The Newest Ag Powerhouse: Q&A with UPL’s Diego Casanello
India’s UPL Limited on Friday announced it completed the acquisition of Arysta LifeScience Inc. from Platform Specialty Products for $4.2 billion, adding to the wave of mega-mergers the crop input industry has witnessed over the last four years.
In pursuit of its long-term vision to be a world leader in the global food network, UPL also launched its new purpose, called “OpenAg.” It stands for open-minded partnerships and creating win-win partnerships, thus broadening the space to create value along a wider food production network.
“Through our purpose of OpenAg, we aim to transform agriculture by creating an open agriculture network that feeds sustainable growth for all,” said Jai Shroff, Global CEO.
AgriBusiness Global had the opportunity to chat with Diego Lopez Casanello, Chief Operating Officer of the new UPL’s Crop Protection business. Before the merger, Casanello served as President of Arysta LifeScience, based in Cary, North Carolina.
ABG: Where are the biggest gains for the new company?
The two companies before were very successful in outperforming the market. But they did business in their own way. Both companies found a way to be successful being different than many other companies in the crop protection business. In the case of UPL, they’ve managed to be the absolute cost leaders, and at the same time be the most agile company in the market. In the case of Arysta, we have focused on marketing – on being a marketing powerhouse – and on customer and technology relationships.
Now we’re bringing these two companies together, and we want to maintain those attributes. Going into the next five years, we plan to double the business again.
ABG: What’s next for the new UPL?
We are finalizing the integration, but we are very much ahead of the curve here. We started early with the planning, so we feel like we have already been working for some time. Today, with day one, we are now able to go into more details and execute on the implementation plans. We are very confident we can be very quickly operating as one company.
The future for us has been really expanding our understanding of the crop protection market. For us, this market is more than just chemical crop protection – we are expanding into biosolutions. We will be the number-one company in biosolutions if you measure us in sales, but also in terms of the technologies we are working on. We are also going in several countries into servicing offers in India, where we are supplying crop protection products to farmers, and also Australia where Arysta used to treat seed for farmers with mobile units.
We think about this market much more broadly than just chemical crop protection. For our teams, it means thinking not just about single products, but solution selling, so that’s going to be the focus in the short term.
ABG: Can you talk more about your plans for expanding in bioproducts?
We are already playing a role in both biostimulants and biocontrols. We have a very interesting pipeline based on microbe and pheromone technologies, and plant extracts. In those fields, we are doing research and we feel like we are very well positioned. We bought a couple of very important products and some established companies in the past, so today we have a very good starting point.
ABG: What will the acquisition mean for buyers in how it might help address some of the issues they are facing right now, including product sourcing?
We are well-diversified when it comes to our sourcing. We have multiple partners, many of them in China, and now with the new UPL, we will have a strong foot in India and in China and in other places. That gives us, obviously, many more options and flexibility to make sure we’re reliable when it comes to supplying our customers. That’s a key thing we have seen this year, that those players that were not well-positioned in terms of their sourcing strategy have suffered, and that’s something that our customers expecting from us – to be reliable. We will be in a very comfortable position.
ABG: With the very heavy M&A activity over the past several years, where do you see the new UPL’s role in this whole picture?
We try not to compare ourselves with the other top players in the market. We try to focus on the farmer. Our approach is, stay close to farmer; understand the need of the farmer. Farmers today are going to have many more needs than just controlling a pest or disease. They want to produce healthier, more sustainably; they want also to make a living out of it. We are focusing on that. We believe that by doing so and being consistent, that defines our role, and not trying to see, how can we take this or that shelf space in distribution, or trying to imitate, or trying to ‘eat the lunch’ of some of our competitors.
ABG: Will your market focus change at all – and do you have any plans to enter new markets?
We are already a global company, but we will obviously be moving forward. Both companies together will have a broad portfolio in all key agricultural markets. We have a long tradition, both UPL and Arysta, of playing in emerging markets. UPL is obviously a consort of India, but both companies have track records in Latin America, Asia, Africa – Arysta is number two in Africa.
We want to obviously continue to focus on these markets, because this is where agriculture is going to grow the most. Here, it’s really not only about bringing products, but you need to actually develop the infrastructure you need in those countries to establish technologies and work together with farmers. I think here we are very well present. If you look at the Adean region in Latin America or in Brazil, we have a very strong position. We are strong in Southeast Asia, India, and Africa. These are markets that are growing very fast.
ABG: We often hear about how the clashing cultures of two companies that are merging. How are UPL and Arysta addressing this coming from such different backgrounds?
What we have seen is that we have some similarities and we have some differences. I think the key here is to be aware of those differences, but more importantly whet we are doing right now as part of the integration is basically asking our teams, customers, and partners, ‘What are the attributes that make both companies so successful to keep moving forward?’
We are defining our values and principles, and today we presented to our teams the new purpose of the company. This is what inspires us to be part of the company and come to work every day. You should have seen the excitement in the teams. I think we’re getting a lot of momentum. We are shaping our new culture as we speak.
ABG: Looking more to the big picture, can you share your thoughts on the next mega-merger in this space – ChemChina-Sinochem – and how it will change the agchem market?
Obviously, consolidation is not over yet. You think about it, you need scale both on manufacturing but also in terms of the presence you have in the market. On the one hand, the farmer needs a solution. He’s not asking you for a product; he’s asking you to solve a spray problem. You need to have an aggressive portfolio, and people in the field that are going to work with farmers. At the same time, you need to be cost competitive.
Farmer income around the world is always an issue. You need to make sure you’re cost competitive, and that means having economies of scale in production. That is going to continue to drive consolidation in China, and I believe the new UPL will be one major player with a very strong foot in India, and you have other companies with a strong foot in China. That’s important, because at the end of the day you need to be cost efficient.
ABG: What’s the take-home message?
I think we believe the market is very much looking forward to the new UPL. We were extremely surprised at the very positive feedback we have received from customers, which is something that doesn’t happen very often when you’re a merging company. They need a partner that understands the industry the way we do. We want to remain a company that is flexible, that is agile, that keeps its connection to customers.
We know that this market is changing, that the priorities moving forward are productivity but also sustainability, and also being climate smart. Everything we do is already thinking ahead on how we can become the best partner in terms of the farmer and our distribution partners. We are believe we are on a very good path to double our business and be one of the top players in the market.