Looking East: A Conversation with AMVAC COO Bob Trogele
Bob Trogele is a person you meet that you don’t soon forget. He puts you at ease, focuses on you entirely and happily talks basketball to the curious who have googled his background – or guessed it by his tall stature. (“Who’s the best player in history: LeBron or Jordan?” Neither. “Kareem.”)
Trogele managed to play in the Olympics not once but twice and went on to a pro basketball career, all before getting his PhD and reinventing himself as an agribusiness leader with a now 30-year stellar track record.
So how did he go from playing hoops against Michael Jordan and Magic Johnson to leading successful business turnarounds at Schering, Bayer, Aventis, FMC, and now his new role as chief operating officer of AMVAC?
“Very simply, my family has been farming for 500 years in southern Bavaria. We have our own family farm there,” Trogele told attendees at the FCI Trade Summit – Americas in Las Vegas on Aug. 5. In the late 1970s, before TV exposure exploded player salaries and spawned the off-court endorsement machine, he needed a way to pay the bills and feed his young family. “I tried coaching for a few years and I really didn’t like it. I found it monotonous, running the same systems all the time. So I joined the chemical industry in Germany – I’m a dual national.”
From athletics he took the formula of building winning teams by finding and training good people – and “having them enjoy what they do every day” – and applied it to the agchem business, and
Trogele arrived to his new post at Southern California-based AMVAC in January, charged with helping drive international growth by 20% next year.
“I wanted to work in an entrepreneurial, small-company environment, and I wanted to bring all the forces of 30 years working in Europe, North America, Asia and all the contacts I had into an entrepreneurial setting, so I’m having a great time. It’s a very exciting time for our company.”
On the Hunt for Partners
The new international push might raise the eyebrows of some in the industry who know AMVAC as not only a domestic-focused player but also a U.S. basic manufacturing champion, eons after it went out of fashion.
Longtime CEO Eric Wintemute balked at America’s outsourcing obsession and built up AMVAC’s U.S. manufacturing base over the past 25 years while others tore theirs down. Today it outsources about half of its organophosphate and pyrethroid offerings to India and China, and the other half it still synthesizes in-house. The company runs its original factory in California, and holds one-third of a DuPont facility near Mobile, Alabama and 20% of the BASF plant in Hannibal, Missouri, as well as a small formulation plant in Idaho serving the Pacific Northwest region.
“These factories allow you to change with market demand and provide very high quality control. While many of our peers rely exclusively on offshore production, we think that our domestic manufacturing provides many benefits and is not something to be abandoned,” says Bill Kuser, AMVAC’s veteran investor relations director.
Adds Trogele on the value it brings to potential partners: “We want to keep some of that (in-house manufacturing) expertise because we’re extremely good at process chemistry. There’s a technology piece which we’re really good at, so we can help either a raw materials supplier or a toll manufacturer lower their costs.”
The company has also invested in a technology center in Los Angeles, where it has strong capabilities with microencapsulations, and is starting to come up with a variety of added-value formulations, such as its high-concentrate granules which will be launched into the U.S. market next year. The product almost doubles the amount of chemical on the granular, easing the continuity of planting.
A giant step in AMVAC’s expansion was the pair of acquisitions it scored in April: the global bromacil herbicide business from DuPont, which opened the doors to Asia and Central and South America, and Adama’s European Nemacur nematicide assets, which filled another gap in AMVAC’s portfolio.
It owns the regulatory packages for 34 active ingredients globally, but there is much headway to be made. “We have lots of portfolio gaps,” Trogele admits, most notably in soybeans.
Now, the company is on the hunt for distribution partners and alliances to help it gain access to renowned field crop markets such as Brazil, Canada’s Western Plains, Australia, China and Ukraine, and, of course, provide partners with reciprocal access.
“I think (our growth) is going to be from acquisitions and some licensing, but a lot of growth will be looking for strategic partners and alliances with regional players or local companies where we feel the business philosophy is similar to ours,” Trogele says. “Consolidation in the industry is happening again at a very rapid pace.
A lot of companies that are of similar size are looking for access in the Americas. We’re looking for access in Asia, and we can swap or aggregate technologies together.”
A Totally Different Game
Fortune named AMVAC a top-50 growth company in 2012; Trogele says it achieved that rapid growth in two ways: product acquisitions and system acquisitions.
By system acquisitions, he is referencing SmartBox, its innovative, closed-handling application system picked up from DuPont in 2000, which AMVAC has continued to upgrade, most notably in meters and software that play to precision agriculture. The system’s electronically controlled mechanism cuts exposure to the worker from organophosphate and pyrethroid insecticides completely out of the equation. An added bonus is that when commodity prices fall, such as they have this year, growers can make last-minute decisions on how much corn versus soy to plant, for example.
The SmartBox user “dials in” exactly what he or she wants to do on any given plot – a natural fit for both prescription planting and precision ag, Kuser says. AMVAC is at work on a multifunctional version of SmartBox, dubbed SIMPAS, which, in addition to depositing granular soil insecticides with no exposure to the worker, will also be able to deposit granular fungicides, plant nutrients and potentially biologicals.
“We hear from Monsanto and others about satellites, GPS, sampling the soil and all of this is relevant data, but unless you have the main technology to actually deposit the right prescription in the right spot at the right time, it’s all just a bunch of data,” Kuser says.
SmartBox not only helps with cost efficiency, but it is also a tool to measure environmental impact and aids in compliance in countries with strict prescription regulations. The user can determine how much chemical or nutrient goes on the field, so after a farmer crosses a field he can give someone a printout that says exactly what they applied, if the need arises, Trogele says.
The company has refined and expanded its technology foundation, biologicals included, for the simple reason that its future depends on it. Trogele recalls that in the industry’s last wave of consolidation from the mid-’90s to the early 2000s, mergers were all about getting economies of scale for research and development.
“Now, the game is totally different,” he says. “It’s more about getting a bigger portion of the grower’s wallet. It’s about driving more cost out of the profit and loss statement. It’s about competitive advantage. It’s also a little bit about East and West starting to combine.”
That coming together of East and West is exactly what AMVAC has in mind for future partnerships, and where SmartBox comes in.
It’s the kind of technology AMVAC believes will be increasingly sought after in an age where regulatory capabilities are a no-brainer. “We think our delivery and precision technology fits into the regulatory environment, especially in China,” Trogele adds.
AMVAC has been a well-regarded “adoptive parent,” as Kuser puts it, of smaller, niche products that larger companies began pruning from their portfolios. They feel confident in AMVAC taking on these orphan products, he says, because it can credibly manage manufacturing and regulatory compliance issues and offer education on correct usage.
Regulatory know-how is one point Trogele emphasizes over and over. Because the products AMVAC has acquired are all mature chemistries, they are always under scrutiny. It put a regulatory team together that is one of the best for a company its size, he explains, because, “you’re either really good at that game, or you’re not going to do well.”
The markets are facing headwinds, but Trogele sees it as pure opportunity. Currencies are weaker, so it’s cheaper to invest beyond U.S. borders.
In this tougher climate, “People are looking for partners, looking for alliances, looking for different models on how to venture into doing business,” he says. “When things are good everybody is very satisfied, and perhaps not as open to discuss things. Right now the opportunities for us are better than ever.”