Exclusive interview | Bridging industry and farmers, DVA Agro’s ″AgroAllianz″ cooperative model arrives in Brazil

Date:05-08-2024

In recent years, the Brazilian agricultural market has maintained a steady development momentum and showed some new trends and characteristics, such as the steady increase in the market share of sustainable products, such as biological agricultural inputs, the diversification of distribution channels for agricultural inputs, and increasingly fierce competition at the terminal level. 

Against this backdrop, German chemical company DVA Agro announced its re-entry into the Brazilian market under a new brand ″AgroAllianz,″ which attracted attention from readers. AgroPages recently interviewed João Aleixo, Global Managing Director of DVA Agro, who leaded the introduction of the company’s brand-new operating model, ″AgroAllianz,″ in the Brazilian market, and elaborated on the overall business development status and future plans of DVA Agro.

João Aleixo, Global Managing Director of DVA Agro

AgroPages: DVA announced that it will re-enter the Brazilian market under the new brand, AgroAllianz. Please explain DVA's decision to launch its new operating model in the Brazilian market. What strategic considerations are behind this move?

João Aleixo: The new brand is a JV with Coopercitrus (Cooperativa de Produtores Rurais), which the biggest cooperative in terms of number of farmers, with more than 42,000 in total. That also means these members have become ″owners″ of an industry of agrochemicals and specialties.

DVA has a different strategy to access the market via AgroAllianz through this JV, which will cover two-thirds of the agricultural area in Brazil while the remaining one-third will be accessed by AgroAllianz itself.

The goal of the companies is to bring rural producers into the industry and the industry into rural producers, and AgroAllianz is the genuine way of connecting the chain and extracting the benefits of this synergy. 

The aim is not just for producers to own an agrochemical industry, but also to be part of DVA Agro.

AgroPages: Why did DVA adopt this market model in Brazil?

João Aleixo: To get an idea of the importance of cooperatives for the sector, almost 50% of agricultural Gross Domestic Product (GDP) is generated by cooperatives, and the agricultural sector stands out, with 1,597 institutions and 180,100 producers and cooperators. According to data from the latest IBGE Agricultural Census, some 48% of all Brazilian rural production passes, in some way, through a cooperative.

We understood that we needed a new model, one that was more ″being″ and ″understanding″ that genuinely integrated producers within the business and not just at the center of the strategy, so we sought a strategic alliance that could provide this value for producers, who will now become our partners and can grow together with one of our brands. 

AgroAllianz, in addition to supplying technology to owners themselves, will also bring this investment in innovation to the rest of the country through alliances, generating even more value for the Coopercitrus Cooperator

Other cooperatives want to be part of this new model, and we are evaluating how they can fit the model better.

DVA and Coopercitrus Leadership Team

Left to the right: Mattheus Marino, Coopercitrus board President

Joao Aleixo, Global DVA Agro Managing Director

José Geraldo, Coopercitrus board vice President

Matthias Damm, DVA CEO and Main DVA Share Holder

Fernando Degobbi, Coopercitrus CEO

AgroPages: What are your goals for the Brazilian market?

João Aleixo: We invests around 4.5% of our turnover every year in innovation in all lines of specialties. These investments were made to support the company's growth. Today, the DVA Agro group generates dozens of innovations every year, most of which have been patented, and Coopercitrus members will now own the solutions created by this entire structure. Our main goal for Coopercitrus members to see an AgroAllianz product and proudly say, ″This is my technology.″ 

Our business plan in Brazil is to have a formulation factory in 2028 and reach a turnover of around US$300 million in 2030.

  

DVA Agro Brazil factory

AgroPages: Please introduce the current development status of DVA Agro’s overall business. What has driven the company’s rapid development?

João Aleixo: Our company revolves around modern global agriculture. Innovative crop solutions help farmers around the world to grow their crops more efficiently. DVA develops tools and products to solve the biggest issues facing humanity today, which is feeding a fast-growing population.

In 2017, we defined the new DVA Agro with a new strategy aimed at making farmers part of us, by focusing on innovated solution created by farmers for their farms. DVA developed and invested in three new segments, which are crop nutrition (Incentia), adjuvants (Adyuvia) and biologicals (Esencys). DVA Agro has been expended the business to new countries, now we are present in 53 countries.

Since 2017, DVA has been invested around 4.5% per year in innovation and generated 12 patents per year average. Nowadays, we have three factories and five new R&D centers in three different continents. DVA has invested in one state of the art R&D center in Spain and a two new factories located at the same complex, with the aim on focusing on new technologies.

DVA Agro Brazil laboratory 

AgroPages: As the global supply chain is undergoing a process of reconstruction, how do you view the future prospects of DVA's cooperation with Chinese companies?

João Aleixo: China was, is and will be key in our industry, to be present in China, and also India, is part of our strategy.

DVA has been present in China since 1968, when the company used to sell stell. Since then, our relationships and partnerships have increased year after year.

We built over these decades a very close relationship and partnership with so many Chinese, we formed JV, created new business models, new products and solutions together. Our partnerships span the supply chain, from primary raw materials to the final product, and go beyond a commercial relationship.

 

AgroPages: Looking into the future, what is DVA's development positioning and goal in the global agrochemical market?

João Aleixo: Our main target is to serve farmers and provide them with solutions to solve their issues, and we will continue to do this, in a simple way with all the respect to everybody in this chain.