That was an speech at 13o NewAg International Conference in Rio de Janeiro March,15, 2013.

1. TRENDS IN THE BRAZILIAN
DISTRIBUTION SYSTEM
FOR AGRO-INPUTS
Wanderson Rodrigues
2013, March, 15

2. Visao fundação Marcelo prado
... our way of seeing

3. 15
years
70
consultants CORPORATE
GOVERNANCE
25
states
300
cities
500
dealers
100 Argentina
mpradogc.com.br
Bolivia
Brazil
large Paraguay
Portugal
farmers UK
60
coops

4. Agribusiness
Brazilian
GOVE
CORP NANCE
R
ORAT
MA
BU AGE
19
2010
-­‐
N
SIN ME
E
ES NT
9
S
-­‐
0
00
20
TR
AD
E
99
0
-­‐
199
TECHNOLOGY Source:
Mprado
2011
1970
-­‐
89

5. Buying Groups
1%
Coops
WHERE THE BRAZILIAN 21%
FARMERS PURCHASE Dealer
46%
THEIR INPUTS? Industry
32%
Source: KFF Group 2012

6. (Dealers and Coops)
66% Agro-inputs
↑2012 45% Fertilizers
$1,7
bi 60%
Crop Protection
82% Seeds
Source: ANDAV 2012 and MPrado survey with industries
INPUTS SOLD BY THE DISTRIBUTION CHANNEL
(Dealers and Coops)

7. FARMERS PURCHASE
OF CHEMICAL PRODUCTS
(agribusiness Size X Channel)
Source: Kleffman 2012 and MPrado Survey
50%
17% 17% 16%
Small Farmers Medium Farmers Large Farmers AG Companies
Redistributors Direct Sales Direct Sales Direct Sales
Channel Dealers Dealers
Redistributors

8. INTEGRATED
VALUE CHAIN The
actors
in
this
market
need
to
deal
with
it
is
the
weakest
link
in
the
chain
that
defines
their
level
of
compeBBveness

9. GOOD EXAMPLE
MAY 2012 Press Release 201
2
Source: Syngenta
Syngenta supported some dealers to capture 86Mi R$ in a
transaction using CRA at Bovespa Securities Market.
The goal was to capitalize some of the dealers, help them
to become more competitive and enable them to sell a
range of products (chemicals, seeds and fertilizers).

10. Who can
best understand the
Brazilian market needs?

11. PANORAMA OF BRAZILIAN
AG DISTRIBUITION
8.322
8.000
↑ 4,02% in 10 years
↑ 6% average profitability
↑ 1,5% default rate
2002 2011
Source: ANDAV 2012 and MPrado

12. THE RUIN OF
AG DEALERS IN BRAZIL
(main causes)
Lack of corporate governance
§ High levels of farmers’ default
§ Indebtedness with suppliers and banks
§ Low quality Management
§ Disharmony between partners
§ Misalignment in partnership with industries
§ Small product portfolio
§ Expansion and diversification poorly planned
§ Difficulties in complying with the local, state and federal laws
Source: ANDAV 2011 and Mprado

13. MAIN CHANGES IN FARMING BUSINESS
• Prioritizing main crops
• Outsourcing services
• Strengthening partnerships with dealers and industries
• Adopting Hedging
• Using of state of the art ag technology (seeds mainly)
• Valuing better trained and prepared workers
• Implementing management information systems (ERP)
• Professionalizing marketing and management
Source: 500 company study MPrado 2012

14. MAIN CHANGES IN CROP PROTECTION
BUSINESS
• Crop industries merge and takeovers
• Growth of generics
• Molecules Exchange between industries to maximize portfolios
• Customer segmentation
• Business Clusters (geographical - customers - crop)
• Formal Business Agreements with dealers
• Solidification of partnerships à industries / dealers
• Plant Protection moving from chemicals to seed resistance
through biotechnology
Source: 500 company study MPrado 2012

15. SCENARIO AND TENDENCIES IN THE
DISTRIBUTION OF AGRO-INPUTS
• Expansion of Dealers (concentration)
• Improvement in professional management
• Investment in education to develop talents
• More compliance with the Law: tax, social, environmental
• Sales Force Automation and CRM
• New services and integrated solutions
• Strengthening of relationships with main suppliers
• Rigidity in credit management for farmers
• Importance of dealer capitalization to offer fertilizers
• New Business Models (partnerships among dealers and between
dealers and other players like food industries)
Source: 500 company study MPrado 2012

16. Distributors management
MANAGEMENT:
Room for improvement
Key Performance Indicators
Management reports
Inventory turnover
Sharing decisions
Internal and external communication
Risk management / Credit Management
Environmental regulation
COMMERCIAL:
Customer Management
Sales Force Management
Market Intelligence
Source: 500 company study MPrado 2012

17. Distributors management
FINANCES:
Room for improvement
Annual budget
Cash flow management
Investments Valuation
HUMAN RESOURCES:
Payment by results (wage and benefits)
Performance Evaluation
HR Policies Management
Source: 500 company study MPrado 2012

18. What does the future hold for Agro-inputs
distribution in Brazil?
In the future, the local distribution of
agrochemicals will follow the American or
European model?
Farmers will keep buying products or
convenience services?

19. ”… 40% of the increase
in global agricultural
production will What are
come from Brazil
in the next years. “
Marco Antonio Nasser, Chairman of the Board ANDAV
going to do?

20. TRENDS IN THE BRAZILIAN
DISTRIBUTION SYSTEM
FOR AGRO-INPUTS
Wanderson Rodrigues Silva, CCI
Director
wrs@mprado.com.br
+55
(34)
3228-­‐3300
+55
(34)
9192-­‐3366