Gustafson's technology gaining attention.
Recently, Bayer CropScience LP in the United States and Bayer CropScience Inc. in Canada purchased Crompton Corporation's 50 percent share of the Gustafson seed treatment business in the United States, Canada and Mexico.
AM: In light of the recent acquisition, what do you feel makes Gustafson an attractive investment for Bayer CropScience?
RT: Bayer is a very active participant in the seed treatment business globally. In 1998, the company made an investment in North America by purchasing 50 percent of Gustafson, the leading seed treatment company within the NAFTA region. Bayer's recent acquisition of the remaining 50 percent ownership in Gustafson is a further investment in a business considered to be a core area of interest to the company globally.
AM: What benefit does the acquisition bring to Gustafson?
RT: As part of the Bayer organization, Gustafson products become part of a market-leading lineup. We will benefit from the research and development efforts Bayer makes in the area of seed treatment products. And we'll have the opportunity to more fully participate in a variety of product marketing initiatives that can allow us to successfully compete in an increasingly competitive market, while delivering value to the producer.
AM: What kind of growth has Gustafson and the seed treatment industry experienced in the past few years? Are you seeing greater adoption of your products by growers?
RT: For much of our history as a company, few others had significant interest in the seed treatment business. But in recent years, the introduction of new products has opened new categories of business for Gustafson and drawn the attention of others. Take seed-applied insecticides for example. In 1995, Gustafson introduced Gaucho[R] seed-applied insecticide for use on cotton and sorghum to help reduce the damage caused by early season pests. Subsequently, Gaucho was introduced to potato and canola producers to help control different pests but for the same reason. Most recently, corn producers have experienced improved stands and plant health resulting from reduced early season insect damage. The success of this product in each of these markets has ignited a revolution in crop protection technology following the use of Gaucho.
This year, with the introduction of Poncho[TM] 250, Poncho 1250 and other broader spectrum products having similar chemistry to the seed corn market, we have seen this new technology gain a huge amount of momentum. It is estimated that as much as one-fourth of 2004 U.S. corn acreage will be seed treated with one of these insect control products.
Seed-applied technology offers producers the opportunity to reduce labor and equipment costs, ensure accuracy of application and lower per-acre application rates. These are appealing product benefits for which producers have shown a willingness to pay a reasonable price. This, in turn, has resulted in an increasing amount of attention devoted to the development of seed-applied technologies. What we have seen to date is probably just the tip of the iceberg when we think of what may be possible, even probable, in the not-so-distant future.
AM: How does Gustafson market its products? Is grower education of the benefits of seed treatment, new technology and equipment a key marketing component?
RT: Traditionally, Gustafson has focused its sales and marketing efforts on the seed conditioner, including seed companies and on-demand seed conditioners. Historically, producer-targeted marketing efforts were designed to support a conditioner's local sales efforts since the seed conditioner actually chose the seed treatment package (typically one or more fungicide products) and seed treatment was offered as a value-added item.
Today, however, Gustafson places a far greater effort on promoting the company's products to the producer, even though the vast majority of our products are applied to seed by a professional seed conditioner. With increased competition and the introduction of seed-applied insecticides, seed treatments have now often become an option offered by the seed conditioner to their customers. And seed conditioners have clearly communicated the need for Gustafson to promote the benefits of our products to their producer-customers.
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|Title Annotation:||View From The Top|
|Date:||Jun 1, 2004|
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