Jebsen & Jessen: Development strategies of market access and people-oriented
Jul. 28, 2017
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“From my point of view, today, market access is the key for success. Our business is, luckily, a people business and not based on e-commerce. It is essential to have a good team that is accepted and respected by distributors and the fruit companies,” said Dr Felix Thuerwaechter, Managing Director of Jebagro GmbH, in an interview with AgroPages. Meanwhile, he also shared his views on Jebsen & Jessen's successful philosophy, product series, business model, as well as core competence etc.
Q1. Could you please briefly elaborate on the development general situation of Jebsen & Jessen in the Latin American (LATAM) agrochemical market?
Jebsen & Jessen has a long tradition in crop protection in Central- and South America. Due to the successful business, we decided to form a new company. This is Jebagro. The aim of Jebagro is to bring more focus to crop protection and to develop better solutions for our business partners.
In South America our focus is on the traditional functions including supply chain management and supplier credit. We see an increasing demand in such service. Cash flow- and stock management is a challenge for many companies, especially in times were agriculture is under pressure.
In Central America and the Andean countries cash flow management and stock management are a solid part of our portfolio. Several years back we have started registering own products for this region. At the beginning of this year we have acquired a package of registrations. To complement the portfolio we are offering trace element fertilizers as well. So, in terms of portfolio we have a full range in this area. In order to improve market access, Jebagro has acquired the majority of the shares of Grupo Agrosol. Grupo Agrosol has excellent market access and is serving the market from Panama. As of July 01st Grupo Agrosol was renamed in Jebagro Panama. Market access has become one of our core competencies. As a result, we are in negotiation with several companies for distributing their products.
With these acquisitions and our own development, we have become a full service provider.
Q2. Could you please also talk about your company’s product series in LATAM?
Our key business in South America is sourcing, supply chain and supplier credits. The decision on products is taken by our customers.
In Central America and the Andean countries our focus for product development is on the key crops such as rice, maize, fruits and vegetables.
For the time being our portfolio is basically consisting of standard post patent products. These are the products that are required in the market. However, we see changes in technology. Farmers are looking for better solutions and products with a better toxicological and ecotoxicological profile. For our development products we are focusing on such solutions.
Globally we see an increasing influence of NGO’s into the food chain. This has an impact on crop production. In example, food companies monitor residue levels to a point beyond the requirements from governmental registration authorities. We are considering this, when developing new products and solutions.
Q3. What about the business model and competitive advantages of your company in LATAM?
With regards to entrance barrier we have to respect patents, we need registrations and need to have market access.
In the last 5 to 10 years many companies have invested in registrations. To some extent you can say the market is oversupplied with standard products.
From my point of view, today, market access is the key for success. Our business is, luckily, a people business and not based on e-commerce. It is essential to have a good team that is accepted and respected by distributors and the fruit companies.
For newcomers it will be very difficult to enter the market based on organic growth and own development. It takes years to build up an interesting portfolio and to find the right people. For new entries it will be very difficult to enter the market without acquisition.
Our industry is a people business. In order to be successful you need to have excellent access to your customers on all levels and you need to understand their needs. You have to speak the local languages and you have to understand cultural differences.
Several Chinese and Indian companies try to directly enter the markets, some with more success than others. I believe we can do a good job for these companies. Our proposal to our suppliers is, to develop partnership models rather than competing.
Q4. What opportunities and challenges will it bring to Jebsen & Jessen under the background of high consolidation in agricultural inputs?
Why do R&D companies have 75 percent market share (on global level) when 70 percent of active ingredients are off-patent? Besides trust in the brand, the size of the sales force is one reason. Now with the consolidation, the involved companies increase both, portfolio and sales force. This gives them an advantage.
But we also have to consider that mergers always bring uncertainty into the market. Distributors might get new contact partners, the sales force changes, the involved companies are reviewing their portfolios and might have a new focus on their products. Logistics and IT systems might change and so on. This can be an advantage to smaller companies. At least for the first one or two years.
Also smaller companies can be more flexible and adapt faster to the needs of customers.
For Jebagro the aim is adapt to the needs of our customers and business partners rather than to force them into what we have to offer.
Q5. What is your vision for Latin America agrochemical market?
In Latin America you have both: some mature markets and some growing markets. The multinational companies have a tendency to focus on the larger markets, while local companies are more present and have larger market shares in the smaller markets.
I believe the markets will still enjoy growth. Especially Central America and the Andean countries have good opportunities for growth. However, the introduction of GM crops and crop prices will have an impact on the market.
With regards to our future, we want to be seen as both; a provider of business solutions that helps our partners managing cash flow, stocks etc and secondly, as a provider of better crop protection solutions.
We hope that we can grow faster than the market.
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