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Canadian firm sows the seeds in China

(China Daily)
Updated: 2008-05-12 14:32

Agrium Inc, a Canada-based wholesale producer and retail supplier of agricultural products, recently took its first Chinese business steps in Beijing by establishing a representative office. It offers unique eco-friendly products for China, and is poised to partner local companies to pursue growth opportunities. Mike Wilson, president and CEO of Agrium, in an exclusive interview with China Business Weekly reporter Zhang Qi, shares the company's growth ambition and strategy in the country.

Q: Why has Agrium come to China at this time and in what way can your products help in promoting more efficient use of fertilizer?

A: There are three things you need to understand our company before answering the question. One is who we are, the second is our growth ambitions, and the third is China.

Agrium is the only global company that publicly traded, listed in NYSE and TSX stock exchange, crossing the entire adding-put value chain, which means we supply whatever the farmers need. We supply fertilizer, nitrogen, potash, chemicals, pesticide, and seeds.

We are a large manufacturer and marketer of fertilizer. We manufacture eight million tons of fertilizer in the world, but we market 18 million tons. We market significantly more than manufacturing.

We are also one of the largest retailers in the world. We sell direct to the farmers. In North America, we are three times bigger than the second largest supplier. And in that business, we sell fertilizer, seeds, pesticide and chemical. We sell three billion dollars of seed and chemical last year. And we are going to expand our seed business over 20 percent each year.

We are also the world leader in selling environmental-friendly products. We have nutrients that release very slowly for the plants. We sell a fertilizer called ESN Smart Nitrogen ground with coating which releases in 12 and 16 weeks. So when the wheat crop is growing, the roots start to come out and they slowly take the fertilizer according to its growth rate.

If you look at how we grow, we go through acquisition, building new plants, global distribution, and sales. In the last two years, we made seven acquisitions. We also hold a 20 percent equity position in a Chinese fertilizer company, Hanfeng Evergreen, with whom Agrium has licensing agreements for sulphur coated urea technology in China.

We are currently building a new plant in Egypt, one of the world's largest nitrogen makers. The last is we sell nitrogen around the world. We bought distribution companies so we can sell around the world everywhere except Russia.

Now we are in China because China is a very large agricultural market and there are opportunities for us to grow.

We can help China to import and export products. China need potash, we can help China with potash. China has environmental problems, and we can help China with that problem.

Q: How would you propose to sell your products in the Chinese market? If you choose to go the way of joint ventures, what are your requirements for a partner?

A: Chinese farmers are very traditional. It takes a long time to educate them to change.

The first thing you do is to educate them what you have, and the second is to ask them to try it. Then they will buy it. In North America, it will take 12 months. But in China, it may take longer time.

We are looking for partners who want our products, our expertise, environmental knowledge and distribution technology and who know how to distribute and have production access in China.

A partnership is like a marriage. You don't go just for the weekend or for a year. You want going for the long-term relationship. So it's important that you have similar values, which include the values of the farmers, community, and shareholders.

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