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Contributing to the people in the world with our agritechnology and sincerity

Interview - July 28, 2021

Oat Agrio’s mission is to increase food production as the world’s population continues to increase. Since deforestation is not acceptable in today’s global environment, they have taken responsibility to find new ways to raise food production using the current finite amount of cultivated land. We speak with president, Hisashi Oka, who explains how Oat Agrio has focused on the development of new technologies to enhance efficient food production based on its three core competencies: plant protection technology, drip fertilizer and irrigation technology, and biostimulants.

MR HISASHI OKA, PRESIDENT OF OAT AGRIO CO., LTD.
MR HISASHI OKA | PRESIDENT OF OAT AGRIO CO., LTD.

If we look at the world population, we know that according to UN estimates that it is going to increase to 9 billion by 2050. As such, we need to increase global food production by 60% to 70% and we cannot rely on the traditional farming methods which have been used for more than seven thousand years. Can you tell us what has to be done in order to meet that food production target what obstacles must be overcome?

In 2009, the United Nations issued a statement that the world population will reach 9 billion by 2050. Then, it also announced “The International Year of Plant Protection 2020” in 2020. According to the Food and Agriculture Organization of the United Nations (FAO), more than 80% of the world's food derives from plants, and up to 40% of this is lost due to pests and diseases. Therefore, the FAO states that in order to address important issues such as hunger, poverty, and economic development, it is important to promote and implement measures to protect crops from pests, diseases and weeds. In addition, in the Sustainable Development Goals (SDGs) adopted by the United Nations in 2015, there is the goal of ending hunger, achieving food security and improved nutrition, and promoting sustainable agriculture, which is in line with our company's philosophy: “We contribute to the people in the world with our agritechnology and sincerity”.

Since plants cannot move, they cannot escape from damage caused by pests and/or the deteriorated environment. In the past, pesticides were used to protect plants from pests and diseases, but pesticides alone are no longer sufficient. It is necessary to increase the resistance of plants to pests, diseases and stress caused by environmental changes by enhancing their natural immunity. In addition to pesticides that protect plants from damage caused by pests and diseases, we also have biostimulants that have the effect of enhancing the natural immunity of plants. Moreover, as a way to prevent soil degradation due to environmental changes and water shortage, we have developed a "Fertilizer & Drip Irrigation System" that supplies the minimum amount of water and fertilizer needed, contributing to resource conservation. We are developing our business based on three agri-technologies: Plant protection technology, Fertilizer & Drip Irrigation technology, and biostimulants.

 

It is estimated that 70% of the world fresh water supply is consumed by agriculture. For example, it takes 1500 liters to produce 1 kilo of grain or 15,000 liters to produce 1 kilo of beef which is a huge burden on our global water supplies. What do you think is the responsibility of the agricultural industry to reduce this over reliance on fresh water and what role can a company such as yours play in it?

Water is essential for the production of crops, and it is a fact that the agricultural sector consumes a large amount of water. However, it is also essential to increase crop production in order to cope with the increasing population in the world. It is very important to reduce the use of water resources as much as possible while increasing the production of crops. As one of the solutions, we are selling a "Fertilizer & Drip Irrigation System". It is an environmentally friendly system that supplies the minimum amount of water and fertilizer needed. We would like to contribute to the conservation of water resources through the development and sales of the "Fertilizer & Drip Irrigation System”.

 

If we look at Japan specifically as a country, its topography is notoriously mountainous. Only 11% of the entire country is arable for farming. Can you tell us how should Japan overcome this and reduce its reliance on food imports with agrochemicals? Do you think that agricultural science is the answer to Japan’s arable land area problem?

It is true that cultivable land in Japan is limited and not a large area. Our "Fertilizer & Drip Irrigation System" is used by many farmers even in mountainous areas and contributes to crop production. As for Japan's food import situation, the self-sufficiency rate of agricultural products is about 40%, and the rest is dependent on imports. It is difficult for Japan to be completely self-sufficient in agricultural products, but we are 100% self-sufficient in rice and about 80% self-sufficient in vegetables, and we do not depend on imports for all our food. In order to solve the problem of arable land, it is possible to increase the yield per acre of farmland or to produce crops using plant factories, which have become a hot topic in recent years, but all of these methods require further advances in cultivation technology and systems.

 

We know that your product lines are split into three divisions; fertilizers such as your Samppi or your Plant Protection like your Kligreen, and then your Biostimulants like your Atonik, for example. Can you tell us more about the synergies you have been able to create between these three distinct product lines and what are the best selling products among your business?

Our main fields of products are agrochemicals, fertilizers, and biostimulants. There are many companies that specialize in agrochemicals and fertilizers, but we are probably the only company that has three products in hand: agrochemicals, fertilizers, and biostimulants. By possessing these three products and agri-technologies, we are able to propose right solutions to problems that cannot be solved by agrochemicals and fertilizers alone, by combining these three products and agri-technologies in various ways. By doing so, we will be able to contribute to the solution of farmer’s problems and materialize our business expansion to the future. In the fiscal year ending December 31, 2017, the agrochemicals segment accounted for about 70% of sales, and the fertilizers and biostimulants segment accounted for about 30%. The sales ratio for the fiscal year ending December 31, 2020 is well-balanced, with approximately 50% in the agrochemical field and 50% in the fertilizer and biostimulant fields.

 

Could you tell us a little bit more, among the three product lines which one is your main focus? Where do you see the most future?

As for agricultural chemicals for overseas markets, we are focusing on the development of the miticide Danisaraba, the fungicide Gatten, and the fungicide Kaligreen. Danisaraba is already sold in 31 countries around the world. One of the features of this product is that it is effective only against specific mites and has no effect on beneficial insects that prey pests. Gatten is now sold in five countries around the world, and we plan to expand its sales to new markets such as Europe. Kaligreen is used in 12 countries around the world, and we plan to expand its sales by renewing the product. We are also focusing on expanding sales of "green pesticides," which are mainly made from natural and food additive-derived materials and are friendly to people and the environment.

As for biostimulants, we are focusing on the development of our mainstay product, ATONIK, as well as various products of our Spanish subsidiary LIDA Plant Research, S.L. From the perspective of environmental conservation on a global scale, there is a demand for safer and more environmentally friendly products in agricultural chemicals, and we believe that restrictions may be imposed on the use of conventional agricultural chemicals in the future. Therefore, we believe that the demand for "green pesticides" and biostimulants, which are mainly made from natural and food additive-derived raw materials that are friendly to people and the environment, will increase as products to respond to the said global movement.

 

If we look at biostimulants, which are a new kind of technology in agritech, we know that they are very different from traditional fertilizers which use chemicals such as nitrogen, potassium, etc. Could you tell us what are the advantages of your Atonik Biostimulant and do you see it as a solution between a pesticide and fertilizer?

Pesticides protect crops by killing weeds, insects and fungi with their own chemical mode of actions. Biostimulants, on the other hand, promote cold resistance, heat resistance, pest resistance, and growth by boosting the natural immunity of plants from the inside. Therefore, biostimulants can be used over a long period of time without causing weeds and insects to develop resistance to them as they do with agricultural chemicals. By combining pesticides, fertilizers, and biostimulants, we believe that we can reduce the amount of pesticides and fertilizers used and also reduce the burden on the environment. Especially in Europe, the use of synthetic pesticides is expected to be further restricted in the future, so the demand for biostimulants is expected to increase.

 

You said earlier there are only twenty companies in the world that use what you are doing and domestically we know that Mitsui Chemical and Sumitomo Chemical are the big players, internationally then you have Dupont, Bayer and Dow Chemical for example. Could you tell us in the case of your company, what is your competitive advantages? What makes you the go-to partner when it comes to agrichemicals?

The most important thing we focus on is cultivation technology. We believe that by combining our cultivation technology with the three agri-technologies, we can supply growers with advantages that are different from other agrochemical manufacturers. There are many manufacturers specializing in agrochemicals and fertilizers, but I believe that we are the only manufacturer in the world that can provide solutions by combining agrochemicals, fertilizers, biostimulants, and cultivation technologies.

 

Japan is famous internationally because it is estimated that 40% of all agrichemicals are developed here, especially during the latter stage of R&D. Could you tell us what kind of technologies you are working on presently with your R&D division and what is your overall strategy?

Currently, we are conducting research and development of new agricultural chemicals in India and Japan. We are developing new agrochemicals by exchanging information between our laboratories in Japan and India, always keeping in mind what the market is looking for. The development of new agricultural chemicals is becoming more and more difficult every year, and it is extremely important to be able to screen as many compounds as possible. By conducting development at two bases, in Japan and India, the Group has the advantage of being able to screen a larger number of compounds. We are also conducting R&D on biostimulants at two bases in Spain and Japan.

 

You told us that you have research facilities in India which is very interesting because we know that as Japanese companies expand abroad, they employ various strategies to take advantage of local knowledge. For example, M&As, joint ventures, opening overseas offices or looking for co-creation partners. In the case of your company, could you tell us what is your strategy as you look to expand abroad?

We are constantly looking at ways to optimize our operations in regions around the world in order to expand the Group's performance. Until now, our main focus has been on products in the pre-harvest sector, but with the addition of the Dutch company Crysal to the Group through M&A, we have added products in the post-harvest sector to our product portfolio. This has made it possible for us to sell our products in the floriculture field in an integrated manner, from sowing to harvesting and delivery of products to consumers. We will continue to promote product development and expand the area of integrated product sales for other crops as well. Another aim of the M&A is to achieve synergy effects through cooperation among group companies located around the world. We hope to create significant synergies by establishing a system to sell the products of each group company around the world as needed.

 

Imagine we come back, let’s say in three years to interview you all over again. What would you like to tell us? What are your dreams for the company and what would you like to have accomplished by then?

We just announced our mid-term management plan in February 2021, and this year is the first year of our three-year plan. Just at that time, due to the impact of Covid-19, many of our employees are working remotely for the first time and are feeling a great deal of stress and anxiety in an unfamiliar environment. Therefore, I began to think that it would be great if we could build a company culture where all employees could empathize and share the same values. For our company, the keyword for common values is "cultivation”. With the spread of Covid-19, the number of people who grow flowers and vegetables at home is on the rise, and as a professional grower, we would like to expand our new D2C business by continuing to provide them with information on "the joy of growing", "the joy of harvesting", "the joy of deliciousness", and "the joy of beauty".

In addition, the corporate activities of the Oat Agrio Group itself are an initiative for the Sustainable Development Goals (SDGs). By further promoting the use of agri-technology, we hope that in three years' time, we will be able to help solve the problems of environmental conservation, improvement of resource efficiency, and eradication of starvation from the world.

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