Sep. 4, 2019
By Leonardo Gottems, Reporter for AgroPages
Dario Maffei, Indigo's Vice President of the Global Markets Hedge, has a degree from Carlson School of Management and Birckbeck, University of London. Since the beginning of the year, he has been leading Indigo in Brazil as its CEO. He joined the company after a successful 16-year career at Cargill, where, until recently, he was coordinating the business area for Latin America. In an exclusive interview with AgroPages
, he reveals Indigo's current status in Brazil and the way ahead for what is considered one of the most valuable start-ups in the world.
What is Indigo's current stage of operation in Brazil?
We arrived in Brazil a short time ago and began our commercial operations this year, with our first offer in the market. We brought the concept of seed treatment biotechnology, which was also our first product in the United States. This season, we are only working with soybeans, but in the next, we will offer treatment for corn and then cotton.
Biologically treated products evolve each year after laboratory and field tests; the products we use in Brazil are still first generation, in the United States, we are already in the third. With this initial product, we have achieved a productivity increase of 4.5% compared to traditional treatments. With the product we tested for the next crop, this rate has grown to 7%-9%.
We also launched our first product developed outside the United States, Indigo Ag Finance, a digital barter solution that is simpler than those previously available in the market, without bureaucracy, working quickly and easily. It's all done digitally, and credit approval is quick. Documents are also sent digitally. Barter is already a widespread practice in Brazil, but we saw a great opportunity to improve the product and the process.
What solutions are you offering in the country?
Today, Indigo Global works with 12 different product lines. All of these will be available in Brazil in a maximum of two years. We believe in systemic change, so we want to correct imperfections along the entire agribusiness value chain, improving producer productivity and profitability, developing regenerative farming practices and, consequently, improving the quality of the end product offered to the consumer. We have Indigo Transport, which facilitates the logistics of vintage transportation, allowing the producer to negotiate online transportation from the warehouse to the destination. We have Indigo On-Farm Storage, which allows producers to segregate production to sell where they can really get differentiated value. There is the Indigo Marketplace, which helps the producer with a different offer to negotiate the product advantageously, directly with the buyer. There is also the Indigo Agronomic Services, which helps farmers apply new technologies on their farms and jointly develop new solutions from the independent agronomic consulting service.
Among our recent proposals, the biggest highlight is the Terraton Initiative, to enable the sequestration of one trillion tons of CO2 from the atmosphere through regenerative and sustainable agricultural practices. It starts with Indigo Carbon, a carbon credit market, that gives producers access to a new source of revenue, as Indigo will remunerate it for a ton of carbon sequestered. This revenue can be generated through simple and easily implemented measures, such as no-tillage, which is already widespread in Brazil. To support this initiative, we also created the Terraton Challenge, which will reward technologies and innovations, which accelerate carbon sequestration in agricultural soils. It's a kind of global hackathon where researchers and start-ups can offer solutions in three critical areas: soil carbon sampling and measurement methods, technologies that accelerate soil carbon sequestration, and innovative financial offerings that reward producers for the capture and maintenance of carbon. Winning solutions can receive grants and contracts worth up to US$3 million to implement their innovations on farms using Indigo technology.
How do you rate the Brazilian market, its acceptance and demand for Indigo solutions?
For those who come from more traditional companies, like me, it is surprising to see the acceptance of Indigo proposals in Brazil, because they are very disruptive. I believe this is due to the profile of the Brazilian producer, who is very connected with innovation and technology. We estimate that in the 2019/2020 crop, our treated seeds will be planted over 400 thousand hectares. Among customers who closed with us, almost 80% opted for our barter solution, Indigo Ag Finance. For a newcomer, this is an impressive result.
What difficulties or obstacles have you faced? And how can the country move forward?
Our difficulties are the same as those of a start-up that is just beginning. Building an innovation-based business from scratch goes far beyond a good commercial offer and a good sales force, as is the case for the traditional industry.
We wanted to make the Indigo brand known, and make the market understand our value proposition. Our business is not trivial, so I say market because it is necessary to have our value perceived by producers, trading partners, investors and good professionals who see Indigo not only as a job, but as a company, which has the possibility of being a transformative agent of the market.
What makes me very happy is realizing how receptive people are to understanding our offer. We received very positive feedback from our customers and partners, which leads me to conclude that we have more opportunities than difficulties.
The advancement of agriculture in Brazil involves the adoption of practices and technologies that allow a regenerative agriculture, which will bring about a direct increase in productivity per hectare, thus changing the industry level.
How do you expect to project Indigo in the coming years in Brazil?
We believe that the Brazilian market should become the largest one outside the United States and may account for between 40% and 50% of the total share. It is the country with the largest agricultural potential in the world, and producers are always looking for solutions to increase their profitability and allow them access to new markets. This is just where we fit in. So, our projections are very optimistic for Indigo and for the country.