Poland Agri-distributers: Consistently built partner and advisor strategies based on close farmer relationships are crucial to success

Global Agri-Input Distribution Market Observation

Editror’s note: The interview column of ″Global Agri-Input Distribution Market Observation″ was firstly published in 2023 Market Insight magazine. The interviews covered different types of markets including developed economies and emerging ones.

In this column, we are aiming to gain an in-depth understanding of the current development trend of the global agricultural input distribution market and analyze its characteristics of different markets, providing reference for industry participants.

Poland Agri-distributers: Consistently built partner and advisor strategies based on close farmer relationships are crucial to success

Poland is an important agricultural production country in Europe. In recent years, due to the influence of geopolitical factors, the overall development of agriculture in the region has not been stable. Local agri-input distributors have steadily improved supply chain management, farmer consulting services and bio product lines. 

In this feature, Patryk Podołowski, Development and Production Director & Board Member of Chemirol sp. z o.o., the core of Polish agricultural conglomerate Chemirol Group, talked about some of the recent uncertainties and challenges facing Polish agriculture and agri-input market, as well as how Chemirol, which has been rooted in the Polish agri-input market for more than 30 years, maintains its innovative activity to lead the entire market.

• Agriculture commodity prices unstable due to geopolitical factors
  

• High inventory levels for manufacturers and distributors, price competition in focus
  

• Using microorganisms to aid agricultural cultivation becoming a trend
  

• Paying attention to influence of agricultural opinion leaders
  

• Polish agriculture will enter an era of digital innovation
  

Patryk Podołowski

Development and Production Director & Board Member of Chemirol sp. z o.o.

Please introduce the structure and development history of Chemirol, and its business and market position in Poland.

PUH "Chemirol" sp. z o. o. (Chemirol) has come a long way from a local plant protection products wholesaler to a leader in comprehensive agricultural services and a specialist in crop management consultancy in the Polish market. During the past 30 years, we first paved the way and then built lasting relationships with farmers. Today, Chemirol's business covers most farms in Poland, and it enjoys farmers' growing trust and a high brand recognition.

The company currently employs over 1,000 qualified staff, and its network of branches spans the entire country. We are proud of the fact that as a company, we are now an integral part of the Polish agricultural landscape, proven by the awards and distinctions Chemirol has received. In 2023, Chemirol was awarded the title of Sustainable Agriculture Leader by a prestigious local media outlet.

The Chemirol Group includes, among others the following subsidiaries:

• PUH "Chemirol" sp. z o. o. - The head of the group

• Innvigo sp. z o. o. - Manufacturer of plant protection products

• Unia sp. z o. o. - Manufacturer of agricultural machinery
  

• A.T sp. z o. o. - A certified unit specializing in the research and development of plant protection

Chemirol and the entire group leverage the complementary capacities of the agro-industry to fully meet the needs of Polish farmers. Chemirol's strategy focuses on researching and providing solutions that enable satisfactory yields based on individual conditions across regions and soils. New products introduced by Chemirol, whether crop care solutions or expansions into other agricultural services, are the outcomes of listening to farmers' needs and collaborating with research units.

What is the overall situation and company performance of the Polish agri-input distribution market in 2022 and H1 2023? Facing uncertainties of product supply, price, and so on, how does Chemirol draft procurement strategies to cope with these challenges?

Polish agriculture has been facing the consequences of geopolitical changes over the past two years. On one hand, we have unstable commodity prices, and on the other, changes in agricultural prices are unfavorable for farmers.

As a result of a break in supply chains, there were disruptions to the availability of products. To ensure that farmers have the final product available, producers of plant protection products and distributors have filled warehouses, resulting in a high stock levels, and the market considered this movement negatively. In addition, unsatisfactory buying-in prices have reduced the purchasing power of farms, which directly translated into smaller purchases.

Also, unpredictable weather changes have disturbed the rhythm of the use of many products. Changes in terms of diseases or pest pressures have shifted purchases, which in turn only complicated the situation in distribution channels. 

This situation caused an intense competitive struggle that mainly affected prices, which proved to be ineffective a tactic. If farmers have already bought protection measures, they will not buy more despite low prices without being sure they will use up their stocks.In addition, unstable purchase prices with a clear downward trend have significantly cooled the keenness to invest in new technologies, such as biostimulation or biocontrol. 

Therefore, Polish farmers face increasingly limited financial resources, whereas producers and distributors of pesticides are dealing with high inventories.

Historically, 2022 was a very good year for distributors in Poland. The 2023 season is different and more complex. Still, we have one more quarter and we will see how the entire sector and individual companies will cope with these perturbations.

Chemirol focuses on quickly responding and adapting to the current market situation and consistently improving the quality of its agricultural advisory. With Innvigo, which is part of the Chemirol Group, we can be sure that our supplier of plant protection products approaches issues related to supply and storage in a professional manner based on a win-win strategy.

We are also sure that Innvigo delivers not only a product of proven quality, but also in quantities based on an in-depth analysis of market potential. Innvigo, as a related company in the field of supply chains with markets in Asia, has access to a global reservoir of raw materials, which gives us confidence that we can provide Polish farmers with the products they need on time.

Currently, the European market faces external pressures such as the EU Green Deal, less available compounds, and frequent extreme weather conditions. What specific impacts have these factors had on your business? How does Chemirol continue to help local farmers improve their efficiency against this backdrop?

Responding to shrinking natural resources and other challenges, Chemirol embraces the rich potential of microbiology to provide alternative solutions focused on optimal resource management. Following this direction to introduce innovative, every revolutionary solutions exemplifies the great responsibility Chemirol has undertaken since its establishment.

The introduction of BlueN is one example. By enabling plants to absorb nitrogen from air, this microbiological product optimizes mineral fertilizer consumption. Numerous studies and field experiments in recent years have confirmed the effectiveness of solutions based on products like BlueN®, Bakto ProFOS, BaktoKompleks and Bakto G-stop.

The targeted use of microorganisms is quickly becoming a standard agricultural practice,e.g., with nitrogen-fixing properties.With confidence, I can say that microbiological solutions enable higher yields while reducing fertilizer use (BlueN) or utilizing soil minerals through previously inaccessible biochemical forms (Bacto ProFO).

Within agriculture and the wider economy, supporting the continuous development of farmers is a priority and part of Chemirol’s mission. Our CSR project, ″Way to the Record,″ exemplifies this commitment by providing proprietary agrotechnical solutions. The program covers various crop management methods, from sowing preparation, variety selection and plant protection to habitat control, fertilization and foliar nutrition. Through the program, we have helped clients achieve multiple individual yield records and two national records, including sugar beet in 2022 and winter rapeseed in 2023.

Have there been any changes in the concentration of the Polish agri-input distribution industry in recent years? Compared with multinationals, what are the key advantages of local distributors in market competition? 

Concentration is a natural development stage across industries, including Polish crop protection distribution. Concentration unlocks benefits unavailable to fragmented companies, such as increased bargaining power, risk sharing and new growth areas.

As mentioned, Chemirol is the core of the Chemirol Group. We consistently leverage complementary capabilities across the agro-industry to provide comprehensive services for Polish farmers. Concentrating agribusiness elements into one business system is a thoughtful and continuously implemented task.

Regarding distribution, Chemirol provides agrotechnical consultancy and delivers means of production, such as fertilizers, seeds, crop protection and microbial solutions to Polish farmers. The group conducts required field testing for registrations via A.T. Grain, and oilseed purchasing is also managed by Chemirol.

Chemirol’s most significant organizational advantage is its dynamism and courage to implement new solutions, which translates into a competitive edge. Streamlined decision-making, openness to agricultural innovations, and individual leadership traits allow quick and effective responses to business changes. I can confidently say that Chemirol’s greatest asset is our people, who are passionate about agriculture and driven to action.

When making purchasing decisions on agricultural supplies, what factors are Polish farmers most concerned about? In your view, what is the biggest challenge when introducing a new product or technology to this market?

Numerous factors determine agricultural purchase decisions, including standard considerations such as pricing, delivery terms, quality and brand. However, I would highlight reliable, quality farm consultancy as most important. For more than 30 years, Chemirol has consistently built partner and advisor strategies based on close farmer relationships and comprehensive, up-to-date knowledge.

Building a new product category in agriculture is a formidable challenge, managing the process from conceptualization to market launch and establishing purchase repeatability. Changing habits and stereotypes ingrained in agricultural practice over generations is an interesting topic. Polish farmers are particularly attached to accumulated traditional knowledge, though likely true across nations. Of course, opinion leaders who tend to be more open to new products only account for a small percentage. Getting agricultural influencers on board as heavy users is the critical first step. However, the key to success is convincing the majority that trusted advisors, as mentioned, play an essential role.

Compared with the Americas, digital agriculture in Europe progresses slower. In your view, what is the outlook for the Poland market in this area? How will it impact local distribution industry transformation?

There are economic areas where Europeans lead the global change, but there are also those where they have slower technological advancement. Digitization, automation, AI adoption and predictive analytics are natural development stages for agriculture. I predict accelerated change in Europe in the coming years, especially in Poland. Poles lead globally across many computer science fields. In 2022, nearly 94% of Poles had internet access, and the pandemic demonstrated our capacity for quick, flexible actions. In my view, Polish agriculture will also swiftly enter the digital age. What are considered innovative solutions today will become commonplace standards.

lf you want to share your company story and your understanding to the market, please contact Mickey Shan at: mickey@agropages.com

This article was initially published in AgroPages' '2023 Market Insight' magazine.