−− Adapt to “tropicalization”, serve Brazilian farmer, and together feed the world
Jul. 22, 2020
Latin America’s crop protection market has grown steadily as rising populations have led to greater food demand, and is now said to be nearly US$14 billion (approximately 25% of the world’s crop protection market).
With the bottlenecks in domestic growth and strong demand in the emerging markets, Japanese agrochemical manufacturers are simultaneously consolidating their operations and making strategic shifts to penetrate in Latin America to strengthen profitability.
1. Could you briefly introduce the business of your company in Latin America?
Wey: IHARA is a Brazilian company with Japanese shareholders. IHARA is a research and development company that has been providing solutions for Brazilian agriculture for 55 years, a sector in which it is recognized as a source of Japanese innovation and technology, as a brand that has the credibility and trust of its customers. The company has a complete portfolio of fungicides, herbicides and insecticides totaling more than 60 products, collaborating with farmers, in order they are able to produce more, with better quality and sustainability.
Our headquarter, formulations and synthesis plants are all located in Brazil in the city of Sorocaba, São Paulo State. On this site, we formulate both patented and some off patent fungicides, insecticides, herbicides and biopesticides, producing more than 60 different types of formulated agrochemical goods that we distribute 100% in Brazil, serving Brazilians growers, dealers and cooperatives.
Besides this, IHARA also has one R&D center in Sorocaba, and two more research centers under construction, one in Mato Grosso state and another in Paraná state for field trials, as well as six distribution centers spread around Brazil.
2. What kind of favorable policies do Latin America countries have for foreign-funded agricultural enterprises to invest domestically?
Wey: It requires considerable work on registration, tax, compliance and market expertise to run a business in Brazil. Compared to the rest of the world, local policies are very strict and well regulated.
I would say that the quickest and safest way to invest in Brazil would be through a partner with local distributors and developing the market together through strategic alliances.
3. In your opinion, what are the advantages for Japanese companies in Latin America? What challenges have you met in terms of actual market development?
Wey: Together, the Japanese R&D companies that are part of IHARA are developing more new active ingredient technologies every year than any other company in our segment. This is our greatest advantage, because it means that our company has access to many different and promising new active ingredient technologies, helping us to build a strong R&D portfolio and bringing innovation to Brazil. In addition to our R&D portfolio, it is important to mention that we complement our portfolio with off-patent products too.
The biggest local challenges are the Brazilian registration system and the “tropicalization” of active ingredient technologies, meaning to adapt a new active ingredient technology to the tropical weather, local diseases, unstable exchange rate, collection and local policies.
4. What is the competitive situation in Latin America's agrochemical industry? What is the market position of companies with Japanese corporate backgrounds in Brazil, Argentina and other Latin America countries?
Wey: Competitiveness in Latin America, especially in Brazil, is a key-factor in survival. Brazil is the biggest agrochemical consumer of the world, meaning that farmers are always demanding competitivity, quality and on-time delivery.
IHARA is 55 years old, with solid background and reputation, being the major channel for Japanese manufacturers to Brazilian farmers. Our goal is to serve the Brazilian farmer, so together we can feed the world.
5. What is your development plan and prospect in the local area?
Wey: IHARA has an aggressive plan to launch new patented active ingredient technologies and new mixtures and strategic compounds for years to come.
Since 2017, IHARA has been launching more than 20 new products in the market, ensuring our constant growth and notability in the market.
As part of our expansion and growth plan in 2019, IHARA opened our first Asian office in Shanghai, due to our good and expanding relationship with Chinese manufacturers.
With their support, our off patent products business is also growing strongly and constantly every year. Our presence in China and our relationship with new suppliers are increasing considerably, and our goal is to double the volume of our business in the next three to four years.
This article was initially published in AgroPages '2020 Latin America Focus' magazine. Download it to read more articles.
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