HELM：Positive transformation and rapid response to address challenges in the industry

Date:03-21-2018

Editor’s Note：“Year 2017 has seen the start of a transformation for the company – we have strengthened our organization to sharpen our focus and provide a platform for growth for the next several years,” said Nick Read, executive manager, crop protection product management at Helm, in a recent interview with AgroPages. He also shared his views on the impact of merger and acquisitions (M&As) and consolidations in the agri-input industry, and Chinese government's environmental regulatory policy on HELM and the agrichemical industry, as well as the company's countermeasures and future development plans.

1.  Could you talk about your company's performance in 2017 and major operational highlights?

2017 has been a successful year for HELM’s crop protection business. We foresaw some of the challenges, planned accordingly, and have beaten our expectations on a global basis. The channel inventory situation in Brazil is a challenge, but this has been off-set by growth in other regions of the world. The dramatic increases in prices and availability issues in China are, of course, difficult to manage, but our long-term strategic relationships with our suppliers and our collaborative purchasing behavior has paid off, allowing us to continue to serve our customers in these difficult times.
                                                                       
Year 2017 has seen the start of a transformation for the company – we have strengthened our organization, which will sharpen our focus and provide a platform for growth for the next several years.  We have launched 12 new products this year in the regions that we operate in, have further expanded our pipeline with unique value propositions that will come into the markets pending regulatory timeframes, and initiated a regional expansion program that will allow us to service customers in more areas around the globe.

2. What do you think of the M&As and high consolidation in the agri-input industry in 2017? What impact has it had on your company?

Consolidation has never stopped in the agri-input industry. The latest consolidations will result in the biggest companies we have ever seen. These companies will take advantage of their scale and ability to invest in R&D efforts, offer complete portfolio solutions, and access strong distribution channels already established in almost all markets. But these structures usually require different authorization levels and have limitations in areas of development, which results in a more complex decision-making process and creates a higher level of bureaucracy.

With a lean company structure and family-company values, Helm can develop closer and deeper relationships with the distributors over multiple years. We maintain flexibility and have a fast decision-making process to take advantage of the dynamics of this business.

Distributors and large-scale growers are increasingly lacking the clarity on who they can rely on for their product supply. We offer continuity in that respect and are able to provide security in the knowledge that HELM will continue to exist and operate in this manner for many years to come.

3. In 2017, the Chinese government implemented more stringent environmental regulations toward the agchem industry, which resulted in tighter supply and raw material scarcity. What impact do you think will it have on your company and the global agchem industry in the short and medium terms?

The improvement in the environment and safety performance of the entire manufacturing industry is an overdue necessity in China, and in the short-term this will provide both challenges and opportunities. Some of the global markets have not yet responded to the increased cost situation, and so the margin squeeze is impacting everyone in the channel, from the growers to the production companies. The availability constraints are a concern that will also pressurize the supply chain, but the companies that are successful in securing a product at the right time can see significant market share gains. The relationships and collaborative spirit that HELM has in both the up and down-streams of the business will be an advantage in this respect.

In the mid to long term, we expect to see a significant shift in the sourcing strategy of many companies in the industry. China, today, produces a significant portion of the world’s crop protection products and will remain a key source of products in the future, but other regions will see increasing investments to provide an alternative option to avoid similar issues in the future. 


4. Could you please talk about the development planning and the future vision of your company?

We have created a new Portfolio and Project Management team based in our headquarters in Hamburg, Germany, which is focused on pipeline expansion and the execution of the processes, to ensure we can sustainably bring new product solutions to the market at the right time. This team has a combined experience of decades in the industry and its business development counterparts in our country’s organizations are screening numerous opportunities to identify and develop the right solutions for our distribution and grower partners to ensure success for us all.  We are also collaborating with companies across the industry to accelerate the development of our portfolio and our market access, so that we can provide these solutions in the most effective and timely manner. This requires a high level of trust. Our family-company based values and long-term focus provide this very security that our strategy and approach will not change due to natural or abnormal fluctuations in the market.