There was a mixture of excitement, uncertainty and urgency flowing through the halls at Syngenta‘s major North America site in Greensboro, NC. Just five weeks after the company’s announcement that it would be merging its seed and crop protection businesses, people were still getting clarity on roles and responsibilities when CropLife® magazine stopped in for a visit in March.
Syngenta’s integrated approach actually began worldwide four years ago. A number of countries, specifically Brazil and Italy, are already integrated and the strategy has been very successful. Vern Hawkins, who has been co-leader of the integration initiative along with David Morgan (who both now serve as regional directors), says that successful pilot testing in the U.S. last season was the “final step in confirming our readiness to integrate the divisions.”
The effects of the integration on Syngenta, its channel partners and customers will be far reaching and comprehensive, from product research and development all the way down to the farmgate, says Hawkins.
“With the overlapping technologies we have from seed, traits, crop protection and seed care, we have to be in a position to have a conversation about what technology fits where and when, and what comparable technologies should be considered to get the best out of each crop,” says Hawkins. “So we see this in the front end of our business as a need — we must look at how to combine and integrate complementary technologies early on so that we bring out better products and better recommendations that fully enable the technology coming out of our pipeline.”
On the back end, retailers and growers should be seeing better products and better solutions from Syngenta that bring a higher level of value and return on investment, as well as a fully committed and knowledgeable Syngenta field team that’s ready and able to help support retailers and help growers realize the full potential of Syngenta technology.
Creating the single business unit will evolve over the next two years, and Hawkins knows it won’t be easy. The two divisions will continue to operate independently in the short-term while also learning how to work together and eventually becoming one.
“There’s a good understanding and excitement here about what we’re doing, and we’re in the process of creating the teams, so as that occurs it creates both excitement and anxiousness. But we’re optimistic about what we have seen from the team so far, and we will be finished with our team selection by mid-summer.”
The move will mark a significant change across the board at Syngenta, starting with research and development. “All the functions of the business in R&D, which create technologies, will be in one group now,” says Hawkins. “It won’t be about putting together a seed and crop protection team to figure out what we know and can share. It will be a combined and integrated team from the start that brings the knowledge and incorporates it into the design, whether it’s a business plan for a new product or a plan to develop a new supply chain solution. From that standpoint, we expect to leverage our learning and gain some efficiency in terms of how we support the business.”
One of the biggest international success stories born from integration was a Brazilian sugarcane project known as Plene. The integrated team at Syngenta recognized a major efficiency challenge in sugar cane production — that growers started a crop by planting a full stalk, a labor intensive and highly inefficient method not conducive to technologies such as its seed care products. The integrated team went back to the drawing board on the entire crop-production regimen, and developed a new cropping plan that allowed the treatment and planting of a small node instead of an entire stalk, significantly improving efficiency and yield in Brazilian cane.
In the U.S. and Canada, the integrated strategy will clearly match how growers are approaching their own crop planning. “When you look at seed, traits, crop protection and seed treatments and how growers think about getting the maximum yield and quality from each field, having overlapping technologies allows you to have a better conversation with growers,” says Hawkins. “We need to be able to have conversations about where technologies fit best, and what complementary technologies should be considered to get the best out of the crop.”
On The Ground
A significant challenge for Syngenta inherent in the divisional integration will be its effect on “ground operations.” When the line between crop protection and seed is erased, it will be incumbent on everyone representing Syngenta to understand the total business and operate as a team, says Hawkins. “The biggest question we are getting from the field is, ‘who will be my Syngenta rep?’ We’re engaged in that work now, and I believe we will end up with a model that positions our salespeople to operate as account management teams. Until all of our people have a good understanding of our total technology offer, we will have one individual that will serve as the lead account manager and others that will serve as a support team.”
Team-building challenges will vary with the current level of expertise in a given area, and the amount of support needed. For example, areas that feature many high value crops will require a more blended expertise than a strictly corn and soybean area. “That’s a pretty big part of the work we’re in the middle of now,” adds Hawkins.
Retailers also serve a critical role in this process. “We see the retailer as a natural integrator and always have,” said Hawkins. “We are seeking ways that we can better understand how the grower thinks about planting crops so that we can bring the right crop production systems and technologies together. To this end, we will look for collaboration opportunities with the retailer, who the grower still trusts and who has the relationships and conversations with growers.”
Inherent in the seed/crop protection integration challenge is the discord in seed distribution, which is still only about one-third sold though the input retailer both industry wide and at the company. Syngenta NK branded seed is predominantly sold through input retailers, while Golden Harvest and Garst are primarily sold through the seedsman model. Hawkins does not foresee any major changes occurring in how the brands are marketed and sold, but he believes real opportunities for retailers committed to expanding their share and Syngenta’s share of the seed market exist and will be realized over the next few years.
Getting all the “on the ground” players on the same page and fulfilling their respective roles will arguably be the biggest challenge. Hawkins recalled a visit he made to a large retailer/grower meeting shortly after the announcement, where it was clear that seed and crop protection reps were already working well together, but there are significant differences in how effective the interactions across divisions are working.
“Some teams, on their own initiative, have been doing well on this front, and some are more reserved,” says Hawkins. “But when you change their accountability and say that as a Syngenta representative you need to be knowledgeable both about seed and crop protection, people begin listening and leaning on their partners in a different way. It takes people committed to communicating well.”
The collaborative team of Syngenta representatives and retailers have further incentive to work together based on the company’s growing portfolio of offerings, he adds. “It starts with connecting with the retailer who has a common goal to succeed and grow with seed, and a willingness to approach growers with multiple technology solutions. We bring the technology as far as seed, traits, crop protection and seed care, and they bring fertilizer, application, information services, and precision agriculture technology expertise. We need retailers who will think about this in an integrated way — if they are willing to have that dialog, we can build a business plan together.”
It’s difficult to look too far ahead with so much work to do with the integration, but from both a market and company standpoint Hawkins is optimistic about the next five years. “We’re watching a lot of key drivers, and we are hopeful that when you look at the 2008 to 2010 period and its jaggedness and volatility that we are not in a similar mode,” says Hawkins. “We think it’s more measured and sustainable. When you look at the stock levels and what’s going on with demand, there is reason to believe that we are not going to have a fallback as we did in 2009.
“It’s too early to call it a five-year trend,” he continues, “but if we have a successful 2011 and then get growth on top of that in 2012, I think we’ll be in a better position to call it a trend line. But the fundamentals suggest that it is more real than what happened in 2008.”
On the row crop seed and traits side, he sees 2012 as a real breakout year for Syngenta in terms of the breadth of maturity zone coverage in corn and soybeans, and anticipates more work and growth in the cereals and vegetable businesses. Water optimization is also a key focus with the development of AgriSure Artesian, which Hawkins says will benefit from the implementation of the integrated strategy.
Meanwhile, business will continue to grow in the seed care area with the market’s increasing awareness of nematode damage, and the suite of solutions available through Syngenta’s abamectin-based Avicta seed treatments. And in general, the integrated approach should lead to new and innovative solutions matching Syngenta crop protection and seed products.
“We hope that over the next two years our customers will have experienced enough value and seen enough progress and success from our strategy that they believe it is the right way to go to market, and they can get behind it,” says Hawkins. “That is the best measure of success.”