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POINT AMERICAS: Excellence in Technical Service and Strong Partnership with Chinese Suppliers
Aug. 14, 2018
Point Americas S.A.
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China |  Scot von Bergen President of Point Americas | |  Ya Su President of Milagro Chemicals |
For a long time, the Latin America agrochemical market has been tied closely to China's pesticide industry. The Chinese pesticide market constantly delivers pesticide technicals and formulations to Latin American countries, which absorb roughly 1/4 of the total Chinese pesticide exports.
From 2016 to 2017, the environmental compliance inspections of the chemical production industry, imposed by the Chinese government, caused many pesticide producers to suspend or limit their production, resulting in supply shortages and price hikes, and even decreasing international procurement activities for some time.
Recently, AgroPages conducted an interview with Mr. Scot von Bergen, President of Point Americas, which has its head office in Montevideo Uruguay and operations in many Latin American countries, together with the company's Chinese partner Ya Su, President of Milagro Chemicals. Mr. von Bergen told AgroPages, the links between him and the Chinese agrochemical industry trace back to the beginning of the 21st century, and he is amazed at the rapid development and great changes in China’s pesticide landscape. Amid this current period of supply shortage and rising prices, and thanks to the concerted effort of Milagro, Point ensured the security of its supply chain during such a crunch. In addition, Point Americas has been committed to practicing its unique developmental strategy.
Through the interview, what impressed AgroPages most is that Latin American agrochemical players and their Chinese partners are increasing the depth of their collaboration from production to technology, service, capital, and more, joining hands to crack broader international markets.
Latin America: a broad market transitioning towards green and sustainability
Latin America is blessed with a vast territory, abundant agricultural resources, and a diversified land environment, all of which make the region ideal for growing commodity products such as soybean, corn, cotton, and coffee, as well as for producing a cornucopia of fruits such as grapes, blueberries, bananas, and tree fruits like apples, pears and cherries. Notably, Latin America captures a significant share in the fruit import markets of developed European economies and the United States and are increasingly exporting to China. As a result, the agrochemical products in the entire Latin American market come in a wide range of varieties. In addition, farmers are highly receptive to new products and new technologies.
Let's take the Peruvian market, a fast-growing market recently, as an example. Peru has three agricultural production areas—the first is the tropical rain forest area, predominantly the Amazon basin; the second is the mountainous area of the Andes mountains; and the third is a desert strip along the coast, where irrigation is particularly important. Completely different crops are grown in these three areas. In recent years, the annual farmland area has been growing by an average of 10% in Peru.
Peru's crops are mostly intensive crops. The country's crop structure largely falls into several categories. The first one citrus; the second one is vegetables especially asparagus and capsicum peppers; and the third is table grapes and blueberries. Other important crops are potatoes, rice, corn, sugarcane and avocados. A large proportion of the agricultural production in Peru is exported. Agricultural production is characterized by large industrial farms, each one with hundreds and in some cases many thousands of hectares, and all production destined for exportation. So the quality standards must be very high.
Over recent years, the pesticide use structure in Peru has been experiencing a drastic change—shifting from traditional toxic pesticides to biopesticides and products applicable to organic agriculture, noted Mr von Bergen. And such a change tends to be quick. At present, Peru has huge tracts of organic agriculture land for producing fruits, including the production of bananas in the northern part of the country. Currently, biopesticides and organic agriculture inputs are essential for these large industrial farms, in the sense that they can help these farmers meet the requirements of many export markets and exporters. On the whole, agriculture operators in many South American countries are gradually shifting away from poisonous, harmful traditional pesticides and towards green, sustainable biopesticides because the consumers in the USA and Europe insist on very low pesticide residuals.
In addition to biopesticides, the market has placed a higher environmental demand on innovative chemical pesticides, having lower toxicities and more specific effects on plant diseases and insect pests. Farmers in Latin America are inclined to select plant protection products with lower environmental risks and the market is going greener and more eco-friendly, concluded von Bergen.
Point Americas: Building a bridge for product entry using technical R&D
Point Americas, an agrochemical company based in Montevideo, Uruguay and with a large operation in Peru, owns over 300 certificates of registration overall. With operations in Chile, Peru, Ecuador, Colombia, and Venezuela, Point has recently started to enter into the Mexican market. Point has experienced rapid growth in all the aforesaid countries, including Venezuela, which has notoriously stringent regulations on import & export, said von Bergen.
Regarding Point’s key points of emphasis, von Bergen stressed the importance carried by the company's logo: “Entregamos Calidad”, which means “We deliver quality”. The high quality of its products and services are of primary importance. This is what Point values most. According to von Bergen, in case of any problem or flaw, Point will replace the product without hesitation. In this way, Point assures the customers of zero risk in the product they buy. Additionally, Point offers customers a wide array of complete product types. These products range from traditional chemical pesticides to cutting-edge biopesticides and biostimulants. As such, customers can easily choose the optimal product mix that suits them best.
Scot von Bergen and Ya Su went personally into the field to see how the products worked
Intriguingly, what is it that makes Point stand out among so many local Latin American players? von Bergen boils the greatest strength of Point down to a powerful technical team that tries to get close to farmers and determine user needs, thus delivering the best solutions to them.
At present, the Latin American market is the focus of keen attention from pesticide companies across the globe. And this immense market—more than ever before—is starved for new technologies and new products. Meanwhile, many companies—including some pesticide companies from China—have an overwhelming urge to introduce their products and brands to this remote and growing market. To be successful, however, they face a lot of obstacles, among which local regulations, language and culture are the most challenging.
Latin Americans are more technically-oriented, while many Chinese companies are more commercially-driven—they care more about how to sell their products and many lack the technical information their customers want and need, von Bergen said.
For example, the products offered by many Chinese pesticide producers are intended for local crops in China, but Latin America has a different crop structure, which includes distinctive crops such as avocado, potatoes and peppers of all types. Moreover, weather and soil conditions also vary from one area to another. With an advantage in Spanish and its close proximity to local markets and farmers, Point has played a role as a technology developer over time.
The technicians from Point teach farmers how to use the product properly
Point provides end customers with access to a complete set of technical information regarding each product. Point has an R&D arm, as well as technical teams based respectively in Peru, Chile, Colombia and Ecuador. At Point, before each new product comes into the market, the technical team will conduct localized application tests for the product—including not merely testing in the lab but also targeted testing for crops in the farmland. After completing all the testing, Point will compile a product technical manual containing information such as characteristics, advantages, usage and dosage, and application technology. The technical manual will be translated into Spanish before being delivered to clients and farmers.
Many times, after obtaining first-hand feedback on the application of the product in the farmland, Point will work with its Chinese suppliers to debug and adjust the product, therefore delivering genuinely applicable agrochemical products to the market. This is best exemplified by the introduction of the products of some biopesticide companies. Due to the particularity of biopesticides, producers often struggle to figure out how to apply their products to specific crops. Point serves as a bridge that gets through the link of application to crops.
The technicians form Point help farmers to use En Vivo to control Beetle larva in roots
What’s more, said von Bergen, Point’s technicians always work closely with local dealers, particularly when they try to introduce new products into the market. These technicians inform farmers about the product's features and technical characteristics, in order to hone the farmers’ techniques in using the products, thus fully unleashing the effectiveness and potential of the pesticides and creating more economic benefits for the farmers.
Milagro: Escort of Point’s supply chain
The topic of short supply of pesticides is the hot topic in every recent exchange between AgroPages and overseas companies. The sentiment of “stopping offering and stopping accepting orders”, prevailing at the recent CAC exhibition at the start of 2018, still lingers, and still applies.
The pesticide products Point needs are sourced primarily from China. However, when we asked about the impact on Point amid this round of supply shortage, von Bergen replied that the company's pesticide supply is largely unaffected this year. How does Point manage to ensure its supply security? An amiable lady that joined us during the second half of the interview is the key. As a matter of fact, her support was indispensable for the rapid development of Point in Latin America since its inception.
And this lady is Ya Su, president of Milagro Chemicals. Milagro, based in the Chinese province of Jiangsu, has a long history of agrochemical exporting with its products sold to 30+ countries and regions. Holding the tenet of “standing high and serving details”, Milagro commits itself to delivering purchase value to its customers.
Looking back on the cooperation opportunity with Point, Su said when Point came to China for pesticides at first, Point began working with a number of trading companies and production plants. However, what was needed was a close Chinese partner who could keep him updated on the latest dynamics in the Chinese pesticide market and companies. And that company was Milagro.
Von Bergen confirmed that he was really fortunate to have found Su—a sincere lady with good word of mouth—as his ears and eyes in China. Point is by no means a pure trading company. What he has established is a solid supply chain, along which Su and Milagro played indispensable roles. With the help of Su and through perennial investments and efforts put into the supply chain, it has been possible to cooperate directly with only one factory for one product, working only with a chosen factory as the sole supplier for a product, which guarantees that the quality will always be the same high level. As a result Point and its partner factories have forged strong personal relationships and maintained firm long term partnerships. This kind of partnership, as von Bergen said, reduces commercial elements and increases mutual confidence, making the partners more like a big family. Thanks to this intimacy, confidence and trust, amid this current round of supply shortage, suppliers give priority to their partnerships with Point, whose supply of core products is virtually intact, and instead, fares well.
Scot von Bergen and Ya Su with their partners
Speaking of this, Su said currently, Milagro and Point have set up a joint venture together, called Point Agro-China, which has emerged as a purchase and liaison company in China of Point, with full authority. Point and Milagro are working in tandem, as if they were united into one company. In addition, Su stressed, enduring proximity to the most immediate market and farmers has endowed von Bergen with an exceptionally sharp market intuition, which provides its Chinese partners with the latest market information and demand, helping them to expand their product varieties and markets.
In 2018, China's environmental policy will remain tough and de-stocking in Brazil and other South American markets will take some time. However, both von Bergen and Su have absolute confidence in maintaining sustained growth. Partnerships with Point and its domestic suppliers, said Su, are just like a seed that was grown personally many years ago, watered day by day with a spirit of trust and cooperation, and has grown, blossomed, and yielded fruit.
For the current market, von Bergen believes pricing is an important consideration, but not the most important one, for a long term agrochemical business. What really counts should be building genuine partnerships. The Chinese people put a high value on emotional communication while doing business, trying to use their true heart in exchange for another true heart. “Given this, our longstanding cooperation with Chinese partners, as always, has been smooth and pleasant,” he said .
Moving forward, Milagro and Point will become increasingly interconnected. Milagro and Point have been mulling over how to integrate in a more organic manner, said Su. Going forward, Point will lead marketing activities in the Latin American market, and Milagro will take charge of the global business. Both sides will synergize and aim to become a large international company—one that competes well in markets across the globe.
Talking about the future product strategy, von Bergen emphasized that Point will concentrate and focus its efforts to develop the market for the new, low-toxicity products and biopesticides, striving to be a bell weather in this sector. As a consequence, using its technical and marketing strengths and market insight, Point will remain committed to giving full support for new and innovative Chinese-made products, and as a result it will help Chinese factories to grow and at the same time will deliver more green and environmentally friendly products to farmers around the world.
Click to download new business magazine – 2018 Latin America Focus (Bilingual edition: English & Spanish)
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