Stockton Group is present in 35 countries around the world. As a pioneer in biopesticides, what were some of the challenges you had to overcome before entering this market?
In an agricultural industry that is dominated by six major players, and which is over 80% generic, Stockton aims to play an important role by significantly adding value and innovation to this arena. Stockton, which has been in operation for 20 years, has always sold generic products exclusively. During the last decade, Stockton Group has been focusing on the introduction of additional value to the agriculture industry. We are one of the pioneers in the field of biopesticides. We develop, manufacture, and sell plant extract-based biopesticides with the intention of integrating them into conventional spraying programs. The expectation in the industry is that this segment will be worth more than $6 billion in the coming years. We have been exploring the potential capabilities of biopesticides by demonstrating their value for other important players' lines of business. We are confident that these products will be a winning solution because they extend the length of the chemical product for distributors, and they increase the yield and quality of grains for many crops. Moreover, their use creates cleaner and healthier foods. Though biopesticides remain a secondary player in this industry, they are, nonetheless, important.
Where does Panama fit into the picture?
We are entering the Panamanian market at a stage where there are diversified crops so we are targeting those crops for which biopesticides can create a higher value than other products. We usually begin with fruits and vegetables, as they are more sensitive to chemicals and tend to be consumed by end users in their unprocessed form. We launched our efforts with rice in Panama after attaining positive results in other countries. Rice is an export crop in Panama, so quality control is a central issue for the industry. The results for farmers are much better in the long term. Government subsidies for crops, including rice, allow for better cash flow. We are also considering working with coffee and other crops in Panama. The reason we entered Panama was because of the diversity of its crops, the exportation of its output, and its openness to the benefits of biopesticides.
What are you doing to raise awareness of the benefits of biopesticides at the regional and national levels?
Big changes in the industry are always mediated to some extent by the biggest players. Established companies recently started warming to biopesticides after seeing that it was not a threat to their chemical portfolio, but rather a complement to it. Once they understood that, the real journey began in terms of M&A licensing, and distribution agreements between the big players and the biopesticide producers. Biopesticides are now an integrated part of the industry and everybody has accepted that there is a legitimate place for these products in their portfolios. We are still at different levels on the learning curve for our products, and the growth of the sector depends on extracting maximum value throughout the distribution chain.
How will China's Hebang Group's recent acquisition of 51% of the company affect Stockton's operations and further its expansion?
This was an important event for us, considering Stockton has been a family-owned company for the past 20 years. Our relationship with Hebang is extremely good. In the past, Stockton relied on its own internal resources in terms of investments, goals, and business strategy. This deal allows us to carry out more ambitious plans. Stockton's vision is to become a leader in biopesticides, and to integrate this product into the conventional spraying program. This increased financing will help us develop additional commercial products besides our already well-known products, like the Timorex Gold fungicide. The new ownership structure will also enable us to penetrate new markets such as the US, China, India, Japan, and Europe. Our new shareholders have made it clear that they would like to see the company listed on the NASDAQ exchange in the next 3-4 years, so we are working toward that goal. Another aspect of this investment will be Stockton's ability to start screening and collaborating with the aim of discovering additional biopesticide technologies.
What new products are you are preparing to bring to the market?
We want to diversify our product lines into herbicides and insecticides. We also want to strengthen the appeal of our products in the market. The early stages of our research are spent seeking ways to purify biological AI technology in order to make them viable. Almost 70% of a plant's structural mechanism is meant to be defensive. That is a fantastic place to look for implementing crop protection solutions, and we intend to invest in more research to launch more plant-based products.
Looking ahead, where do you think Stockton will have the biggest impact in terms of the reach of its products?
Our vision for Stockton is to become a place of innovation where ideas become realities that can be applied in new and different ways. We want to bring our new technologies all the way to the individual farmer. Part of our mission is to help create technology that will benefit all of humanity. It would be great if Stockton could succeed in actualizing this goal.
What are your expectations for 2016?
The same challenges I mentioned earlier apply to 2016, as well. We are preparing to enter the complex US market, while working on the launch of at least one or two more products during 2016-17. We are also planning to accelerate our development through M&A, and acquiring either products or companies in order to deepen our development pipeline.