Strategic partnership between Agriconnection and Globachem: Enhancing supply chain efficiency and exploring new opportunities in the Brazilian market

Recently, Agriconnection, a Brazilian agricultural input distributor, and Globachem, a Belgian agrochemical company, held a grand strategic partnership launch ceremony in Shanghai, China. Over 150 partners, suppliers from China, India, and globally were invited to witness the beginning of this in-depth collaboration, which has attracted significant attention within the industry.

The partnership between Agriconnection and Globachem began in 2022, with the cooperation scale continuously expanding over the years. The substantial business growth in 2023 led both parties to deepen their collaboration in 2024, forging a closer strategic partnership. Today, Globachem has become Agriconnection's second-largest supplier and its most significant commercial partner in Brazil.

Daniel Dias (left), Board of Directors of Agriconnection, and Koen Quaghebeur (right), President of Globachem

Agriconnection, as a top market access company in Brazil's agricultural sector, offers strong market expansion capabilities with its nationwide business network, efficient distribution, and top-tier sales team. Globachem, on the other hand, brings rich product development experience, holding new products and innovative, high-quality formulations, especially those targeting resistance and dual/triple mixtures, which perfectly complement Agriconnection's product needs. Through this cooperation, Agriconnection can enhance its product development and registration capabilities, while Globachem can leverage the former's well-established Brazilian market channels to gain a foothold in the local market. The mutually beneficial situation is evident, and both parties are well-prepared for future fierce market competition.

In addition to business expansion, another crucial goal of the cooperation is to optimize the procurement process. Globachem has been actively engaged in procurement cooperation with Chinese suppliers, through its AgroAmigo office in Hangzhou, led by Pedro Rosa. As the collaboration deepens, both parties have decided to integrate and upgrade the procurement process. Moving forward,  AgroAmigo with the support of Agriconnection will take charge of the procurement for both companies, utilizing its global procurement network and extensive experience to further improve supply chain efficiency. Agriconnection will focus on market expansion and customer relationship management, leveraging its keen market insights and strong sales capabilities to better meet customer needs and increase market share.

During the launch ceremony, AgroPages conduct exchanges with Daniel Dias, Board of Directors of Agriconnection, and Koen Quaghebeur, President of Globachem, to explore the core strengths of both companies and their insights into the current dynamics of the Brazilian agricultural input market and the challenges faced by the agricultural sector.

AgroPages: Could you introduce the foundation and opportunity for the decision to deepen this cooperation?

Daniel Dias: Since its establishment in Mato Grosso, Brazil, in 2019, Agriconnection has been committed to becoming the most efficient market access company in Brazil's agricultural sector, striving to build a solid bridge between the market and producers. Our business covers the entire country, with a rich and highly competitive product portfolio, while maintaining low operating costs and asset requirements.

With the continuous growth of our business, Agriconnection needs to further enhance its capabilities in product development and registration. Globachem, although possessing high-quality products and relevant certifications, lacks market access resources in Brazil. The cooperation between us will complement each other's strengths and enhance our competitiveness in the market.

Globachem's products are of high quality and advanced in concept, with their dual and triple mixtures and anti-resistance products highly in line with the needs of the Brazilian market. Agriconnection, on the other hand, has profound professional capabilities in sales and market development, and we have a deep understanding of farmers' needs. For Globachem, Agriconnection is the ideal partner. Therefore, both parties have decided to join hands and seize market opportunities together.

Koen Quaghebeur: Globachem, a Belgian family business established in 2000, has always adhered to the philosophy of supplying safe food and bio-based raw materials to the world with the smallest environmental footprint, and has been deeply involved in the field of crop protection. For over two decades, we have been dedicated to helping growers optimize yields and maintain crop health, focusing on the development, registration, and international promotion of a series of innovative crop protection products.

Ten years ago, we began the product registration process in Brazil. To gain a favorable position in the Brazilian market, we realized the need for deep market insights and a forward-looking approach to develop products specifically for the local market. As Daniel mentioned, we have not only developed dual and triple mixtures but will also introduce new active ingredients to the Brazilian market. Moreover, we are about to launch the first bio-based products in Brazil, which will have the same efficacy as chemical products. The bio-products we are developing will match the efficacy of existing chemicals. Therefore, our products can not only extend the lifecycle of existing chemicals but also effectively manage resistance. In the future, we will introduce more products, including a multi-site insecticide and fungicide, to help farmers better address pest problems.

AgroPages: How does Agriconnection efficiently help manufacturers enter the market and serve Brazilian agriculture?

Daniel Dias: In the context of deepening globalization, the strong industrial capabilities of China and India are gradually emerging. We are creating opportunities for Chinese and Indian companies to directly enter the Brazilian market. We have a profound understanding of the market and can make decisions and registrations more quickly. In just five years, we have achieved significant results. I firmly believe that through cooperation with Globachem, we can do even more.

In the past, multinational companies invested heavily in the research and development of new active ingredients, but such investments have significantly decreased in recent years. However, pests, diseases, and weeds continue to evolve to protect themselves. In the absence of new active ingredients, we have to develop old products and product combinations to create new solutions to combat pests and weeds. This is what we aim to do through our cooperation. 

We can utilize the existing active ingredients in the market to provide excellent solutions for farmers and focus on marketing to encourage purchases from farmers. The cooperation between Agriconnection and Globachem will eventually become an important business model for Brazilian farmers and the agricultural market.

AgroPages: How does the financial crisis of large Brazilian agricultural input platforms affect other distributors, and how does Agriconnection deal with the pressure of long payment terms?

Daniel Dias: The recent collapse of some large agricultural input platforms has not affected us. Instead, it has led some customers who previously relied on these platforms to turn to us. These platforms had invested heavily in opening numerous stores, mistakenly believing that an increase in the number of stores would lead to booming business. However, this approach not only failed to bring the expected benefits but also caused farmers to spend unnecessary money on products they did not need. In stark contrast, Agriconnection has always adopted a face-to-face business model, which effectively reduces operating costs. Since its inception, Agriconnection has steadily advanced its business according to its established strategy, winning market recognition with its reasonable prices and efficient operations. Ultimately, the market values reasonable pricing, the ability to take orders and deliver goods on time, and the capability to effectively address planting and crop issues— these are the most fundamental and important requirements.

Another major reason for the collapse of Brazilian companies is the significant price fluctuations during the COVID-19 pandemic. The sharp rise and subsequent drop in prices led to substantial losses for many dealers due to high-cost inventories. Price stability is crucial, and avoiding such extreme fluctuations benefits everyone. When buyers purchase goods beyond their sales capacity, it leads to a large accumulation of high-cost inventory. Once the market prices drop, it creates significant problems. Agriconnection adopts a back-to-back business model to minimize inventory accumulation as much as possible.

The long payment cycles in the Brazilian market were initially caused by multinational companies. When these large corporations first entered the Brazilian market, they took advantage of the weaker financial capabilities of small companies and offered long-term financing in their payment methods as a marketing strategy. Now, it has become almost impossible to change this practice. Under these circumstances, we have no choice but to comply with the market. We actively apply for Chinese export credit insurance limits and frequently request increases. On the other hand, we also apply for credit from local Brazilian banks to ensure sufficient limits and seek credit support from relevant institutions in China. Although the long payment cycle is a problem, it can also be seen as a market barrier to some extent.

AgroPages: How does Globachem understand innovation?

Koen Quaghebeur: We have our own development team in Europe, focusing on the research and development of new chemical and biological molecules and other innovative products. We prefer  developing our own compounds because the complexity  of using other people's products is too high, and the selection process is costly. The limited number of new molecules we can launch is due to the high cost and lengthy selection procedures. Therefore, we focus on our own new molecules.

In the context of the previous wave of mergers and acquisitions among multinational companies, global R&D capabilities have declined, leading to a lack of innovation. We have always been committed to innovation and the development of new products. We are pleased to see that Chinese companies are actively developing new active ingredients and providing new solutions for the market. Seeking new modes of action is a common dream for everyone, but it is not easy. We share the same dream of developing products with new modes of action for the market. Currently, we are launching a multi-site product in the Brazilian market, which will bring new solutions to local agriculture.

AgroPages: What challenges and future prospects does Brazilian agriculture face?

Daniel Dias: Resistance management is crucial. Brazilian agriculture holds an important position globally. With the increasing demand for animal and plant proteins, Brazil, as one of the world's major agricultural producers, also sees a continuous rise in the demand for crop protection products.

In recent years, biomass fuels have gained attention as an environmentally friendly solution. For example, the Brazilian government recently announced that the ethanol blending ratio in gasoline will be increased to 30%. Sugarcane can be used not only for sugar production but also for ethanol production. In addition, according to Brazilian law, the soybean oil blending rate in diesel for trains, ships, and vehicles should reach 20%, which is aimed at protecting the environment. Agriculture is the key to solving issues related to clothing, food, shelter, and transportation, and Brazil is working hard to expand its production capacity.

As a tropical country, Brazil does not have winters, and low temperatures usually help control certain diseases. Most areas in Brazil have two cropping seasons a year, so we need chemical and biological solutions to deal with pests and diseases; otherwise, it is impossible to further expand agricultural production capacity.

Koen Quaghebeur: Due to resistance issues and climate change, new agricultural diseases are constantly emerging, making it urgent for agricultural production to seek new solutions. Take soybean rust as an example; this is a severe disease, and we need to develop new products or use product combinations to address it. However, developing new products is time-consuming and costly. In comparison, using key ingredients or generic product combinations is a more feasible strategy. Although Chinese companies have proposed some new solutions, the process from discovery, field trials to final commercialization often takes more than ten years and requires huge investments. The purpose of investment is to achieve real progress, but if the solution does not perform well in the final application, then all efforts may have to start over. Therefore, truly good products do take time and continuous effort to refine.

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