Interview series 4: Argentina - strategic market for multinationals – interview with Rotam Argentina

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 Rotam part, click the links on the right side to read other interview articles.

Can you give us a brief introduction of your business in Argentina?

Sebastian Gentile: Rotam was founded more than 50 years ago with two main business units: food retail and life sciences; this last one remains as a core business and investment focus with Crop Protection and Veterinary consolidated under Rotam Cropsciences. With headquarters located in Hong Kong, Rotam has developed a global mindset which strengthened the company presence in more than 70 markets around the world. 

Rotam Argentina is a key player and contributor to the company, being part of the top 5 subsidiaries worldwide. This year, in our local branch we´re celebrating our 15th anniversary. With a clear focus on our customer's needs, we´ve developed a complete portfolio to provide the best solution, from an agronomic perspective. Our technical and marketing team is continuously thinking and bringing new ideas, to offer an efficient solution for the current concerns that farmers are facing; but with a clear focus on future issues that will come.

The complexity we have regarding weather conditions, pests' pressure and weeds development in the fields, creates a perfect environment for our local team to build up a clear model to handle and treat the different crops; and all this know-how is a great asset for other regions. 

What has been the overall situation of Argentina's agri-input industry in recent years?

Sebastian Gentile: The agricultural sector represents a great contributor to our country´s economy, with 60% of share over the total exportations balance, and around 10% contribution to the country´s GDP. As a consequence the agrochemical industry plays a key role in providing the best technology to the farmers to be able to maximize their production, considering that the total productive hectares have remained stable during the past years. From a global perspective it´s well known how important this sector will be to provide food, and its complements, to a fast-growing population. In this regard, we must accept that this is a great opportunity but also a greater responsibility to do it in a sustainable way. In connection with this, we´ve made a significant progress in launching more “green” products, and also the full industry is actively involved in a plastic/packaging recycling program, with an important collaboration between government and strategic private participants.

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?

Sebastian Gentile: Argentina has much strength to be considered as an attractive country for companies to invest: in the past years, the yield per hectare increased to a very high level and also climate and fields' conditions are really propitious for the different crops.

In addition to this, farmers keep on using more technology and are willing to introduce new molecules that can help them produce with more efficiency. In Rotam, we value this kind of high-tech-user mindset and the company is bringing new products/mixes/ recommendations to fulfill their needs. With a high investment on research and development we secure a solid pipeline of post-patent technologies, from a global perspective, but with a local view which is driven by our Business and Development team.

We learned that your company has been making great efforts to introduce new crop protection products and solution to the market. Why are you optimistic about the Argentine market? What are the company's development plans in Argentina?

Sebastian Gentile: We consider ourselves as a customer-driven company, and by doing this we accept that the only way we have to consolidate our market access is by offering not only products, but also value. Thus, our portfolio building strategy runs on this basis: to provide the best solution to the farmer, in every moment he/she needs. 

As a consequence, we launched more than 10 products in the past 3 years that is putting us in a very attractive position not only for the farmers, but also for the dealers' network. Some important products to mention are: Tuken^® that is a pre-emergent herbicide that controls "amaranthus" and other important weeds, on soybean, corn and sunflower. We also launched Sulfomet^® as a key herbicide for long fallow with a unique chemical mixture of two different herbicides in a same granule. 

Apart from the presence we have on extensive crops, we´ve also identified some opportunities on different niche markets, like peanut, bean, potato, cotton, etc. In some of them, we keep an important share with a wide portfolio. On this regards, Rothalonil^® is a well-positioned fungicide on peanut and potato, and provides high resistance to rains, based on its sticker property.

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?

Sebastian Gentile: Our industry has been declared as an "essential activity" since the moment COVID-19 reached our country. This put us in a preferential position, but with an enormous responsibility on how to secure the regular agricultural process without taking any risk from people/ health side. To be declared as an essential activity is a great symptom that shows how important our activity is, especially in such a difficult time as the one we´re transiting. 

This pandemic, put all of us in our homes and pushed us to redefine our communication line with the customers: we switched from massive meetings, field days, 121 discussions and negotiations, to online communication and interactive relationship, without any learning process in the middle. The way all the different participants could adapt to this new concept and still be productive and with a long-term view, even with a high complex economic environment, makes us feel very optimistic about the situation of our industry for the current year.

This article was initially published in AgroPages '2020 Latin America Focus' magazine. Download it to read more articles.