Q & A: Willowood Ltd.
17 May 2010 Vijay Mundhra, Director of Hong Kong-based Willowood Ltd. spoke with FCI editor David Frabotta about its acquisition and development plans following its January acquisition of Vadodara, India-based Shreeji Pesticides Pvt Ltd.
Q: Willowood has taken an assertive approach as far as acqusitions and development. What is the main driver/reason of this strategy as of late?
A: We want to be an integrated provider to growers and thus we need to integrate our business vertically in both directions.
We believe that we have gained the critical mass to grow globally. Organic growth in the agchem business can not be very fast due to regulatory and registration issues, and thus we have to look both at organic and inorganic growth paths to maintain the growth momentum.
Until now, the focus was to register our brands globally and create a wider presence. We have been reasonably successful in that owing to our excellent team and customer acceptance. We are now taking a more specific market-oriented business development approach and looking at developing our business in certain key markets to consolidate our position in such markets.
Q: You recently completed the acquisiton of Shreeji Pesticides Pvt Ltd, a Vadodara, India based company. How does this acquisition fit into the plans of Willowood and what will it bring to the company?
A: Willowood Chemicals Pvt Ltd was formed three years back. In a short span it has developed itself as a dominant supplier of actives in the Indian market, thanks to our young and dynamic team there. Until now we had been trading into actives and using tolling facilities to formulate products for us; Shreeji has over 150 active registrations, giving us instant access to those products to be manufactured for tolling as well as to be launched in our own brands. By doing so, we capture the tolling margins that were being paid outside before; it also helps us to maintain uniform quality standards and manage inventory and control logistics better.
With Shreeji comes associations with Dupont, Makhteshim Agan and some fertilizer companies for whom they have been doing the toll manufacturing and packaging, which is an added advantage.
India has one of the largest and youngest populations in the world, with urbanization and a younger generation not wanting too much involvement in agriculture. Coupled with the fact that India has one of the lowest per-hectare consumptions of pesticides, and it presents very promising prospects for agchem industry growth.
Q: Your new USA office, located in Roseburg, Oregon, just opened in October 2009, and is led by former AGValue CEO Brian Heinze. The US distribution system can be challenging to navigate. How will Willowood USA meet this challlenge?
A: Our US operations started in November with Brian heading the business in the US. It is indeed a challenging market with high barriers and entry level costs. The key to success will be in creating the right mix of products, being able to bundle the products and offer them to growers where they see real value coming from a generic but equivalent product, to understand grower perceptions of what they want and how they want it and not what we want to sell. Most important of all is the relationships that we feel Brian brings with his vast experience in the US ag-chem business and his proven track record with the ability to understand grower perceptions and tailor products to their needs. We are glad to announce that Joe Middione will be joining us as vice president of Willowood USA; with him he brings invaluable knowledge and understanding of both the traditional distribution — having worked over a decade with UAP — and also wide understanding of the US agchem business with his stint as CEO of Agrian.
In the coming 3 years, the focus would be to attract right talent to grow our business in the US with the right product mix.
Q: Are there any plans for further expansion from Willowood?
A: We have plans to get into synthesis of actives in India and launch our own brands there. We are also looking at Brazil, to either acquire a business or start fresh, as with its sheer size and diverse agriculture, it’s one market we simply can not overlook in our continuous pursuit of growth.
Longer term, we would also like to look at the European union.
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