Interview: Adama executive assesses release of agchem imports in Argentina
Date:07-25-2017
The Vice President of Adama for Latin America, Carlos Danilowicz, has a regional market in charge, without accounting Brazil, that represents US$350 million over a revenue of US$3.1 billion that the company had last year.
In the past, the executive has worked at companies, such as Monsanto and Glencore.
From his current position at Adama, he highlights the recovery of farmers after the government measures, but alerts that the activity of companies in the field is under a complex situation to adapt to the more competition due to the growth of imports of agrochemicals, especially to compete with terminated products made in China. Read his interview given to the Argentinean journal La Nación.
Which is the vision that the company has of the agricultural business in general?
Carlos Danilowicz (CD) – What we are seeing is the change with the removal of export taxes in the major grains and reduction in soybeans, which we believe has helped producers in the business a lot, as they are required to be efficient and work adequately. This is mostly in the rented field scenario, where one has to have coherence at the time of paying the rent. We see a recovery of farmers that is translated in more use of technology and improvement in the payments chain.
How are the agchem suppliers coping with the situation?
CD – In our view, we see a situation that is a bit more complex. The competitive level that we face is strong. New players have been incorporated in the sector and this forces us to develop more skills, to be more efficient in the moment of gathering structure and managing all costs to keep investing and be competitive.
So, what perspective do you have for the rest of the year?
CD – We have a conservative year; we believe the market is similar to last year or with a slight growth. There was in the last few years a strong drop in prices and has not yet recover. There were decreases of 10% to 40% in the last 18 months. This favors the producer, but it gets to levels that are so low for profitability that it complicates our business.
Why are prices falling?
CD – For several motives, in part because we came from a very restricted market in terms of imports to a market where imports are free. Besides, obtaining registration is not that hard like other countries, so the players can join easily.
This situation with the importation has favored you or not?
CD – In one part, it has favored us to have a quick operation, which is predictable, without so much doubt about which product to have or not. But I believe that the competition has been excessive and there wasn’t a gradual release of imports. My vision is that there should be more gradual change between the excessive control of the previous administration to this new administration. It helps that things succeed gradually. New players arrived with important ambitions. The majority brings terminated products. Those are recognized companies from China and from India. They participate very aggressively in the sector with different costs and this forces us to be a lot more efficient, which is good for all, but sometimes discourage participation in some products.
The wave of mergers and purchases at the global level is an opportunity or a threat?
CD - The mergers are opportunities. In joint ventures, there are companies that have to split part of their portfolio and there are opportunities to acquire more products or lines. It also brings opportunities for people. There are already reductions in structure and valuable people are being forced out and we are looking into this too. We see more opportunity than other things.
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