The Secrets to Agrochemical Success in Colombia

Bogota, Colombia

There is an old quote that best describes Colombia’s new lease on life: “Let him who would move the world first move himself.” Taking a much-needed look in the mirror after a year of what could be best described as having market stability, the voices of the various companies and associations interviewed by FCI on a recent trip to Bogotá, Colombia were powerfully harmonious in their analysis of what is to come for the nation.

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Described by CropLife Andean director Richard Franklin as a nation of up-and-coming market titans, it is clear that the stars are finally aligning for the country due to a regenerated focus on self-improvement. With a new government plan to amp up agriculture and a slew of foreign investors knocking on the market’s door, the next five to 10 years will cement Colombia as a force to be reckoned with on an international scale.

Maria Helena Latorre, director of ANDI’s Cámara Procultivos, which represents 90% of Colombia’s  agrochemical companies, described the country as having more blessings than it knows what to do with. Positioned at the gateway to South America, an ideal geographic location for distribution to countries like Bolivia, Venezuela and Ecuador, Colombia has high-quality soil and an immense availability of land, meaning growth opportunities are endless. So what’s holding it back? Latorre says there are a few factors that need to be addressed before Colombia can be considered an agricultural giant.

First and foremost, the government’s promise to address infrastructure shortcomings will be key to unifying the agriculture market. Wrought with three mountain ranges and few modern highways, growers are struggling to bring their goods to market, limiting their growth despite the access to nearly 36% of the country’s land.

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Access to credit is an undeniable hurdle for Colombian growers that wish to expand their operations, and thus companies looking to bolster their product sales. Borrowing directly from chemical companies to finance their crop input needs, it is imperative that businesses have credit to lend if they are hoping to find success in the Latin American country.

And, finally, irrigation installation will need to be a priority as currently only 6% to 7% have outfitted their operations with the proper watering mechanisms.

With careful attention to those issues, however, Frank Dietrich, president of Bayer CropScience Andean, sees no reason foreign investors shouldn’t consider Colombia a market titan within the next decade. “Politically, it’s an extremely stable country,” he explains, “and it is very safe in terms of ag investment. Furthermore, they treat foreign companies in the same manner they do local ones, making it an attractive place to build a business.”

Having just been relocated from China to Colombia (the same move Dietrich made a little more than a year ago), Rotam CropSciences Ltd’s Director of Latin America North, Alok Kumar, couldn’t agree more. “We see Colombia as a good opportunity. Also, the locals welcome expats with open arms.”

Furthermore, Kumar says Colombian growers are some of the most technologically savvy as far as application methods are concerned, which differentiates them from those in other emerging markets.

Knowing Your Client

According to market statistics, the majority of Colombian operations grow a single crop on one hectare. Different from Brazilian and Argentinian mega-operations, there are hundreds and hundreds of small operations in the nation that grow mostly for local distribution. This, according to Roberto Uribe, regional manager of Colombia-born INVESA S.A., the nation’s oldest chemical company, means there is a unique need for reliable distribution channels and the sale of small amounts of a product at a time.

For a company to have success in this environment, Kumar feels it is necessary to emphasize branding to reach a wide audience. Furthermore, quality of the product is key. “Growers don’t mind paying for value if it means yield improvement,” he explains.

Luz Amanda Copete, national sales manager for Proficol, a subsidiary of Israel’s Makhteshim Agan agrees. “In addition to good product quality, it helps to get on the ground level and show the growers how to best utilize the products for optimum results,” she explains. “We have 100 people in the field to do just that.”

If agrochemical industry competition seems stiff in Colombia, it’s because it is. With 87 agrochemical businesses in the country peddling their wares, in addition to all of the major multinational players, companies should be aware that the price of products has taken a nosedive.
Although the input market is standing at a solid $270 million, Proficol’s regional marketing manager, Jose Ariel Rivera believes that it will take innovation for the leaders of the pack to separate themselves from the herd as the wave of growth rushes over the industry in the coming years. “We believe that by 2016, 40% of total market sales will be new products.”

Companies hoping to find success must work within the framework of reality in order to develop a custom profile that suits Colombia. As the anticipated new formulations come into the country, Dietrich emphasizes that it’s not about bringing everything you have to market, it’s about bringing the right product. “You need to create value for everyone,” he explains, “We need to develop the farmers’ operations right along with them and work as allies to the government for the common goal of national agricultural and agrochemical improvement.”

“We’re sitting on a gold mine,” said German Fernandez, head of communications for Bayer Andean. “We just have to know how to mine it.” 

For more information like this on American markets, register for the 2013 Farm Chemicals International Trade Summit in Miami this August 5-7.

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