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Interview series 1: Argentina - strategic market for multinationals – interview with FMC Química Argentina
Jul. 23, 2020
The Argentinian agro-food sector has grown and innovated remarkably in the last three decades, driven by technological change and, over much of the period, by high international agricultural prices. Agriculture is the country’s main exporting sector and an exception in terms of performance.
Argentina has been suffering from an economic crisis in recent years. Nevertheless, we have noticed something unexpected during the tracking of the dynamics of the agri-inputs industry in Argentina. In recent years, multinationals have always maintained their attention and investment intensity in the Argentine market. What made these companies focus on this market even under an unstable economic environment is a question we are very curious about. To this end, we contacted some leading companies in the agri-inputs industry to discuss together and received positive responses from FMC, BASF, KWS and Rotam.
Here below is the FMC part, we will put the other interviews online successively.
Can you give us a brief introduction of your business in Argentina?
FMC Southern Cone Business Leader
Ademilson Villela: Argentina is an important market for FMC due to strong demand for our technology portfolio and significant changes we have made to improve our market access, both of which are delivering on our expectations.
What has been the overall situation of Argentina's agri-input industry in recent years?
Ademilson Villela: Argentina is one of the world’s major exporters of agriculture commodities including soybeans, wheat, specialty crops, and beef. The crop protection market in Argentina has been growing at around two percent per year, with a steady demand for new technologies across all crop types. The use of innovative product offerings helps farmers to increase yields and improve the return on investment in their fields.
There are no notable recent policies or regulations that have had a significant impact on the agrochemical industry in Argentina.
Despite the economic downturn in Argentina, overseas companies have still been seeing some investment activities in Argentina recently. What do you think are the main reasons that Argentina can attract investments from overseas companies? What are the favorable policies that Argentina offers in attracting these overseas investments?
Ademilson Villela: Argentina has more than 40 million hectares of arable land that produce high-quality commodities to supply both domestic consumption and the export market. These factors attract investment to Argentina and allow for growth in the crop protection industry. FMC is well known as a leading technology provider in Argentina and farmers are interested in the innovations we offer.
In the fourth quarter of 2019, FMC performed very well in Latin America, led by strong growth in Argentina. What are the reasons for the growth? Why is FMC optimistic about the Argentine market? What are the company's development plan and key businesses in Argentina?
Ademilson Villela: FMC has made significant changes in recent years to improve market access in Argentina. This means more people in the field and a more complete network of regional retailers that help us deliver products to growers. These distribution partners have grown with us, reaching more and more growers with our technologies. The growing demand we have seen in the recent seasons is a result of this expanded reach to growers. In the first quarter of 2020, FMC reported double-digit yearover-year growth in Argentina driven by demand for insecticides.
In the coming years, FMC has plans to introduce new technologies, including fungicides, as well as novel precision agriculture offerings to the market.
What are the significant changes concerning agricultural activities in Argentina recently? What specific development strategies will the company formulate in response to these changes?
Ademilson Villela: As one of the world’s major exporters of soybeans, wheat and beef, Argentina continues to grow and is focused on improving yield and quality to compete in the competitive domestic and export markets. However, there are challenges including currency devaluation, exchange rates and inflation that impact agriculture in Argentina.
Although macro-economic factors always pose some kind of challenge to our operations, FMC´s team has adjusted fast, ensuring the company is well-positioned to support customers through these challenges by offering a full portfolio of solutions including technical assistance, product stewardship activities and business support.
In light of the COVID-19 pandemic, what are the challenges the agri-inputs industry is currently facing? Can you predict what the industry situation would be in 2020 or the future?
Ademilson Villela: The COVID-19 pandemic has impacted all sectors in all geographies around the world. In Argentina, agriculture is considered an “essential industry” and continues to operate to produce food for both domestic and export markets. We are encouraged by the efforts that the agricultural sector made in Argentina to adapt quickly to the pandemic developments to minimize disruption to food production.
FMC Argentina has enjoyed strong growth in 2020 as reflected in our first-quarter financial results. We are confident that our technology portfolio, market access and strong grower relationships will enable FMC to continue to thrive in Argentina. As part of an essential segment that continues to advance, we do not stop either.
This article was initially published in AgroPages '2020 Latin America Focus' magazine. Download it to read more articles.
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