Large market
Growth in South America
Argentina and Brazil are key markets for corn seed. KWS is investing in new plants and setting store by a strong brand.
KWS is doubling corn seed production capacities at its locations in Brazil and Argentina and pressing ahead with its growth strategy in South America. The company is investing a total of some 21 million US dollars.
At Patos de Minas in Brazil, around 217 miles southeast of the capital Brasilia, KWS is increasing its annual production volume from 900,000 to more than two million units. At Manuel Ocampo in Argentina, around 143 miles northwest of Buenos Aires, the volume is being expanded from 400,000 to 700,000 units.
Milestones in the growth strategy
With cultivation area of just over 37 million acres, Brazil is the world’s third-largest corn market after the U.S. and China. KWS’ two South American sites have a horizontal design that allows the seed to be transported from one processing step to the next efficiently and with minimal mechanical stressing. That has a positive impact on germination capacity, vitality and quality.
According to CEO Hagen Duenbostel, the new production plants are milestones in KWS’ growth strategy, and corn is already a key pillar of the company’s business in North and South America. KWS’ goal is to become a leading vendor in Brazil and Argentina in the medium to long term.
KWS is investing around 21 million US dollars to become a leading vendor of corn seed in Argentina and Brazil in the medium to long term
A strong KWS brand
With that objective in mind, the Business Unit (BU) Corn and Oilseed America evaluated its dual brand strategy. Internal and external analyses show that focusing on a single KWS brand will increase competitiveness, market penetration and the level of service for dealers and customers.
On the basis of that, and following a presentation to the Executive Board, the Brazilian brand Riber is being merged into the KWS brand. This consolidation will allow the company to better implement its strategy in the entire Brazilian market. At the same time, it can strengthen its overall position and ensure further growth, according to Alexander Drotschmann, Head of the BU Corn and Oilseed America.
Development in Brazil
Products, distribution and employees are now being integrated under the KWS brand. The Riber brand will be discontinued effective the winter season. KWS bought the corn seed company Riber seven years ago, since when KWS has increased its market share in Brazil from around three to some seven percent. The Riber brand accounts for almost ten percent of KWS’ net sales in Brazil.
In addition, KWS launched six new hybrid corn varieties in Brazil in 2019. |
Info:
Alexander Drotschmann
alexander.drotschmann@kws.com
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