proper technical staff to give the correct technical assistance farmers may need and others.
A self built channel is hard work, you first need to convince the supply chain of your advantages, low prices may allow you to enter, but quality, portfolio and technical service are required to keep yourself in, it will be quite hard to raise prices afterwards, you may need a reasonable average Gross Margin to keep your operation running so the pricing & value strategy is of high importance, to avoid losses in the initial period.
An Acquired Channel, allows you to use the in-house know how of the market from the very beginning, continue with an existing supply chain and built the future on properly positioned trademarks, as well as an established pricing & value Strategy and profitable operation. A due diligence including a detailed analysis of the existing supply chain and bad debt is of high importance, which may result in additional hidden costs.
Q4. What do you think of the competition&collaboration from industry rivals, especially China’s agrochemical companies? What is the development planning of HANSEANDINA?
The market is full of rumors of how, when and who of the Chinese players will enter the different countries, some choose the traditional CIF Business with Financing, some giving Data support, some even set up companies to hold registrations by themselves and some go directly into the market with own brands, one of the risks and fears of the local companies is obviously, and that it is uncertain, how the Chinese players manage their pricing, but from my point of view there are many risks in each business model I mentioned before, which need to be balanced through higher margins than from their traditional technical oriented exports.
As B2B-Company we see all existing and coming importing companies as our potential partners, we look for a dialogue to make a joint portfolio gap analysis and can develop this way innovative products for each company. Competitors on B2B Level we can only out-compete by offering Added Value, like high margins to our distributors and excellent performance as a Partner, through dedicated technical & Commercial service, field days, distributor and Farmer trainings, marketing concepts and coordinated advertisement campaigns. With the market as it is today we know that delivering a really innovative product is not enough at this stage.
Companies in small and medium sized markets in Latin America, I exclude here Mexico, Brazil and Argentina, today look for growth obviously by renewing their portfolio but specially by starting in new countries. This is a signal that their traditional native markets are saturated and most probably growing the existing market share is difficult.
This tendency of more regional players in Latin America allows us to make regional agreements, which does not affect our existing local agreements obviously and is of high importance for our entrance into new markets with existing and familiar distributors. Our partners already ask us about joint plans in other markets with our innovative products. HANSEANDINAs growth will come from adding new countries & products to our range and this is not only in Latin America, but also in Asia-Pacific and Africa, where we have already set up branches and started registration work. Our vision is to be present with our B2B Concept in more than 20 countries in 2023 globally.
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