Taking The Helm

Post-patent crop protection manufacturers went for a roller coaster ride in 2008. Increases in crop protection product demand worldwide, coupled with China’s shift in manufacturing focus away from crop protection created a major supply gap. Companies were left flat-footed and unable to react to the demand with unprecedented increases in material and energy costs, resulting in big price increases.

This is the landscape that faced Mar­tin Petersen as he prepared to take over the ANZAC (Australia, New Zealand, the Americas, and Canada) business for Cheminova, a post-patent company with more than 70 years in the crop protection market and ranked 11th among manufacturers worldwide. The ANZAC region represents about 25% of the company’s total sales.

Petersen brought with him deep experience working for basic manufacturers Bayer and American Cy­anamid, and most recently, post-patent marketer Gowan. Petersen’s goal is to maintain Cheminova’s track record of collaboration with the channel and post-patent innovation.

“We would like to be seen as the innovative company among generic ag chem players,” says Petersen. “We are proud of having established partners within the distribution channel, and we are clear on the role of distribution — we are not trying to find a direct way to reach the farmer-consumer. We’re better off working with distribution partners, who add their strengths to the relationship and allow us to focus on providing quality product.”

A recent major global restructuring of the company, which employs 1,600 people globally (36 in the U.S.), puts it in a position to reach its goal of “jumping up a notch” on the ranking of global ag chem companies, says Petersen. The company also recently announced the relocation of its U.S. headquarters to the “heartland” of crop protection these days, North Carolina.

Managing Change

The global post-patent market got a real shaking in 2008. The Chinese government moved to reallocate resources and impose sweeping changes to its manufacturing sector in an effort to reprioritize its manufacturing base. The moves served to reduce the manufacture and available supply of crop protection products globally. On top of it all, demand is on the increase.

Petersen says that “China is waking up to its limited resources, and is really interested in playing a more important part in the global economy than being simply the chief workbench for product manufacturing. China is finding ways to make better use of resources, while adding Draconian export surcharges on some products.”

Petersen is relishing his deeper involvement in the U.S. market, which he says is being driven by some interesting dynamics. “I’ve spent a lot of time working in various markets around the world, and the U.S. continues to be unique due to ag’s sizeable contribution to the economy as a whole,” he says. “Farming is heard on Capitol Hill.”

In general, ag and food is back in the news headlines, which is revitalizing the industry at its roots. “University professors are saying to me that ag school enrollment is up,” he says. “The public is accustomed to the farm community producing more and more, and a redoubling of our effort is in order. Bringing better technology to U.S. agriculture is key. Not long ago producing 100 bushel corn was a privilege, now it is a disaster. Technology is constantly improving ag here in the U.S.”

That said, there is still work to do. The recent food scares require the industry to strengthen its stand with the American public and further work to ensure a healthy food supply, says Petersen. Agronomically, there are continuing challenges to glyphosate from resistant weeds. This is where Cheminova sees the retailer as the key partner in reaching out to growers.

“Cheminova is working to make the best and most appropriate technologies available to the farmer,” says Petersen. “The retailer is the one that understands and has the tools in advance to talk to the farmer, and tell him what he should or should not do. We continue to look for ways to work through the channel, to strengthen our relationship with the channel, and deliver key chemistries that retailers need to allow them to maximize profitability.”

With the growth of ag worldwide, shortages are expected to continue. Research and development-based companies are best at bringing new technologies to ag, leaving the role of off-patent companies to improve the availability and use of older generic products. “Companies like Cheminova continue to play an increasing role in making these products available to the U.S. farmer,” says Petersen.

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