HORSCH worldwide – strategy for market penetration

terraHORSCH: How does HORSCH experience this pandemic?
Philipp Horsch: When the pandemic started last year in March, there was a lot of uncertainty. We of course wondered what consequences it might have on our sites and the company in total. At that time, we were right in the middle of the spring season which was very difficult as we had a lot of orders and it was not foreseeable if there would be cancellations. We did not know if we could manage to support our service colleagues in the different foreign markets from our headquarters in Schwandorf appropriately. But it soon became clear that our subsidiaries on site were well prepared and managed everything more or less independently. In the course of the past year, the concerns at the beginning of the Covid-19 pandemic gave way to a continuously increasing growth trend.

terraHORSCH: What do you think led to the stable and strong development of the company in the past years?
Philipp Horsch: That’s hard to say, but I believe that for example the stable cereal prices as well as a certain pent-up investment which was obvious in some markets contributed considerably. I think that the uncertainty of the pandemic also played a major role. It probably was for this very reason that farmers invested to an increasing degree to safeguard assets. And this additionally pushed our growth. The growth dynamics even increased this year compared to the year before. We noticed that with regard to production capacities we reached our limits faster than we expected, especially in the sectors purchasing and production we are currently facing a bottleneck. This is why it is important to set the right course for the different regions based on these dynamics.

terraHORSCH: Are there individual regions that stand out from this growth dynamics?
Philipp Horsch: The current growth dynamics concerns all our markets, however some definitely stand out. Russia for example is growing strongly, Australia develops positively and in Brazil and the US, too, the markets are stable and develop very positively. There is no region that stagnates. This is almost a unique situation.

terraHORSCH: What do mean by driving by sight?
Philipp Horsch: We do not work according to a traditional five-year plan but look ahead to the different questions always focusing on what makes sense. This is what we mean by driving by sight. For example, we do not build a new production site because it is scheduled in some long-term plan, but because we notice that we will need this site for capacity reasons within the next few years. We only look ahead as long as the construction time for the site. In this case, we surely proceed differently from other companies. But we have never acted according to plans. It is by sight that we fix objectives and take decisions for different time horizons. Thus, we can always adapt very flexibly to changing conditions. For traditional product and marketing topics, too, we work on a short-term and agile basis. However, there are individual elements where you have to look further ahead. Some product topics take a lead time of several years with regard to the basic development. Others can be pushed and completed for serial production in a very short time. In autumn 2020 for example we virtually within a few minutes took the decision to expand the site in Ronneburg/Thuringia as during the weeks before it had become apparent that the capacity limits in our German sites would be reached faster than we originally thought. I observe that organisations that work with long-term plans to a disproportionate extent are busy revising these plans constantly and this is why we advocate as few long-term planning routines as possible. It would simply take up too much time which we want to use better. At the same time, for decades we have always been pushing the skill to take decisions fast. The journey is the reward, not the plan or the reward itself. It often is better if you don‘t think things through until the end, but simply get started. This is where our family culture takes over and what makes us tick.

terraHORSCH: So what is your “sight” worldwide with regard to the development of the sites and investments?
Philipp Horsch: We have been working in a decentralised way for years, i.e. we do not only rely on one site. We produce at six sites all over the world that are distributed over the important continents. We want to continue to produce on these continents – as close to the market and as flexibly as possible. In practice, we are going to expand the site in Ronneburg until the middle of 2022 as I have already mentioned. With this step we achieve a doubling of the capacity. At the same time, also until the end of 2022, we want to build a new paint site in Schwandorf. You have to interlink the assembly capacities with the paint capacities. In Landau we want to take the next steps in the crop care sector: We will expand the assembly capacities at short notice and the production capacities and the paint site, too, in the long run. Thus, all three sites in Germany are going to grow. In Brazil, there is a greenfield project: we are planning a new site at a new location in Curitiba. Brazil is a growing market for us. Our good market position is also due to the committed young team on site that perfectly puts our company DNA into practice. In Russia, too, we are going to expand our production capacities. The measures are already in full swing. In total, we are going to almost double our production capacities with these worldwide investment projects within the next two to three years.