Sigma Agro: Seizes Opportunity, Steadily Expands Argentine Market
Jul. 3, 2020
Director of Sigma Agro
Sigma Agro SA is an agrochemical company based in Buenos Aires, Argentina, and since inception, they have been devoted to providing the best quality products to the market and the most attentive service to the farmers.
Jeronimo Araujo, Director of Sigma Agro, told AgroPages in an interview that the company has been growing fast in these two years. They have achieved 50% sales growth in 2019 and are expecting a significant increase again this year. Inspired by the company's good performance, Araujo feels more confident in moving forward with the projected growth he drew up for the long-term development of Sigma Agro.
Please briefly introduce the history and current development of Sigma Agro, including its major markets, major products/services, the company’s scale and market position.
Sigma Agro, from the beginning, was always based on service. We offer a wide palette of products that we seek to enhance and highlight with our services. We are going through the third stage of our growth projection in the Argentine market. The first was based on entering the industrial market to make our own formulations at our plant. The second stage, recently completed, was about covering the entire Argentinian territory with our sales force to grow in different areas and achieve commercial expansion.
Today, the third stage proposes that we strengthen the foundations of the company, deepen our relations and seek the development of new technologies to offer new solutions to the agricultural producer. So, that is what we are at. Our recipe has always been teamwork, respect, responsibility and efficiency with the focus fully on the client.
What are the marketing strategies for your company’s key products?
Our key products are mostly herbicides, and within these, we have built an aggressive strategy looking for a big market share of paraquat as the top formulator plant in ARG.
As the second step in this strategy, we focused on clethodim, 2,4-D, fomesafen and dicamba. With the forecast we have for 2020, we expect to achieve the top-five market share in the mentioned products.
Speaking about insecticides, we used to be strong in Chlorpyrifos 48 EC, and last year, we received the registration of Lambdacialotrina 25 ME and Bifenthrin 25 ME, thus providing more solutions to our dealers.
Sigma Agro developed fast those years and also had its own formulation factory. What is the production capacity and output?
Sigma Agro was born as a service company and as a broker through our registrations and the strong relationship with Chinese suppliers. Then we decided to invest in a formulation plant which allowed us to provide more efficient service to our clients.
After the development of this unit, we launched our B2C business which was powered by the competitiveness of having the formulation plant.
Our total capacity is around 25 million liters, divided into seven formulation lines. Last year, the volume was 13 million liters and the forecast in 2020 is 16 million liters, including Sigma Agro and clients.
Among our clients, we have multinationals such as Ruralco (Red Sun’s partners), Gleba (belong to Anasac) and local companies such as Bayasacal, Lanther Quimica, Agroinsumos ByL, Philagro, Insuagro, Laboratorios Peyte and others. However, we are in negotiations with some other multinational companies interested in formulations with us.
What's your view on Sigma Agro's self-owned brand? How can one balance promoting self-owned products and distributing products of multinationals?
What we want to communicate with our brand, besides the quality, is the service that surrounds Sigma Agro always seeks excellence in customer satisfaction. We are a local brand and we strongly believe in the ARG´s progress and have faith in it.
We believe that our branding strategy was successful because currently our brand is well known in the market and much sought after by farmers, but we have a lot of work to do in terms of brand positioning. What we seek is to create trust in the farmers to demonstrate that they can trust us both as a company and as a product.
Argentina’s agrochemical companies have seen quite a lot of turbulence in 2019, with all kinds of mergers, acquisitions and bankruptcies. Distributors are also involved in pesticide technicals importing and purchasing. How do those issues affect your company? What are your short and long-term plans?
During the past years, we noted some movement in the market as you said. Honestly, it was a big opportunity for companies such as ours to occupy the gap left by others, and also because of the decision by some to decrease their participation in the market.
As I said before, all those movements allowed us to increase our turnover by 50% in 2019. The forecast for 2020 is the same as last year, so we are expecting to reach US$55 million.
Our target now is consolidating the work we have been doing during the past years, reinforcing the relationship we build with our clients, taking advantage of our different business units, import, formulation plant, R&D and sales.
For the future, besides the consolidation of the company on the market as one of the main local own brands, we want to offer new technologies to our clients to make their businesses more sustainable and profitable.
How many distribution channels does your company have?
Our sales structure is divided between 10 sales agents distributed in the main production areas. Today, Sigma Agro has more than 350 clients focusing on a VIP segment called “Comercio Amigo” that represent 70% of our sales that concentrates on 30 big clients.
What is the biggest opportunity Sigma Agro faces in 2020? What will be the biggest threat you probably have to meet this year?
This year will be the third from a strategy of market access planned in 2017. The big opportunity we have is to keep consolidating this plan once we achieve it, so we can move forward to the next stage of the strategy.
Talking about the threat we face this year, we are following closely the financing issues that can appear in China and Argentina due to the global economic crisis deepened by the COVID-19 pandemic. We are also expecting our new government to soon release details about the debt with the International Monetary Fund.
About Sigma Agro SA
Sigma Agro from the beginning was always based on the service. We offer a wide palette of products that we seek to enhance and highlight with our service. We are going through the third stage of our growth projection in the Argentine market. The first was based on entering the industrial market to be able to make our own formulations in our own plant. The second stage, recently completed, was about covering the entire Argentine territory with our sales force to start growing in all the different areas and achieve a commercial expansion. Today the third one proposes us to strengthen the foundations of the company, deepen our relations and seek the development of new technologies and be able to offer new solutions to the agricultural producer, that's what we are at. Our recipe has always been the teamwork, respect, responsibility and efficiency with the focus fully pointed at the client.
Bautista Araujo Muller
+54 911 61294375
This article was initially published in AgroPages '2020 Latin America Focus' magazine. Download it to read more articles.
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