3 March 2000

A plough-to-plate service

By Andrew Blake

FURTHER details of how the UKs largest agrifood business and Europes leading crop protection player are uniting (Business Jan 17) to develop a full plough-to-plate service emerged last week.

The move sees Associated British Foods Cereal Industries, including Fishers and Allied, joining forces with Agrovistas Crop Care and Profarma crop protection businesses. But separate company identities will continue.

"Its not a merger," stresses Chris Peck of Fishers Group. "It is an alliance of businesses with greater emphasis on the respective skills of each." That will provide greater buying power, economies of scale and an integrated package so farmers can market fully traceable products to suit end-users.

The partners 250-strong sales force will be able to offer broader advice and producers will be able to source inputs and sell through the same overall business.

"The aim is to add value to the farmer, to produce efficiencies in the supply chain and offer an integrated package without common ownership," says Mr Peck. "Demands for integrated, traceable supply chains and food safety are getting greater. Farmers are not commodity growers, they are part of the food chain."

Advice spanning the whole food chain is vital, agrees Crop Cares David Caffall. "Our farmer customers no longer think in terms of boxes labelled seed, fertiliser and crop protection. Increasingly they expect people who service them to give advice across the whole spectrum."

The move allows each partner to plug gaps in its services without significant on-costs, adds Ian Douglas of Allied Grain. There will be no requirement for users to accept the whole package and terms of trade will remain negotiable. "But it is inevitable that the more business you do the better the deal you will get," he says.

The new joint venture will draw on results from over 36,000 crop trial plots each year, explains Profarmas Paul Singleton. Dealing with large companies also offers peace of mind, he adds.

Historic reasons mean very little overlap between existing sales forces, even where both operate, as in East Anglia.

Main duplication is seed production, the CWS/Broadoak processing plant in Goole being a casualty, leaving three in Oxon, Norfolk and Yorks. The Proleaf seed brand will continue.

&#8226 Last year ABF had net assets of over £2b and Agrovistas parent Marubeni, the seventh largest company in the world, had a turnover of $99b. &#42

ABF/AGROVISTAUNION

&#8226 Joint venture not merger.

&#8226 Plough-to-plate package.

&#8226 Plugging advice gaps.

&#8226 Little customer overlap.

Internet impact

THE dot/com buying revolution could account for more than half the industrys use of inputs, but will mainly focus on commodity type items, say players in the new venture. Back up advice on a wide range of issues, not just how to use chemicals to best effect, will always be required, they argue. "One of our customers is just on his third set of herbicides because the weather hasnt allowed him to get on," says David Caffall. "Yes! You can buy cheaper [on the Internet], but then if you dont get it on, you sit and look at it for a year. It is then that you ask What is service?" Help with LERAPs, nozzle selection, watercourse definition and how to draw a farm map are all part of that service, he maintains. "There is still a huge need for people to get that sort of information."

Joining forces to enhance each others skills for a plough-to plate service are (from left) Chris Peck, Ian Douglas, Paul Singleton and David Caffall.