AmVac sees Brazil as prime user of new pesticide application system

SAO PAULO (Reuters) - Executives at agrochemicals company American Vanguard Corp AVD.N, or AmVac, believe farmers in Brazil will become the prime users of a new pesticide application system being tested in the United States.

The SIMPAS system allows farmers to apply multiple crop protection or fertilizer products at one given time while calibrating the exact amount of inputs to use in specific parts of the field, potentially minimizing dosage and optimizing resources, the executives said on Monday.

AmVac plans to introduce the system in Brazil one year after the full U.S. launch scheduled for 2021, Chief Operating Officer Bob Trogele said ahead of a trade show in São Paulo.

Aside from pesticides, AmVac sells specialty fertilizers, a $2 billion market in Brazil, said Thomas Britze, country general manager and head of Defensive & Agrovant, a local firm AmVac acquired for an undisclosed sum in January.

Brazil is one of the world’s biggest agrochemicals markets with sales of $10.5 billion in 2018, according to industry group Sindiveg.

The country became a key area of focus for AmVac since it started an international expansion, Trogele said, although he declined to reveal how much sales AmVac can generate here.

Currently AmVac derives 60% of sales in its U.S. home market and 40% externally, Trogele said.

Regarding its short-term strategy for Brazil, AmVac executives, who previously worked for Bayer AG BAYGn.DE, said the company will grow organically and potentially through acquisitions.

“If we see anything that looks bolt-on, we will look at it because we are an acquisition company,” Trogele said.

“Each week I get a proposal from an investment banker or direct contacts from companies to sell their business,” Britze said.

A more immediate priority is hiring 10 sales representatives and launching a nematicide product for farmers to fight soy rust, the executives said.

AmVac estimates five companies command an 80% market share of Brazil’s pesticides market after a global consolidation wave.

While the firm will tackle rivals head on, AmVac wants to differentiate itself by selling chemicals together with an application technology it calls “disruptive” for protecting the worker, sparing the environment and delivering multiple inputs at a variable rate.

“We will get access to customers who are not happy with the consolidation,” Britze said. “[Farmers] don’t want to depend on only one or two companies and this will open new doors.”

Reporting by Ana Mano; Editing by Bill Trott