In March 2021, the South African agricultural market witnessed a major industry consolidation when leading local companies Villa Crop Protection and Intelichem Group announced their merger, forming WinField United South Africa.
WinField United is the crop protection input business unit of the Land O’Lakes Group in the United States (US), which has been investing in Villa Crop Protection since 2015. What changes and innovations will the integration of these two companies bring to the agriculture and crop protection market of South Africa? Recently, AgroPages exclusively interviewed Dan Hennessy (Vice President at International of Land O’Lakes) and Jan Vermaak (CEO of WinField United South Africa), who introduced, in detail, the strategic development plan of Land O’Lakes, the resource advantages of Villa Crop Protection and the Intelichem Group, and the development strategy of WinField United South Africa after the merger.
"The global agrochemical market and the South Africa market seem poised to grow despite persistent challenges, such as increasing requirements for integrated pest management (IPM) and precision farming, more regulation based on consumer demand for sustainably-produced food, the role of agrochemicals in tackling climate change, the rise of biorational products, and the growing popularity of indoor farming, all of which can reduce traditional agrochemical revenues. As such, the agrochemical industry must continue to drive growth by capturing value through innovation, resourcefulness and digital alchemy.
However, longer product development cycles and escalating costs, increasingly stringent regulatory requirements and the accelerated pace of change within and in adjacent markets must be addressed.
The South African industry is witnessing similar changes and facing many of the same issues as other markets. Rising input cost, increased competition and farm/channel consolidation, and financing challenges for growers considering the demise of the Landbank are all putting significant pressure on margins across the supply chain. As a result, local companies are working hard to position themselves to deliver value in an increasingly commoditized marketplace.
Challenges can create opportunities for companies that are willing to evolve with the market. The current pressure on the industry is accelerating their evolution. Companies are looking very closely at their supply chain costs, value propositions and offerings to growers. Return on investment is becoming the key driver of farm decisions.
We are seeing the rapid embrace of new technologies, and we expect that pace to accelerate. Digital adoption, demand for biologicals and increased export residue requirements are changing how companies enter the market. Access to scale and innovation will be key going forward."
Jan Vermaak: CEO of WinField United South Africa
