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Promise of Adama: Simply. Grow. Together.qrcode

−− Interview with Chen Lichtenstein, CEO of Adama

Nov. 5, 2014

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Nov. 5, 2014

President and CEO of Adama Chen Lichtenstein told AgroPages of the reason of brand transition of Adama and the company’s ambition in Chinese market.

How much do you think the fast growing Chinese market will contribute to Adama's growth plan? In which aspects Adama will continue the advancement of the key strategic initiatives in China? What’s the current cooperation status between ChemChina and Adama since latest stake acquire in 2011? Do Adama and ChemChina have plans to develop further cooperation in marketing development in China?

Our vision is to transform farming in China, becoming a leader in China’s rapidly growing $4.8 billion agrochemical market. We expect to be the first global player with an end-to-end platform in China, connecting R&D, manufacturing and sourcing capabilities in China with global markets. 

Chen Lichtenstein was appointed President and CEO of Adama in February 2014.  Chen joined Adama in 2006 and most recently served as its Deputy CEO in charge of China Integration, as well as President and CEO of the China National Agrochemical Corporation (CNAC), Adama’s parent company and a strategic business division of ChemChina. In these roles, he has been integral to expanding Adama’s global footprint. Prior to that, Chen established and ran the Company’s Global Resources Division, integrating all global operations including manufacturing, supply chain, procurement and R&D.
In 2011, China National Agrochemical Corporation (CNAC), a strategic business division of ChemChina (China National Chemical Corporation), acquired 60% of Adama. Following that acquisition, Adama was offered the opportunity by ChemChina of acquiring and integrating certain of its relevant agrochemical businesses into Adama. Accordingly, we recently announced the acquisition of several of CNAC’s businesses in China, including a significant stake in Hubei Sanonda and a group of companies located in Jiangsu Province (Jiangsu Anpon, Jiangsu Maidao and Jiangsu Huaihe). The acquisition will add approximately $850m to Adama’s annual revenues. These assets will provide us with a strong foothold in China, through which we will become the only integrated China-Global crop protection provider in our industry. We believe we will transform into the most competitive, differentiated, largest off-patent crop protection provider worldwide.

The Chinese agrochemical market has massive, untapped potential. By aligning with ChemChina, one of the largest State Owned Enterprises in China, we expect to be uniquely positioned among the multinational crop protection companies to take advantage of the China opportunity.  The CNAC companies provide an initial foundation to establish a strong domestic distribution platform in China and become a leading agchem distributor in the Chinese market.

The brand transition of Adama should be a big impression on the industry this year, could you please introduce the main reasons for the transform and its strategic significance to the future growth of the company?

Over the past several years, our senior management has been engaging in a comprehensive review of the Company’s strategic direction, through working groups in all of our regions, and at every level of the Company. Through this process we developed our vision for the future growth of the Company, a major part of which is to focus on our end-users, the farmers, and to understand their needs. This drives our farmer-centric approach to business, and is what we call “Putting the Farmer First”.

As we articulated this vision and approach across our global platform, we realized that a new, single, global brand was necessary.  Until now, Adama has been represented across the world by more than 20 different company names, and hundreds of product brands. We needed to have a single, unified name, to reflect that we are, in fact, an integrated global company, with a strong identity, driven by our promise to customers and employees to “Simply. Grow. Together”. The new brand “Adama” is an important component in our strategic and business evolution and an opportunity for us to tell our story to our stakeholders.

Which areas are the main key markets for Adama and what kinds of main product portfolios are supporting the good performance?  What is the growth strategy of Adama in the future?

Part of what distinguishes Adama from most of our competitors in the crop protection space is our very broad geographic diversification.  This means that our performance is less dependent on any particular country or region than others that are more focused on particular regions, and are therefore more exposed to major swings, whether positive or negative, in regional performance from season to season.  Having said this, our strongest growth so far this year has been in Latin America, primarily attributable to the Brazilian market. In Brazil, we have put a strong focus on increasing our proximity with farmers, and we are seeing very pleasing results. For example, in 2010 we did 300 field days and demo areas. In 2014, we will complete the year with more than 4,000 field days. We also have a highly structured Go-to-Market approach, with segmented sales teams that are building consistent relationships with dealers and farmers. 

India has also been a strong performer for us. In India, we have increased revenues tenfold in just five short years, establishing Adama as one of the top three crop protection companies in this very important market. Our approach is to get as close to the farmers as possible, and this has helped us to introduce 80 new products that are specific to the Indian market and which simplify the lives of farmers by helping them to efficiently address the challenges they face.

Strong markets in Europe include Germany and Poland. In Poland for the past three years we have been focusing on approaching farmers by segment, with segmented marketing activities for each. We also have a very clear channel approach for distributors and retailers, and we have rolled out loyalty programs for our stakeholders: distributors, retailers, and growers.

In Germany, Adama is growing faster than the general crop protection market. We are fourth in terms of market share, and we are continuously gaining market share. This growth is due to a combination of factors, including, of course, strong local leadership and a cohesive team that has been able to transform the organization to fully address the farmers’ needs. 

The new brand Adama, which was introduced to bring simplicity to farmers and farming, reflects the farmer-centric focus of the business. Could you please introduce in more details how you design and reconstruct the new business models in terms of product lines, commercial platforms and customer demands? Any significant changes against the old business models? What are they?

We have comprehensively restructured our approach to enable us to develop and deliver solutions that address some of the most urgent problems farmers face. We are utilizing our global expertise and 'farming ecosystem' to address market-specific agricultural issues. We are also helping enable farmers to focus on growing, simplifying the process; and being available to farmers as a resource. 

Part of the delivery of our promise – Simply. Grow. Together. – is through the simplification of our products into two distinct umbrella product ranges. This transition is from hundreds of product brands. Our new clear and useful brand design gives farmers practical orientation and support, e.g. through color-coding of product types, as well as innovative and practical packaging. 

We are rolling out new products based on new formulations, unique mixtures and some novel molecules. For example, NIMITZ™, which recently received EPA approval in the USA is a safer, simple and effective nematicide that reduces environmental and human impact. We are proud that it is the first new chemical nematicide to be developed and introduced by any crop protection company in more than 10 years and represents a new class of chemistry for plant protection.  

Another focus area for us is the digital realm. Going digital means more than using digital devices to access the information around us, it is also about how we, as a society, take that information in and leverage it. In our world that means smart agriculture, and using digital applications and devices to make farming simpler, and also to bring together stakeholder communities. 

What kind of resources does Adama hope to integrate from this generics company into Adama's new business? Does Adama have more expansion plans through acquisition in the fields of biopesticide and agriculture biotechnology in the near future? 

We do not comment on speculation in the market regarding potential transactions. However, generally, the increased market interest in companies in our space in recent months (e.g. Chemtura, Agriphar, Cheminova transactions), reflects the positive underlying fundamentals that drive our industry – food scarcity, emphasis on improving crop yields and strong industry dynamics in the off-patent sector. We are, of course, always open to new market possibilities, and are continuously considering and evaluating potential transactions that would provide us with incremental value or competitive advantage. 

Does Adama have plans to step into GM crop field in the future? How Adama will fight for market share with those companies who provide the portfolios of agrochemicals and seeds, to ensure the sustained growth of the company?

Currently, we are focused on growing our business, especially in China, and tapping into the vast potential of agrochemical sales. We do look into complementary and novel agricultural technologies that meet the needs of our customers. However, our sustained growth is expected to be a result of our own strategic goals, and maintaining our focus on our core business.

 

 

Source: AgroNews

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