Corteva is on the right track and determined to execute its strategic plan for the upcoming year, says James C. Collins, Chief Executive Officer, Corteva Agriscience while speaking at the recent Deutsche Bank’s Global Basic Materials Conference where he outlined the company's goals and core strategy.

Explaining the same, Collins said, “The main components of our strategy are top line growth in both crop protection portfolio as well as seeds business. It includes driving better margins in seeds to create a mix of products in crop protection. As the market conditions continue to evolve, I am confident that we will be well positioned to achieve our goals as well as create value for shareholders this year.”

Speaking to David Begleiter, Research Analyst, Deutsche Bank Chemicals, Collins said, “Our business is based on the strong fundamentals. Having finished FY20 on a strong note, we have carried forward the momentum to FY21, as was visibly evident in the first quarter results. We have got a team that has laser focus and is busy executing plans with heads down approach. Despite the uncertain market amid pandemic, uneven recovery going on with pressures fueling raw materials costs, the laser focus attitude is helping us.”

On what is driving the demand, Collins credits China as the largest purchaser of seeds. “China starts to stabilize and as global GDP picks up, we see more demand for ethanol, biodiesel, soybeans, and animal proteins. We have seen a strong soybean herbicide market. North American sales have done well. In Asia, the insecticide sales have been fantastic. I think it's a one year phenomenon with a 2-3 year cycle. Apart from some shortage of molecules and few gaps, it has been quite a normal year.”

On the question of growers’ expectations, he added, “Clearly, the income is a motivator for growers and as the new seasons come, they will look for newer opportunities. Seeds may be commodities for us but they think of it as their first investment. They will continue to go for the best seeds and crop protection molecules. In FY22, they will get the best fungicides and herbicides, as they would have already invested in the crops.”

On the new opportunities, Collins emphasizes corn and soybeans. “These crops are expected to get planted on a total of 182 million acres, out of which 92 million acres for corn and 90 million acres for soybeans. So far we have got corn acres pretty well and we started watching if there would be an extended season. The growers might decide to go for it as additional acres will boost their production. Right now growers are done with harvest season. We have witnessed how growers in Brazil and North America are eager to get information on supply of crop protection chemicals beforehand to avoid scarcity later. They also want to lock prices early due to fluctuating foreign exchange prices.”

Collins believes that the crop protection pipeline continues to deliver. “What I like in the crop protection portfolio is the diversity of molecules across indications and diversity of crops and geographies they are going into. For FY 21, we have 3 active ingredients that have so far delivered US $300 million in net sales. It is just outstanding that three products have delivered such a figure. It is helping us demonstrate that we are on track to deliver new crop protection products worth US $1.3 billion in the pipeline.”

On the question of lower margins, Collins said, “We have launched a pipeline that will help overall improvements. We have a significant number of products and we will see the growth over a period of time as it takes time for launches. We have some off patent molecules and we have taken the tough decision to phase them out. It had a small impact on our margins. At the same time, strong portfolio consolidation will see improvement in margins.”

Calling Mergers and Acquisitions (M&A) an incremental opportunity, Collins said, “It can help us advance our strategy in biologics. We also plan to move into digital platforms. There are nice opportunities in vegetable seeds, agrochemicals, and animal proteins. A diversified geographical footprint would be possible only through partnerships.”

Expressing confidence over the company's revenue performance, Collin commented, “Things are happening as expected. First quarter FY21 net sales witnessed double digit growth in Latin America. Sales of new and differentiated products drove volume and prices gain in crop protection. Net sales grew 12% with new product sales garnering US $120 million compared to previous year. Seed net sales rose 2% and organic sales over 3%. It was driven by new product penetration and local price gains which more than offset an impact of seaso$300 million in revenue by FY23. However, the way we see the thing set up in fall, we will be seeing US $300 million by FY22 itself. This is a great testament that it's a demand for the system. It's not just the seed but also herbicide. It's all gone just like we hoped.”

Sharing his outlook, Corteva CEO said, “We believe we will hit the sales volume targets this year too. We have been swamped with grand sales from legacy brands. The same kind of foundational sales are going into FY 22. Since retail business forms 20% of our market share, we are looking at the quality of our retail business from a margin perspective. Besides North America, we have launched products in Brazil, Argentina, India and other parts of Asia. We have sold outside of the US and have a good history of clear segmentation. It's always a competitive market, especially Soybean with technology transformation."

"We have got great germplasm and overall agronomics. Our track record for the year speaks for itself. While there were others who saw terrible decline in those markets but we have navigated through. Despite the single digits and the commodity prices being low, we still demonstrated how to extract value from the market even in tough times,” added Collins.