Enkhuizen, The Netherlands
January 2003
What is INCOTEC offering to the market and what does it stand for?
INCOTEC was one of the first companies to offer seed coating and seed enhancement technology, and it has become one of the leading companies in its field. Worldwide, we have an enormous technology potential and a wide product range of more than 300 different product combinations. We have products for many seed species and products that have been adapted to the local needs of the different growing areas in the world. The available technologies range from priming, film-coating, pelleting, and upgrading to the disinfection of seed. These technologies are available in many different combinations, each one making a unique and high quality product.
INCOTEC offers services to the global seed industry by adding value to the seed. INCOTEC strives to combine extensive expertise with a broad range of highly reliable and consistent products. Seed is living material, it is never the same and is constantly changing in its behavior. A seed coating and seed enhancement technology company needs to devote a lot of time to the small details. A small change can have enormous consequences and can result in a product that may not be performing as expected.
Around the world, our people are very quality conscious. They are working every day to make good products with very consistent results. The key to our success is the strong and long-lasting relationship we develop with the owner of the seed: the seed company. We always seek to create win-win situations for all involved: our customers (the seed companies and seed dealers), and their customers: the growers. INCOTEC's reputation is built on being a reliable partner and on developing and producing strong products that deliver good results for our customers. We strive to produce very consistent products because our customers have spent lots of time and effort on the development and production of their valuable seeds. We take the greatest care of the seed that is entrusted to us, we add value to it, and we ensure that it performs consistently.
INCOTEC is a true specialist with a strong focus on its core strengths. We will continue investing in the development of new technologies and improved products. We believe that our expertise and many years of experience will enable us to keep adding value to the seed by developing increasigly innovative technologies and unique products.
How does seed coating and seed enhancement technology add value for the grower?
Seed coating and seed enhancement technology has enormous potential and has become an essential element of success in the production of many crops.
You can divide the technology into two main groups:
The coating technologies, which consists of applying a coat around the seed, from a very thin layer, as in the case of film coating, to a thick layer, which results in a real pellet. This enables us to improve the sowability of the seeds by making them dust-free or by changing the shape and the weight of the seeds. The nice thing about this technology is that you can add all kinds of things to these layers, such as crop protection compounds, biologicals, nutrients and other additives that protect and stimulate the growth of the young seedling.
Enhancement technologies, that improve the germination and overall quality of the seed. Here we can talk about priming seed in order to break all kinds of germination dormancy or to prepare the seed to germinate better under conditions that are not always optimal. Also, selecting high germination seed from low germination seed is an essential tool to improve the overall quality of seed lots. It is very important to give the grower seed that is clean and free from certain diseases. Although seed companies are doing everything possible to produce seed free from the so-called seed borne diseases, it sometimes can happen that seeds are infected. INCOTEC has developed disinfection technologies that enable us to make such seed suitable for planting.
The name INCOTEC stands for INtegrated COating and seed TEChnology, meaning that we are combining these different technologies to ensure for the grower more uniform emergence, a better stand establishment, and the ability of the seed to overcome unpredictable climatic conditions in the field.
A year ago, on January 11, 2001, Seminis sold INCOTEC to the management of Incotec and the venture capital firm NeSBIC. What has happened during this first year and what are your feelings after one year on your own?
It has been an exciting year for us because we had to prove to the industry that we were able to stand on our own feet, completely independent from one of the largest seed companies in the world.
This first year went for us as expected and we are very happy about the further growth and development of our company. We were able to put INCOTEC in a financial very healthy position and to create continuity for the INCOTEC companies and INCOTEC people who have been working for many years in the company.
We believe that we are a very good and strong partner for seed companies all over the world because we excel at developing and producing very strong and innovative products. This move to a completely independent position was a big change for us, but I can say that the team reacted remarkably well to the new situation and and that everyone is moving ahead with a new spirit, giving a new dimension to the success of INCOTEC.
After the sale of INCOTEC, some people might have had their doubts about this move, but we think we have proven that INCOTEC is a strong and solid company, with great potential as an independent company.
Why did INCOTEC go through a Management Buy Out?
In 2001, our previous owners, Seminis, indicated that they wanted to sell INCOTEC because they did not view INCOTEC as part of their core business any longer. This was a normal reaction, and you see that more and more seed companies are taking this position. Seed coating and seed enhancement technology has become so specialized and requires such cutting-edge expertise and skills that it often doesn't fit in a seed company anymore.
This is a general trend throughout the seed industry, and if you look at other industries like the car industry or the electronic industry, you find that outsourcing of very specialized technologies and services has become a common practice.
When Seminis announced their intentions to divest INCOTEC, we decided that it was very important for us to keep the INCOTEC concept and philosophy alive and avoid a situation where these would become diluted or altered by a new corporate owner. All INCOTEC managers strongly believe in the value and long term success of this concept.
We also felt that we had an obligation and commitment to all our customers who had supported us all these years, and that a management buyout would put the company in the best position to fullfil this obligation. We were fortunate to find a strong and committed partner, the venture capital firm NeSBIC.
It has been both enormously challenging and very rewarding to succeed in steering INCOTEC into a completely independent position and to continue the business which we started many years ago.
How do you see the future of seed coating and seed enhancement technology within the seed industry, and how do you see the future for service companies like INCOTEC?
We see that the market in seed coating and seed enhancement technology is still growing and has an vast potential for further growth in many regions of the world.
We estimate that our market will grow between 5% and 15% each year. Seed coating and seed enhancement technology is becoming increasingly complex and requires increasingly larger investments in research, production facilities and know-how. To develop and produce the many different product combinations necessary to meet the demand of growers around the world, and to do so while ensuring profitability, you need to reach a certain scale of operation.
We therefore believe that, from an economical stand point, it will become less and less interesting for seed companies to invest themselves in this technology because the return on their investments is too questionable and too low. We believe that seed companies will focus more and more on their core activity, which is the breeding and production of seeds.
This does not mean that all seed coating and seed enhancement technology products will be produced outside the seed company, because seed companies will increasingly license this technology for in-house use or establish partnerships with specialized companies to develop products that meet their specific needs.
We are fully prepared to react to these developments and to serve our customers worldwide.
How do you ensure that your customers around the world keep up with both the extraordinaty opportunities and the real constraints of the technologies you offer?
INCOTEC is the only company in its field that has a broad, worldwide network with production facilities and well trained technicians on all continents.
We have the ability to serve international and local seed companies with products that are specially adapted to the local needs of the growers. We are experiencing tremendous growth in product diversity in all these climatic zones and markets. We have our own local experts who understand specific requirements of the various markets and speak the language of the growers.
We are not sure that the industry fully understands the complexity of the seed technology market and the considerable efforts it takes to create and maintain products that fit the precise needs of each local market. In order to do a good job for all our customers, we are taking it one step at a time.
It is not always easy to explain what it takes to create superior products that perform consistently, but we do our best to ensure optimal communication with our customers. We take particular care in explaining that it takes time to create a really reliable product, because we are aware that it sometimes conflicts with the expectations of our customers for prompt delivery. Keeping the communication channel open at all times is essential when you want to deliver the right product at the right time.
As our customers expect shorter and shorter delivery times, the peaks in our production season are getting bigger and bigger. We are investing a lot in our organization and production facilities to get things done in time. The downside of success it that your production capacity can at times become a limiting factor. To prevent that from happening, we do all necessary planning with our customers well in advance. We are part of the supply chain and logistic system of the seed industry, and we strive to be as efficient and responsive as is required in this dynamic market.
What have you learned during your years in the seed industry?
I have been working for 25 years in this business and I can say that the seed industry is a very special industry. Because we have to deal with Mother Nature, not everything is as predictable as we sometimes want it to be. We are sometimes facing disappointments for reasons that are not always under our control. This is a knowledge industry that requires well trained people with a lot of experience and expertise.
Therefore, a company like INCOTEC is not a just company with machines and technology, it is a company with people, and every one of them is an essential part of our success. Almost 50% of our people have been with us for more than 10 years, and they have accumulated considerable expertise in their field. Our people are our main asset. We work hard to make them stronger, to increase their knowledge and expertise, and to make sure that their work environment is stimulating, challenging and rewarding.
How do you see the future of the seed industry?
Our industry has gone through a major transition during the last 20 years. At the present stage, every company has to focus increasingly on its core activities and core expertise. All of us have to concentrate on what we are good at.
The business is evolving in such a way that it is no longer possible to do everything yourself. It is my belief that seed companies who, in the past, were able to do everything themselves, must now make choices about what they want to do in-house and what they want to subcontract to external partners.
In all these years I have learned that seed coating and seed enhancement technology is becoming more and more a core activity in itself, requiring highly specialized skills and heavy investments in research and development. At INCOTEC, we are ready for these new times and our people have the drive and expertise to make our dreams a reality.
For more information about INCOTEC, please visit www.incotec.com
Interview with Jan Willem Breukink, Worldwide Managing Director, INCOTEC International BV, The Netherlands
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