US crop protection products and technology manufacturer Dow AgroSciences is expanding its presence in Africa to tap into the continent’s potential in agriculture. Dow previously operated in a handful of African countries through distributors, but is now hiring local teams and launching in markets it lacked a presence.[hidepost=9][/hidepost]
Dow AgroSciences produces a wide range of products for crop protection, pest control, vegetation management and crop-enhancing traits. The company has operations globally and made sales of US$7.1bn last year.
Jean Francois Rolland, portfolio manager for Africa at Dow AgroSciences, says the company is making “a very substantial increase of resources” in high growth potential countries such as Ghana, Cote d’Ivoire, Ethiopia, Egypt, Morocco, Tunisia, Kenya and Tanzania.
“This is an important market for us because, as opposed to European markets which are mature, the African markets are still developing and there are opportunities for further growth.”
Improving yields, quality
He adds: “We look at Africa as a place where there are lots of crops for which the yields and quality can be improved. Farmers need sophisticated ways to tackle insect control. So we will invest more because we see agriculture as a driver in their economies.”
Dow AgroSciences is a wholly-owned subsidiary of the American multinational corporation Dow Chemical Company. In Africa it sells herbicides, pesticides, and fungicides for crops like barley, wheat, rice, cereals, vegetables, beans, rose flowers and pineapples.
“We see the Southern and East Africa regions as very interesting developing markets. The West Africa market is a little bit complex because of political instability in some countries. For instance, Nigeria has a problematic political stability, but it is still a big country and lots of people who all need food. We have no direct presence there yet, but are considering it,” explains Rolland.
“We need to step up food production and one place in the world where there is great potential to do just that is Africa. This is where we can get real growth. We have to use existing farmland and intensify production. And to do so we need better technologies that are sustainable,” says Johan Janse van Rensburg, a marketing specialist at Dow.
A new strategy
Janse van Rensburg explains that Dow’s new strategy in Africa aims at increasing its understanding of farming needs by hiring local teams and handling management within the continent. Previously the East African region was managed from France, but now all English-speaking countries in Africa are managed in Africa.
“Local people have a better understanding of the markets here and some of the conditions needed to make things work, such as providing smaller packaging.”
And Rolland adds the best way for international companies to do business in Africa is having a local presence.
“Without that, you cannot understand the local markets, the needs, the limitations and the potential.”
Some of the challenges Dow has faced in Africa include ensuring its products are affordable and, importantly, they are available in the right packaging.
“Other challenges include foreign currency availability. Payment credit terms are also often a difficult subject. Sometimes farmers and distributors may have the need to buy your products but don’t have the means to pay. So we also have the job of arranging the credit side to make sure that they have access to finances,” says Rolland.