Exploring the Development Path of Local Agchem Companies

Most of local agchem companies in Latin America are operating conventional bulk agrochemical products. They provide strong and efficient field support to local farmers and maintain their market share in the continuing growing market of Latin America. Apart from existing multinational giants and leading off-patent competitors, they have to face competition from gradual market penetration of Chinese and Indian companies in recent years. In this special issue – LATIN AMERICA FOCUS, AgroPages invited Agrofina (Argentina), Anasac (Chile) and Disagro (Guatemala) to share with their views of the current competition status and their development path.

Views of advantages of local companies

Most agrochemical products in Latin America market are off patent. Farmers are looking for the best combination of quality, price and service. Local companies have years of formulation production and registration experience, as well as deep understanding of the market and farmer’s needs. They have gained market share and realized market growth via an attractive combination of quality products and the development of its own commercial distribution network across the market, which enables them to provide excellent service and technical support.

In addition, long term investments in science, quality and technology, along with rich experience in local commercial/financial operations, enable them to provide effective and concrete contributions to the development of Latin American agriculture.

Agrofina has been one of the fastest growing companies in the local market over the last three years and it is very well positioned in the top ten ranking. Latin America market show an average growth of 9% in 2014 (Crop Life/Casafe), while Agrofina had an outstanding 56% sales increase in the same period.

Agrofina: “Agrofina has one of the most comprehensive registered product portfolios in this market and it is ranked among the top five agrochemical companies in the local industry. Within our varied product portfolio, we have several products ranked in the top positions of their categories. The development of our business is heavily relied on R&D investment. We study and select the best technologies around the world, and develop customized solutions to meet the local farmers’ needs. Agrofina is the only crop protection company in Argentina having the ability to synthesize and produce complex active ingredients and formulate corresponding products, as well as to develop a full set of data for registrations.”

"We have built a sophisticated R&D lab to support the company’s leading quality control efforts. The R&D laboratory is one of two in Argentina that received GLP certification from OECD. Another advantage is our own distribution and commercialization network, with strategic located stores crossing throughout Argentina to meet just-in time order requirements. Each store is remotely monitored from the Company’s headquarter in Buenos Aires to ensure our services to our customers are on a timely fashion. Our sales team maintains longstanding relationships with leading regional distributors and local farmers.”

ANASAC is a Chilean company present in 17 countries, with over 60 years of experience in diverse industries and markets. Forestry and agricultural business, specifically crop protection, is ANASAC's major area.

Anasac: “Our products are registered and distributed in most Latin American countries. Such products are distributed through our subsidiaries in Chile, Argentina, Peru, Colombia and Brazil as well as through our business partners (Mexico, Guatemala, Honduras, Nicaragua, Panama, Dominican Republic, Ecuador, Bolivia, Paraguay and Uruguay), working every day with our team in each of those countries. As a result of active investment plan, along with renewal and maintenance of assets, we have different formulation plants now, which allow us to maintain our recognized quality seal in each of the products that leaves our facility.”

Disagro: “We market bulk agrochemicals like glyphosate, paraquat, 2,4-D and mancozeb. We have built strong and well organized distributor chains in many countries in Latin America, which supports our technical personnel to provide strong assistance to farmers in each market we participate.”

Views of market competition status

The agrochemical market in Latin America is conventionally divided by three groups in terms of market supply. Each of these groups is well individualized from each other and allows us to understand and analyze the market. The division corresponds to the first group is multinational companies, which provide the market with “brand” products and integrated solutions. The second group consists of trading companies, which import formulated products ready for sale. The rest of companies import raw materials for local formulation, registration and sell.

In recent years, a new group of players are emerging in this market besides the above three conventional groups. An increasing number of companies from China and India have been gradually expanding the formulation exports and infiltrate into the supply chain terminal in Latin America, which bring new competitions and challenges to local companies.

Anasac: “Anasac is a company that has and will continue seeking cooperation with local agrochemical companies, multinationals as well as competitors. We truly believe that cooperation is a key element to maintain a successful value chain. ”

"China certainly has some advantages as a supplier of agrochemical products. Therefore, we established our own offices in China and founded a joint venture with a Chinese company to develop and export our portfolio products with our hallmark. Our focus is to develop with our clients the different solutions, and provide customized products to farmers. Comprehensive solutions that contribute to the success of our business.”

Disagro is a Guatemalan company who supplies agricultural inputs in the region that includes Central America and Colombia. Disagro offers complete portfolio of agricultural inputs, including: agricultural fertilizers, crop protection products, animal nutrition products, agricultural and agro-industrial machinery and equipment.

Disagro: “A lot of companies from China and India are entering Latin American market through low-price based strategies, which usually work in a short term. When small farmer uses cheap and inefficient products, purchased with limited resources, it may be their last chance to produce during that particular season. Responsible companies, such as Disagro, do offer competitive prices and take quality as a big asset for their products. Suppliers should facilitate data to register new products, stand behind product quality and business terms, and keep clients informed regarding market tendencies without speculation practices.”

Future development path

When talking about the future development path, it is necessary to first take some analysis and prediction about the market environment where the companies are operating. It is difficult to generalize when referring to Latin America. Each country has its own features and different realities. To understand these realities, it is essential to identify the different elements that influence the growth of the agrochemical market. These elements include the necessary investments to keep developing the agricultural industry, incorporating technology into small farmers and regulatory stability to obtain product registrations.

Market analysis reveals that the use of products with less environmental impact and lower risks for users will be an increasing trend. Companies must understand social and environmental changes to maintain higher growth rates, adapting their products to the real needs of the farmers and the society. Agrochemical market will continue to have a sustained growth and it is considered to be an important factor to maintain the productivity of agriculture.

Anasac: “We tailor our solutions to local realities by constantly renewing our product portfolio. Our corporate vision is to support the growth of our customers through sustainable and value-added solutions, constantly. We believe these are the key elements to keep growing and maintaining a healthy business in Latin America.”

"We are in a continuous pursuit of providing value-added solutions to the farmer. Through our technical-commercial support and R&D investment, we seek alternatives to the products that are or will be restricted in their use.”

"We are a company that provides support and trust to our customers by committing ourselves with the economic, social and environmental development of the communities and markets in which we participate. We work on products and solutions to satisfy our clients needs and we assess them in the correct use of the technology. We position ourselves as strategic partners, creating long term of confidence, respect and mutual benefit with our clients.”

Agrofina: “We take R&D as an important factor in our business since the farmers need to increase their yields based on intelligent decisions. We are working on the path to become a company that is able to develop specific solutions for the domestic market.”

Disagro: “We will continue to provide our clients a combination of technical support and outstanding products/ solutions.”