Global Growth Strategy Might Mean Equipment Flexibility
With the maturation of the domestic seed treatment market, one might be looking for growth opportunities. While our market share here is fairly high, we are looking to grow and that means moving outside our traditional territory and even half way across the globe. But with that, we know there are points of difference that must be accounted for. A few of which include logistics, understanding tariffs and servicing equipment.
We are evaluating global opportunities, including Australia, Canada, Central America, Europe, South Africa, South America (Brazil and Argentina). These are places where similar planting methods are used and where we also have good relationships with possible partners. But that alone doesn’t mean a certain locale is a good place to start up business.
As we expand into new geographies, four considerations rise to the top:
· Timing of and number of planting seasons. Does their planting season coincide with the U.S. planting season? Do they have more than one planting season? For example, parts of South America can have up to three, whereas other parts of the world only have one. Our business is very cyclical. We do a significant amount of work leading up to planting (October – March). We have to think about when equipment installations and commissioning that equipment would be the highest.
· Time zone. When we think about support for future customers, considering how their time zone compares to ours is a must. How we go about supporting those in South Africa might be very different than how we support customers in Canada. Because of the difference in time, it might make more sense for us to have a local support person in South Africa; whereas, in Canada we can easily provide the support needed from here.
· Complexity of the equipment currently in use. Here, the downstream seed treating market has been established for about 15 years, but that’s not the case around the world. We don’t want to take our equipment as it is to areas that aren’t ready for it. Our equipment can treat 1,500 to 2,000 pounds per minute, but they might only need half of that. Full automation, how it’s integrated and capacity might make it cost prohibitive. We must take a fresh perspective and consider the needs of our customers where they are. For example, in parts of Mexico, there are no semis or seed tenders. They more or less use mini bulk bags.
· Tariffs and shipping logistics. When it comes to getting our equipment in the hands of potential customers, are local tariffs too much to incur? If so, can we manufacture the equipment locally and avoid these tariffs and shipping costs? For example, shipping equipment to Australia is relatively easy with containers; however, Brazil has restrictive tariffs. So it might make sense to manufacture our equipment in Brazil. These two countries offer great opportunities but we have to manage them very differently in our approach.
Remember: If you’re looking for global growth, you must stay involved and be engaged in those areas. Regardless of where you might find our equipment, we look to stand behind it as the manufacturer. That means we will keep our same commitment to service and support that one might find right in our backyard here in Sabetha, Kansas.