Interview: Sipcam fully entered into China agrochemical market

Date:11-19-2010

Early this year, agrochemical multinational Sipcam--1.htm">Sipcam (Milan) has established its Chinese subsidiary, Sipcam--1.htm">Sipcam Agro China, in Shanghai, which marked its entry into China’s agrochemical market. How will the multinationals operate when they entered into a new market? How to adapt to the local circumstances while adhering to their own marketing concepts in different markets? What are those activities to be done for a generic player to cast off the “me too” mode? Agropages talked with Mr. Geng Pingtian, General Manager of Sipcam--1.htm">Sipcam Agro China, about Sipcam--1.htm">Sipcam’s strategy in China and his views about the profile of the Chinese agrochemical market.

Sipcam--1.htm">Sipcam is a medium-sized Italian multinational group specializing in the production, marketing and sales of plant protection products and chemical intermediates. Since it was established in 1946, Sipcam--1.htm">Sipcam Group has built a long tradition of high quality production and formulation of chemical products for agriculture. Today Sipcam--1.htm">Sipcam is active across the whole world, with subsidiaries in more than a dozen countries, including USA, UK, Germany, Brazil, Argentina, Australia and so on.

Sipcam--1.htm">Sipcam has been involving the operation in China through its partners for several years, but limited to production of the technical ingredients and purchasing. As China’s increasing agrochemical demand due to rapid development, Sipcam--1.htm">Sipcam has realized the importance of this emerging market. With deliberate consideration, Sipcam--1.htm">Sipcam has worked out the strategy of implementing “two-way trade” by introduction of its piplelines including its fungicides and some proprietary products.

Into the market

Mr. Geng has a background in the marketing of agrochemicals in China thanks to many year of working for Bayer CropScience and Syngenta which made him a sober knowledge of the challenges ahead. Only driven by profit, the end-user market is in chaos with numerous manufacturer and poorly -educated growers. The chaotic situation, which is featured by blind selling and purchasing, as well as improper use has led to enormous waste of resource.

Sipcam--1.htm">Sipcam will promote its tradition of “cost-effective solution for the growers”, which will improve efficiency of pesticide applications. The implement of “cost-effective” might be a long-term and arduous task, but Mr. Geng stressed that Sipcam--1.htm">Sipcam will insist on promoting the idea of sensible consumption to the consumers by combining the commercial activities with intensive technical service. He also indicated that Sipcam--1.htm">Sipcam’s strategy of long-term development in China. The “First Five-year Plan” in Chinese market is to make Sipcam--1.htm">Sipcam agro China have dozens of products in place and gain some presence in the market. In line with Chinese market characteristics, Sipcam--1.htm">Sipcam will introduce products for field crops, such as rice, wheat and maize, in addition to the fungicides for fruits and vegetables.

Innovation from imitation

The growing competition between the generic player has made the simple “me-too” an unsustainable to survive, Sipcam--1.htm">Sipcam is also doing some different from the original "me-too” pattern to somewhat independently development on new products. It has got certain proportion of stake from a Germany-based bio-pesticides researching company to develop new type of products, including bionematocides and biofungicides, and Sipcam--1.htm">Sipcam will be their exclusive distributors in China.

Outlook of the Chinese agrochemical market

Mr. Geng also prospected the trend of agriculture and crop protection industry. The American large-scaled cultivation might not appear in China because of its unique situation, but consolidation between the small holders is a must and in process, and centralized procurement of crop protection products will emerge, which promote more specialized crop protection service for the growers. Beside the government organizations and the agrochemical suppliers, the media in this industry will also play an important role in crop protection service. In contrast to their previous lower profile, Sipcam--1.htm">Sipcam will emphasize its brand building in China, Mr. Geng stated that he attaches vital importance to the guiding role played by the industrial media.

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