A local player in the globalised market
“The fertiliser market operates on an increasingly worldwide basis,” said Richard Sunderland, the new managing director of J&H Bunn Ltd., now an indirect subsidiary Koch Industries, Inc., a privately-held company whose diversified businesses which have a presence in nearly 60 countries. The industry’s push for efficiency and innovation is great news for growers he told Chris Lyddon.
He stressed the importance of the globalisation of the fertiliser business. “The fertiliser industry has become more globalised since I last worked in the UK,” he said. “There are far fewer players. There are larger players.”
“Growers should understand the nature of the fertiliser market. Fertiliser is a globally traded commodity subject to supply and demand in not only the UK market but also the entire world. The prices growers pay for nitrogen in the UK is set because of the worldwide demand for the product, not just demand here,” he said.
“Cropping patterns in North America affect what happens in the UK,” he said. “15 or 16 years ago a grower could afford to be a little bit more parochial in his view of the UK or potentially Europe. Now growers need to understand the larger market.”
“On the same note, what happens in developing countries, like China or India, effects what happens in the UK,” he said. “
“Bunn has built its reputation on being a source of expertise on regional markets within the UK. We are now combining our expertise with the knowledge and reach within the global market that Koch Fertilizer has brought to Bunn.”
“Although the industry is global, Bunn is focusing on creating long-term, sustainable value for our customers in the UK. We’re doing this by offering a broad portfolio of fertiliser products, including customised blends, straights and micronutrients; value-added services, like technical crop advice, haulage and spreading services; and bringing innovation to the market,” he said.
“The first innovation we’ve brought to the UK is Koch Advanced Nitrogen® fertiliser. This is a nitrogen fertiliser with the performance of ammonium nitrate but with the benefits of 33% higher nitrogen and without the regulatory burdens that apply to storage or handling of AN,” he said.
“Since its launch last year, we’ve seen tremendous success and acceptance from growers for Koch Advanced Nitrogen® fertiliser. Fertiliser, especially nitrogen fertiliser, is one of the most important crop inputs; however, it’s seen the least amount of innovation compared to other crop inputs. Bringing innovations to the market that will create additional value for our customers is a growth platform for Bunn,” he said.
“The good news for growers is that companies like Bunn are actively working to provide value and increase efficiencies of crop inputs. In the past four or five years, an innovation streak has hit the fertiliser world and that’s going to be a benefit for growers,” he said.
“With the price of grain, growers in general are paying more attention to increasing their yields,” he said. “Fertiliser is more expensive than it was five or six years ago. Growers are thinking much more about how they get every pound of value out of that fertiliser.”
“Growers are more cognisant of how effective their fertiliser programme is,” he said. “Demand for fertiliser is growing because the demand for food in the world is growing. Diets are changing, particularly in Asia. To meet this demand, production is increasing in all markets for crops and thus for fertiliser.”
“As well as paying close attention to grain markets and what’s happening with those prices, it is worthwhile keeping a close track of fertiliser prices,” he said. “Prices are volatile. Fertiliser prices can make dramatic shifts in a short period of time. For growers looking at risk management, understanding fertiliser prices is going to be important.”
Managing this risk can mean looking at how companies like Koch, with an international reach, might be able to come up with service-based solutions to risk management. “We don’t have any services on the shelf at the moment but it’s a topic that more of our customers are interested in,” he said. “We do work with our customers when they are planning their fertiliser needs to share our knowledge and point-of-view on the market.”
“Bunn is 196 years old,” he said. “The acquisition of Bunn by Koch has created value for our customers by marrying together the resources and capabilities of Koch with the local knowledge and experience of Bunn. That ties in well with what the market is demanding: local knowledge with global access and innovative ideas.”