Interview with Kyoyu Agri: Contributing to agriculture without losing sight of heritage

Kyoyu Agri’s business performance has improved.

Kokone: In fiscal 2010 we saw prospects for the completion of our inventory adjustment, which we have been working on since our start in 2004. Our sales were tilted heavily toward miticides in the past but we increased our sales of paddy herbicides, resulting in a more balanced sales composition. The business environment has been tough, with the domestic pesticide market stagnant to slightly declining, but we persisted with our hands-on policy and worked hard on securing sales. As a result, we are projecting 16 bn yen ($200 mn) in sales and 1.1 bn yen in net profit for our fiscal 2011, which will end this October, both higher than a year earlier.

Would you explain how each product is doing in terms of sales?

Pyraclonil, a paddy herbicide that we jointly developed with Zen-Noh (National Federation of Agricultural Co-operative Associations), has enjoyed widespread acceptance. Launched in 2009, its initial goal of 300,000 ha of application area has already been achieved. I think customers valued its wide-spectrum weed-killing action, which includes sulfonylurea-resistant weeds, resulting in labor savings, and its safety. The application area of our Batchiri blended formulation, which includes active ingredients like imazosulfuron and bromobutide, was 130,000 ha in fiscal 2010 and is expected to reach 180,000 ha in fiscal 2011, near the top in its category. We identified Integrated Pest Management (IPM) as a future business driver, so we are actively promoting our microbial pesticides, natural-enemy pesticides and internally developed Ecopita gardening insecticide. But the spread of IPM requires technical instruction and experts, to tailor pesticides to the specific needs of individual farm, so I think that a new integrated approach with farmers, pesticide makers and the administration acting in concert will be necessary.

Farmers’ demand for large-volume products is increasing.

With the cultivated acreage per farmer expanding and the need for cost reduction rising, large-volume products are popular, especially among Zen-Noh customers. We began by packing our large-volume products manually but introduced an automated facility in our Yamagata factory in 2009, the first in the industry, while increasing the number of items and volume handled. Making the decision to proceed with the capital investment amid severe business conditions was difficult, but this facility has boosted us into the market-leading position for large-volume products.

What is your management outlook?

Compared with multinational pesticide and seed manufacturers and the top domestic companies, our scale is small, so seeking uniqueness is important for us. Tracing our history, we embody the DNAs of five companies and have the sales routes of Zen-Noh and trading companies. These strengths should be reflected in our management. We welcomed 16 freshmen last year and 13 this year. I would like to foster our young employees so that they contribute to the development of Japanese agriculture through pesticide use.

Source: JCWeb