Syngentaís Paul Backman talks about the future for growers and discusses the companyís plans for serving tobacco-farming customers.
Backmanís only been working in the tobacco industry for a short time, but he already loves working with the crop. Itís beginning to look like tobacco has a bright future in the U.S., he says, and itís great to work with farmers that have such a positive outlook.
TFQ: Please give us a little bit of background about yourself. Work history. Current responsibilities, etc. How long have you been working to serve tobacco growers?
Backman: Iíve been in the industry for 12 years. I was a sales rep for a couple of companies in the Midwest and, later, in the Mid-Atlantic region. Iíve been in my current marketing positionóas Syngenta crop manager for tobacco, peanuts, sugar cane and pecansófor the last three years, but this is my first year serving tobacco growers in this position. Although I started my career in the Midwest, Iím originally from Alabama and attended Auburn University. As a sales rep in the Mid-Atlantic region, in Maryland and Virginia, thatís where I first started to get into tobacco a little bit.
TFQ: With all of the changes in the industry, some might say that companies that serve tobacco growers face a challenging business environment right now. Are you optimistic about Syngentaís future growth serving the U.S. tobacco-growing sector? Why or why not?
Backman: Absolutely. The challenges the U.S. farmers faced with the quota buyout are resolving themselves. Growers are consolidating and becoming more efficient. Growers have a positive attitude about serving their customers. We want to help them grow that high-quality U.S. tobacco.
TFQ: What will be the greatest challenge that faces Syngenta in serving this market?
Backman: The greatest challenge we face is competing with lower-cost generic companies. Devoting resources to this effort [makes] it more difficult for us to continue investing in new products. This is a problem in the U.S. and other markets.
TFQ: How do you deal with this challenge?
Backman: Our strategies to deal with it are constantly evolving. First and foremost, we strive to enhance the services associated with our branded products and thus deliver more value to the growers. In addition, we sometimes offer our own cost-competitive brands to compete with generics.
Around the world, we have total revenues of approximately $8 billion per year. Of that, $800 million gets reinvested into research and development of new products.
TFQ: What are the companyís plans for growth in the domestic tobacco market? Any new products or services on the horizon?
Backman: We are trying to add new services to complement our products. One part of this is process is a new service for tobacco growers called AgriEdge. AgriEdge is a software program that maps fields and tracks all inputs from the time the plant is put into the ground to harvest. If a customer comes back to a grower and wants to know what went in the field that season, a grower can go to the software and hand them a printout Ö. We started this service several years ago in cotton, but itís now available to tobacco growers Ö. One thing thatís nice about it is that it can be used for the many different crops that a grower may be producing.
There are other programs out there that help growers track inputs, but we have software specialists that offer a high level of supportócomparable to the support we give our crop protection products.
TFQ: What does this program cost?
Backman: There is only a nominal cost associated with setting up a growerís computer to be able to use the system. We provide AgriEdge to growers as a value-added service. When somebody purchases a gallon of Prime Plus, he doesnít just get the product. Heís also buying the service that goes with it.
TFQ: How many tobacco growers are using it right now?
Backman: Well, we are just starting with tobacco right now. There are about a dozen or so growers currently using it. We intend to expand the number of users in the future. In fact, weíre in the process of adding an AgriEdge specialist in the Carolinas. Currently, we have one specialist in Kentucky that works in both flue-cured and burley.
TFQ: Anything else in the works for tobacco growers?
Backman: No other products are currently on the verge of being released, but we do have some things we are looking at. As the market continues to strengthen, it will become more economical to increase funding [for introducing new products].
TFQ: Whatís one of the things you are looking at?
Backman: Right now, weíre concentrating mainly on improving services to growers. AgriEdge is an example of this. Weíre trying to help growers understand what it can do for them as a management tool.
TFQ: How do you feel about the recent U.S. quota buyout?
Backman: Speaking for Syngenta, I think itís positive because it allows U.S. growers to compete on the world market Ö. I think itís wonderful that growers are once again speaking with excitement about this crop. Itís been interesting to see the growers get bigger and more efficient Ö. I think the growers that have stuck it out are going to reap the benefits of staying in.
At Syngenta right now, we are trying to increase the lines of communication with companies like Philip Morris and BAT to see what we can do in terms of reducing pesticide residues, etc. If itís a problem for Philip Morris, then itís a problem for the grower. If itís a problem for the grower, then itís a problem for us.
Weíre trying to keep our ears open for the types of things [the companies] are saying. If they are concerned about residues, we want to be able to make sure first that the concern is realóis it really a problem, or is it a perception? If the concern is real, we want to do everything we can to help with that.
TFQ: How do you think the buyout will affect your business?
Backman: As things become more positive for the grower, then they become more positive for Syngenta. As a result of the buyout, growers are increasing acres, and they are increasing quality and spending the money to protect their tobacco. The growers that are left in it are truly businessmen. They have a lot of money invested, and this is a high-dollar crop. We want to help them protect this investment.
TFQ: Do you think U.S. tobacco farmers will have the chance to increase exports?
Backman: Yes. Definitely. Acres are increasing. Iím hearing a lot of comments that are positive. The tobacco companies seem to be excited about U.S. tobacco. This makes the future bright for U.S. growers.
TFQ: What challenges do you think that American tobacco farmers face? What opportunities?
Backman: From where I sit, the biggest challenges they face are efficiency and manpower. Thereís not a farmer I talk to that doesnít have trouble finding the quality manpower he needs Ö.
We canít help them with manpower, but we can help with the management of their crop and increase their overall efficiency by controlling pests and diseases and increasing their bottom line.
TFQ: What do you enjoy most about working in tobacco?
Backman: Tobacco is an exciting crop. Itís different. Itís much different than the corn and beans that dominate so much of the country. You canít just spray it with something a couple times here and there and wait for it to growóitís a high level of management Ö.
U.S. tobacco is not a commodity like other crops. Itís not like soybeans, where soybeans from Brazil are pretty much the same as soybeans from the U.S. or anywhere else. U.S. tobacco is viewed as the best in the world. Itís great to work with growers that have that level of pride in what they do. And they should be proud.
TFQ: What is the most interesting story you can share after working in this business?
Backman: One of the things thatís most interesting about working with tobacco growers is the level of excitement they consistently display. There is not one crop I work with right nowónot oneówhere the growers are as excited about what they do. The increasing connectivity between the growers, the buyers and the companies that serve the market is exciting to watch.
Things are changing quickly. I remember when I did an internship in college, we worked with a grower in Georgia who had 70 acres of tobacco. And everybody thought that guy was huge. I mean, that was a really big deal back then. He was considered a major player. Today, thatís not big at all.