With direct imports of products formulated in countries such as China and India, the Brazilian company AgriConnection has grown strongly in the Brazilian pesticide market.
Importers say that this strategy allows for a cost reduction of 10% to 15%, eliminating the intermediation of large input multinational companies.
According to AgriConnection, this business model is expected to take the company's revenue to BRL1.7 billion this year, a growth of 21% compared to the BRL1.4 billion earned in 2022.
Brazil is one of the largest importers of agrochemicals in the world, and sales of pesticides and fertilizers to Brazilian farmers exceed US$20 billion per year.
AgriConnection's founders, Flavio Mata, Evaldo Carvalho, and Daniel Dias, already had extensive knowledge of the market after working for giants such as Bayer, Corteva, Dow AgroSciences, Bunge, and Coonagro, among others.
From left to right: Flavio Mata, Evaldo Carvalho, and Daniel Dias
According to Flavio Mata, the idea of being an "industry without a factory" came when they saw that it was possible to "promote a direct connection between input manufacturers from large supplying countries," such as China and India, and consumers in Brazil.
Daniel Dias, chairman of the board, stated that the company has become a marketplace with a sales force, logistic services, and financing alternatives in the central agricultural states of Brazil.
Retail input networks such as Lavoro and AgroGalaxy are among AgriConnection's clients, and the company usually directly reaches large-scale farmers with over 3,000 hectares.
To strengthen financing operations for customers with "harvest payment terms," another common practice in the Brazilian market, the company launched its fund, where XP is an advisor, which has already raised BRL100 million and could reach BRL1 billion.
AgriConnection has 62 sales representatives in the field, which is expected to increase to 80 by 2024.
Next year, the company plans to start operating with fertilizers from Russia and Morocco, but also produced in Brazil, in addition to other segments of agriculture beyond grains, such as sugarcane and pastures.
This year’s revenue growth expectation is driven by the increase in the planted area with grains in the country in the 2023/24 crop, which could set a record.
In 2024, with the start of fertilizer sales, the forecast is to reach BRL3 billion.
(Editing by Leonardo Gottems, reporter for AgroPages)
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