TBY talks to José Escalante de la Hidalga, CEO of Velsimex, on the strength of its products in the market, international operations, and being the President of Campo Limpio.
TBY How would you assess the penetration of your agrochemical products in the local marketplace?
JOSÉ ESCALANTE DE LA HIDALGA Velsimex is ranked as the sixth largest company in the agrochemical sector, and is the largest Mexican company. We began operations by acquiring products that Velsicol Chemical Corporation did not sell to Sandoz. In 1988, we started distributing those products. We used the profits to purchase other products from independent manufacturing companies around the world, and we developed their registration and commercialized them under our label. In general, there is no publication that says exactly where our company ranks. Our marketing teams can only estimate the market share of top -level companies and study our level of sales in comparison to other companies in the sector. Today, we have more than 100 registered products. There are eight other top multinational companies, including Syngenta, Bayer, DuPont, Dow, BASF, Monsanto, FMC, and Arista involved in agrochemicals, of which five are performing original research. We could add UP as a relatively new player in Mexico. Velsimex is in the market for products that are out of patent, and it is the leader in Mexico for that market. We purchased leftover products from Velsicol Chemical Corporation and sold those products until they were off the shelves. Since then, we have been focused on the formulation of technical products sold under our own label. Now we are starting to synthesize molecules from the beginning. We are set to synthesize two fungicides, five insecticides, and perform the final part of the synthesis process in two herbicides.
What are some of Velsimex’s other strengths?
We have 20 warehouses positioned all over Mexico, and this has helped us get products to the place they will be used on time. We have a strategy of offering competitive prices compared to the offerings of multinational companies and we try to match their quality. The major difference is that multinationals always have a new product to launch, work on research, and enter the market with new promises. We do not perform research. If we commit to do something, we do exactly what we promise. People trust us, because we always keep our promises. We also try to offer the largest portfolio of products. For our distributors, it is an advantage—they can purchase all the products they need from us, and only go to multinational companies for special components still under patent. We have 350 distributors, and about 90 of them represent 90% of our sales. Of those 90 distributors, Velsimex comprises more than 60% of their sales. We have tried to create agreements with our distributors in order to develop through them.
What is your international expansion strategy?
We are physically in Guatemala and Panama. First, we develop all the necessary registrations in a new country. Once we have the right registrations, we establish a subsidiary in order to start selling our products. We try to do a lot of business in Central America, because it is close to Mexico. We also export to Colombia and Argentina. Once we start synthesizing, we are looking for opportunities all over the Americas.
How would you characterize the current progress of the agriculture sector?
In vegetables, Mexico performs as well as any other country. In the northwest of Mexico, the farmers there are using the best methods for cropping vegetables. In corn, in the western part of the country, irrigation is not needed due to favorable weather conditions. There is a production rate between 12 and 16 tons of corn per hectare. Compared to the US, this is very good. Mexico had a revolutionary war, and because of that, land holdings were broken up. People own 20 or 50 hectares maximum, and it’s really hard to combine huge amounts of land as the US does. Jalisco is one state that could compete with the US in terms of production capacity. In general, it’s a good area for cropping sorghum or corn. In the northwest, wheat is also produced in large quantities, but there is still the small landholding issue. You can obtain just 800 kilograms of corn per hectare in some areas of Chiapas.
What has been your experience as President of “Campo Limpio”?
Mexican manufacturing companies of phytosanitary products such as Velsimex and Agrícola Innovación and others, as well as the subsidiaries of multinational companies in Mexico such as, Arista, Bayer, DuPont, FMC, UP, and others created an association whose main objective is to collect and recycle all the packaging used in the Mexican agrochemicals market. During 2012, this association will collect and recycle 50% of the total packaging that this industry generates, which represents 2,800 tons of empty used packages.
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