Meet UPI’s North America General Manager, Vicente Gongora. As a native Brazilian working in the U.S. for one of the largest Indian crop protection companies, Gongora has an interesting perspective on the industry.
AgriBusiness Global: In Brazil you were with FMC, and later UPL there, and now the U.S. with UPI. How does doing business here compare?
Vicente Gongora: It’s been an interesting experience. The distribution growth of the market is different here. We don’t have these huge dealers or distributors like Helena, Tenkoz, CPS in Brazil – it’s smaller and more fragmented. It’s not easier, but different. For sure, for companies like ours, with our size it’s tough to get space in distribution. We have decided to be a distribution-centric company, as we believe that’s the best strategy to go to market. On the other hand, we have to compete with the Big 6 because they have such strong loyalty programs so we have to find a way to get space in the market.
AG: Can you talk a bit about the dynamics between UPL and UPI?
VG: It’s one company, and I think the time is coming that we will probably change the name here to UPL. We have to follow regulatory so you have to change labels. We’ll find a proper time to do that, so we’ll see. I travel to India three to four times a year. We discuss results, and how we will develop our strategy for the next three to five years – about how we will survive with the consolidations.
AG: And what is your take on the current wave of consolidation?
VG: Not only do we have consolidation among competitors but also our customers. It’s an evolving market. You see some companies like CPS, WinField, and Helena talking about making acquisitions, and the small dealers and distributors are consolidating and trying to expand. So we also have consolidation and competition from our customers.
AG: Are the consolidations on different sides equally challenging to navigate?
VG: From the customer side, as they get bigger they have more bargaining power so it’s not easy. Among our competitors, I see more opportunities there. The bigger guys may have to divest products so this could be an opportunity for us. They have to focus internally and it might cause some distractions.
AG: What specific product areas you are looking to add or expand?
VG: For products that might be divested, you have to see how it fits in the strategy in terms of our portfolio. Definitely, this is an opportunity. We have pretty decent presence in the East, West and South U.S. and those regions are more fungicides and insecticides. I’m not going to get specific on products that we are looking to fit there. On the other hand, we have a huge opportunity in the Midwest and with herbicides. With (consolidating) companies like DowDuPont, there is some overlap of products, and even with Bayer and Monsanto. There is strong consolidation in the burndown business.
AG: Working for an Indian company, and coming from Brazil, how do your approaches compare?
VG: It’s interesting because Indians and Brazilians have a lot of similarities in the way they see distributors looking for opportunities; there is a lot of flexibility. We came from an environment that is different from the U.S., which is very stable with low inflation. Brazil and India have a lot of instability both economically and politically, and high inflation, so we developed a kind of skill that we have to survive in this kind of challenging environment. This is helpful in an industry like ours. It’s a very challenging industry with all of these things ahead. You have to look for options to grow, differentiate ourselves as a company, differentiate our products, and be creative. It’s a good mix.
We have a global statement and that is, ‘doing things better.’ We are not a discovery company. So what we have to do is take the products that are already in the market and do something different. We add value to formulations through premixes and delivery systems – these kinds of things. If we just play on the price side, it is not sustainable. We have to find things to offer to our customers, distributors, and growers. Then we can survive in the market. We have to find ways to add value to product and to our customers. That’s why we talking about these new formulations and new premixes. It’s about bringing convenience to the growers.
AG: What kinds of things are customers looking for? And what are your next steps as a company?
VG: We are working on formulations for winter conditions. On premixes, we are working to develop a better balance of products. It’s difficult to see Bayer and Syngenta working together on a mix with products from either company, but we can do that. We can find the right balance, because when we put our focus in one product we try to be back-integrated to that. I can give you several examples. We are strongly positioned in acephate, mancozeb, acifluorfen, and glufosinate. We are back integrated in all of that. This is part of our strategy, to be a strong supplier. We produce from scratch and manufacture most of our products. We have plants in Europe, India, Columbia, Brazil, Argentina – more than 27 sites total.
We are starting a manufacturing plant to start operating next year in the U.S. in South Carolina. The initial focus will be herbicides, like Interline and Lifeline, and new products that we are adding to our portfolio. Our idea is to introduce five or six new products every year. This is how we will grow. There is no way to grow if you don’t bring new products to the market.
AG: Is the U.S., then, a key part of UPL’s overall growth strategy?
VG: Absolutely. The U.S. is a key part. India, Brazil, and the U.S. will be drivers for UPL’s growth globally.
AG: Being based in India, how does UPI benefit in terms of sourcing tech?
VG: We synthesize most of our products. Being out of India I see this as an advantage. If you remember early last year there was a huge problem in the West Coast at the port – there were a lot of trucks and ships waiting there and lots of delays. That was created by products from China coming to the West Coast. We continue to bring our products to the East Coast, like Charleston. We see this as an advantage for us. That’s why we’re basing our new plant in South Carolina because it is close to the Charleston port.
AG: What are your growth targets?
VG: My target is to double the business in four years. We don’t know if it will be the Big 3, 4, 5, or 6 once consolidation settles down. If it’s still the Big 6, I would love (UPL to make it) the Big 7. That’s close enough to them!