Costa Rica Rimac: Formulators with registration, production and distribution resources will become important strategic partners

Date:04-29-2021

The economic development of Costa Rica is among the best in Central America and is one of the countries with the highest level of agricultural modernization in the region. It enjoys the reputation of "Garden of the Americas". Its banana production ranks first in the world and its export ranks second. The country is also with the highest level of education in Central America region. Costa Rica has taken full advantage of its strong scientific research capabilities. 

Besides the above favorable factors, the registration process for plant protection products in Costa Rica is long and difficult. In addition, the vertical integration of multinational companies in Central America and the Caribbean region in recent years has also affected the local companies. 

Recently, we invited Mr. Juan Carlos, the Board Director of Agroquimica Industrial Rimac, SA (Rimac), a local formulator and distribution company in Costa Rica, to conduct an interview. In this article he introduced the unique agricultural environment in the country, the business situation of Rimac, and also shared his views on current market trend.

Juan Carlos Lara, Board Director of Agroquimica Industrial Rimac, SA (Rimac)

AgroPages: Please introduce the development history of Rimac S.A., as well as its main business, production and other key information.

 

Juan Carlos: Agroquimica Industrial Rimac, S.A. (Rimac) was founded in the early 1970’s to provide formulation services to multinational companies, as well as formulate its own products for local sales. Over the following years, Rimac experienced steady growth until the late 1990’s, when it started a restructuring process that will lead to a significant increase in the number of formulated products, new registrations and innovations, as well as open up to external markets in Central America and the Caribbean.

 

Today, we have four different plants that are all located in Costa Rica, which specialize in formulating herbicides, fungicides, insecticides and, most recently, plant nutrition products with foliar fertilizers.

Our herbicide plant is fully automated with a production capacity of 10,000 liters per hour, through using the latest technologies available in the market. Recently inaugurated, it has significantly improved our production process.

 

Our new plant nutrition facility, which has a significant capability to formulate specialized foliar fertilizers, utilizes state of the art technology.

 

Our other plants have different capacities depending on the products we formulate.

 

We are best known for our high-quality products that we endeavored to supply over many years, looking for the best raw material suppliers from different countries, but mainly China, India, the United States and some European countries. Our governance team has continued contacting suppliers, multilateral agencies and those in charge of regulating the industry, to maintain our leadership that has been recognized by many.

 

Our R&D department has continually improved our products and created innovative mixes, as well as other products that require less application doses while offering the same results and are safer for the environment.

 

Our plants were designed to provide maximum security for our employees and the environment, for which we have several certifications.

AgroPages: Please introduce the agricultural characteristics of Costa Rica. What are the main crop diseases currently facing Costa Rican agriculture? How does RIMAC develop pesticide products that are adapted to local environments?

 

Juan Carlos: Costa Rica has a good geographical position with access to the Atlantic and Pacific oceans. Climate conditions in Costa Rica are mainly tropical with a significant amount of precipitation while having only two seasons, the wet and dry seasons. We have several microclimates that permit the cultivation of a wide variety of crops. These microclimates offer many advantages, such as having zones with a reasonable amount of rain all year-round, adequate sunlight and fertile soil, as well as areas with lower precipitation levels but have irrigation systems developed by the government.

 

Our main export crops include pineapple, bananas, sugar cane, coffee, African palm and vegetables. There is also an extensive area for pastures anda wide variety of other crops produced in Costa Rica.

 

Some of the main diseases include Sigatoka, Phytophthora, anthracnosis, fusarium, nematodes, erwinia and mildew (roya), as well as a variety of different insects.

 

Our R&D department has developed products to help farmers decrease the chemical load of pesticides. With significant reductions on dosage and products that are friendlier to the environment, we help protect our ecosystems.

 

We also developed an educational program for farmers using a mobile classroom that travel around the country, which provide instructions and teach the best practices in the use of pesticides.

 

We are making a difference through our social responsibility programs that are an integral part of our culture.

 

AgroPages: In the crop protection market in Central America and the Caribbean, what competitive advantages are offered by Rimac compared to its peers?

 

Juan Carlos:  We have several advantages over our competitors, but clearly the most important is the quality of our products. We have streamlined our procurement process of raw materials, which are the best in the market, and price is not the most important element of our selection process, bringing excellent results in terms of quality, which is reflected by better products, that together with our exclusive formulations, enable farmers to decrease the chemical load on their crops.

 

Rimaxato is the commercial brand of our glyphosate-based herbicide. The product has been evolving through an improvement process that has taken it to another level, and its application has attained the best results while having a minimal effect on fish when applied in zones with canals and rivers.

 

I am also sure that our mobile classroom teaches the best practices to farmers, which will benefit their crops and the environment.

 

Our culture, which prioritizes quality, the environment and our people, has marked us out from our peers. We are also keen to share as part of our core values while having an ongoing relationship with our peers, as we know that we can all work together to benefit farmers, the environment, our communities and our countries.

 

AgroPages: In recent years, Costa Rica has frequently issued various pesticide prohibition and restriction policies. In addition, the EU has recently lowered maximum residue limits in some exported agricultural products of Costa Rica. What impact will these have on farmers and their pesticide application? As a leading local pesticide company, how does Rimac help farmers deal with this issue?

 

Juan Carlos: Without a doubt, there have been many restrictions on products that will have a direct effect on major export agricultural products. Mancozeb is the latest and will certainly affect banana exports. There are other threats, such as Fusarium 4, which can potentially have a major impact.

 

Costa Rica has many agricultural advantages but has a severe disadvantage in terms of the registration process for new pesticides. For many years, government agencies in charge of the registration process have been slow and usually unwilling to facilitate agricultural production, as registering new molecules and related products has been difficult or close to impossible. This has negatively affected the environment, as new and more effective molecules that could reduce the chemical load on crops cannot be used.

 

Therefore, it is not only the threats we are facing from external parties but also from internal parties that create challenges for companies in our sector.

 

As part of our core values, sharing has become a significant factor to assisting farmers. We are in the process of sharing the use our technologies and our registration certificates with our peers, to offer farmers new products that they may not be authorized for use.

 

AgroPages: What is the current usage and acceptance of biological products in Central America and the Caribbean region? Has Rimac incorporated some in its product portfolio?

 

Juan Carlos: Biological products are part of our mid-term strategy. We invested with Universidad de Costa Rica (UCR) in developing biological products to treat mildew in coffee (roya) and for ant control. Regretfully, we have been slowed down by the registration process in Costa Rica.

 

Recently, we began developing a biological product to control flees and mites that is completely of biological origin.

 

Although the development of biological products is expensive, their control effect is not yet as effective as other products. So, I think that the incorporation of these products as best practices to maintain high yields of production has a long way to go.

 

Our nutrition plant aims to produce products that will enable farmers to control diseases and plagues, by improving the health and strength of their biological assets. In the short-term, we have achieved very positive results.

 

AgroPages: As a formulator, have you felt the recent fluctuations in prices and production of pesticide technicals supply? Will these affect the company's overall procurement strategy?

 

Juan Carlos: Raw materials are procured mainly from India and China, but also from the United States and Europe. Price fluctuations have been a significant factor, along with transportation costs.

 

The transportation costs of formulating companies, such as Rimac, have had a direct impact, but not as severe as for companies that import formulated products. This situation recently created a significant advantage for our pricing models, as we do not have to pay for the transportation of water and imported formulated products.

 

In terms of raw materials, we maintain an excellent relationship with our suppliers. Even during tough times, like what we experienced in 2020 and probably also in 2021, these relationships are what really count. Having sharing as a core value has created many good friends, long-term relationships and cooperation agreements, which are significant elements of our core strategy.

 

We also utilize statistical models and market and correlation analysis related to specific benchmarks, which are very useful to understanding price variation fundamentals.

 

AgroPages: With the vertical integration of multinational companies in the industrial chain, we have seen that some distributors in Central America had been incorporated into multinational groups. How do you see this trend and what will be the impact to local market?

 

Juan Carlos: We have also seen a consolidation of companies in Central America. Some multinationals are acquiring distributors to integrate vertically. I do think that this affect many companies. However, we need to analyze some of the market’s fundamentals to understand this phenomenon.

 

Transportation logistics are a global disruptor. Importing formulated products is significantly more expensive than formulating locally in many instances. Acquiring local entities that are distributors may not mitigate this risk. Formulating companies with adequate capacity, quality and registrations also need to be a component of the strategy. There are not that many companies that are formulators with the capacity, quality and variety of registrations.

 

Synergies from mergers are not always desired. Smaller companies may have a better grasp of the market, especially when they are well known, as well as maintain quality in what they do, and have the contacts to sell their products.

 

The world may be moving towards a different model than the one created by globalization. It may well be that we will see more protection from governments in the future and witness the presence of risks associated with global trade disruption due to differences in ideologies.

 

In my view, adequate relationship between multinationals, such as Rimac and larger global companies, can create synergies and relationships and mitigate related risks. Managing risk has become a significant factor and establishing risk strategies through strategic alliances is something we are working on.