NEWS

Focus on Southeast Asia

20/01/2021

Semillas Fitó has managed to grow and successfully overcome the challenge of internationalization, maintaining its firm commitment to being an independent and family-owned business. The key to this growth has been its commitment to R&D&I, which receives an investment of 20% of annual turnover, making it the agricultural company that most invests in research.

The company, which is a clear leader in the Mediterranean and South American markets, opened its subsidiary in India in 2014 with the aim of entering the Southeast Asian market.

We spoke with Enrique Roca, Director of Sales and Marketing for Southeast Asia, to learn about the ins and outs of this market and its strategic value.

What is agriculture like in Southeast Asia?

Agriculture in Southeast Asia is still developing. Farmers own very small plots which they work themselves. In Myanmar, for example, 70% of the population subsists from agriculture, which is underdeveloped and where there is little investment in agricultural inputs. They have very little knowledge about the main technologies used in modern agriculture. But there are reasons to believe that a change is taking place. Initiatives such as Fresh Studio in Vietnam and Fresh Line in Myanmar are proof that agriculture in these countries is in the process of being modernized. Both companies are dedicated to improving and guaranteeing food production.

Why is the Southeast Asian market important for Semillas Fitó?

The Vegetable Seeds division has set the target of reaching a turnover of €75 million in 2022-23. The contribution of the Southeast Asia region is essential to achieve this ambitious goal. SEA (Southeast Asia) is one of the division's "Growth Levers" together with Foodture, "Processing" and "Bulk Sales". Almost 7% of sales of the Vegetable Seeds business unit will come from that part of the world in 2023.

Which countries offer the greatest potential for Semillas Fitó? Why?

India, Vietnam, Thailand, Taiwan, Malaysia and Myanmar. In the first place, India, not only because of the enormous size of its market (more than 13.5 M hectares) but also because of its growth, especially in protected agriculture. Currently, there are already more than 12,000 ha of greenhouses and with double-digit annual growth rates.

What crops have the highest sales potential for Semillas Fitó in the region?

Tomato, pepper and melon varieties seem to be better adapted to the growing conditions of these countries. We recently launched the first Fitó catalog for Southeast Asia with varieties of tomato, pepper, eggplant, cucumber, melon, courgette and watermelon. As more research programs open up, we will be able to develop varieties that gain customer share in countries where we previously did not have a presence.

What are the main short, medium and long-term objectives?

The goal is to grow organically and consolidate sales with customers. To build and train a strong team. In the next 5 years, create the foundations for continued and profitable growth. The advantage of Asian markets is that they are in the process of transforming from subsistence farming to higher value-added farming. This transformation is taking place as a result of the growth in the purchasing power of these countries, and because they are centers of agricultural production for the rest of the world. This is leading to the progressive professionalization of farmers and the use of higher quality techniques and hybrids.

What are the main challenges? What can we do to deal with them?

Unfortunately, Semillas Fitó's entry into Asia has come a little late and our main international competitors are already well established in these countries. Also local companies, through partnerships and collaborations, have taken huge leaps forward. Fortunately, all these markets still have high growth rates, which should allow Semillas Fitó to position itself especially in the segment with the highest added value.

Semillas Fitó currently has ten subsidiaries around the world and a direct presence in 10 other countries. The company's internationalization strategy is based on proximity, one of the differentiating values of the company whose vocation is to work closely with farmers to help them develop their business through seeds adapted to the local terrain and climate.

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