A rising star raking up a centuries old industry
For Sri Lanka’s lofty vision of self-sufficiency in food to come to fruition, its subsistence farming must transform into a sustainable and high-yielding regime, heralding a new era of prosperity for poverty-stricken farmers.
In an arena entrenched with some of the country’s oldest enterprises, a new age protagonist is positioned as a pathfinder for farmers. AgStar – a public company nearing two decades of operations – is bracing itself to become farmers’ ‘one stop agent of prosperity.’
Marking a watershed event in Sri Lanka’s agricultural sphere, AgStar recalibrated its business platform to build its future on the revolutionary concept of creating shared values, launching a year of sector defining interventions that are expected to exponentially enhance brand equity.
From seeds and fertiliser that promise to double farmer yields to agri-technology that is expected to propel agriculture to the cutting edge, the company looks to come to the aid of farmers with export channels for tea, fruits and vegetables, as well as a state-of-the-art storage facility that will provide a 360° supply chain solution for the sector.
AgStar aims to create value further afield with the production of renewable energy where it supplies 1.3 MW to the national grid already. Meanwhile, in its most ambitious phase of growth, the organisation’s fertiliser and crop care divisions are slated to increase sales by 75 percent.
As AgStar blazes a trail in Sri Lanka’s agricultural sphere, LMD spoke to its visionary-in-chief Pasad Weerasekera.
Q: Nearly two decades of operations position AgStar as a seasoned business but the agriculture sector features century old establishments. As a listed enterprise in a pivotal segment, what is the company’s defining factor?
A: Agriculture is somewhat trapped in a bygone era and cutting-edge transformation has been recognised as a national imperative.
AgStar identified space for transformation and embarked on a focussed strategy as a catalyst of change. Today, the company defines itself as farmers’ one stop agent of prosperity with the tools of the trade to deliver this.
The company is responding to the government’s call to overhaul agriculture in a bid to ensure that Sri Lanka is self-sufficient. We are poised for a transformational growth spurt in 2021, which will not only raise the profile of AgStar as a robust corporate citizen but also a game changer in the sector.
Q: Changing the game calls for solutions across the field. What do the company’s interventions encompass?
A: Presently, AgStar’s operations revolve around five dynamic solutions for a 360° offering catering to farmers – viz. seeds, fertiliser, crop care, agri-technology and global markets. By combining them, we aim to provide an all in one portfolio of expertise and products designed to facilitate a substantial increase in yield, and capture the best markets while guiding farmers towards sustainable practices.
Our farmers are in desperate need of not only ad hoc products but a push to be at the cutting edge of agriculture. This requires know-how, better products and direction on the field to multiply yields while safeguarding the soil – their richest asset.
So we do not merely operate as a trading organisation but are building on concerns and values that are shared.
Q: What is AgStar’s proposition with respect to its seed portfolio?
A: We have invested in R&D and identifying the best seeds the world has to offer. The seed portfolio is built around our commitment to securing crops that are ecologically appropriate for the country while creating optimal value for farmers through unprecedented yields.
We anticipate that the new year will see our vegetable seed business turnover increase by 60 percent as farmers respond to our portfolio. Furthermore, several new products are in the pipeline while our partnership with Tohoku Seed – a leading seed brand – will galvanise the market further.
An example of the portfolio’s performance is the demand for our maize seed. We aim to help farmers perform these operations well so they can enjoy yields of 4,000 and 2,000 kilogrammes an acre for irrigated and non-irrigated farming respectively – that’s more than double the national average.
We’re also planning to expand seed paddy production and streamline operations to improve the quality of our products for paddy farmers islandwide.
Q: Fertiliser has been a thorny issue for Sri Lanka for many years. How is AgStar faring in this segment?
A: The growth in fertiliser sales is a suitable answer to this question. Based on current demand, our output is slated to increase by a staggering 75 percent in 2020/21 with total sales nearing the milestone of 100,000 MT.
In response, an 83,000 sq ft state-of-the-art storage facility is scheduled to be opened in early 2021 in Ekala, upgrading product quality while arresting waste and passing benefits to farmers.
The fertiliser front will be a hive of activity as AgStar is also a distributor for Agripower (Australia).
While fertiliser may continue to be a contested subject, we have learnt that farmers are willing to invest in quality that is provided with assurances and at reasonable prices.
Q: You have stated that agriculture cannot be developed by stand-alone products. Do you view the sector’s generations old shortcomings as your own concerns in the scope of creating shared value?
A: There are debilitating concerns on either side of the equation. On one hand, the sector must urgently respond to catalysts of transformation while on the other, farmers need to enhance their knowledge and embrace sustainable methods.
We’re looking to introduce the latest crop care solutions and agri-technology, through advanced ecological and farming solutions and technology that are tailor-made for our country. Technological development is a prerequisite to driving cutting-edge agriculture.
This year, we will introduce maize and paddy planters, and maize and sugarcane harvesters to complement the new age tractor and paddy harvester that were brought to the market. A 10 litre drone sprayer and weeder are also expected to be launched soon, marking a new chapter in Sri Lankan agriculture. As a result, our crop care division is expected to grow by 50 percent this year.
We also use technology to streamline and improve efficiency in the AgStar group. One such initiative is an app-based customer ordering system for fertiliser and crop care, which has been active for the last year. This is expected to be implemented for seeds and Mahaweli Agro in February.
Q: Sustainable long-term solutions cannot be achieved without connecting farmers to modern markets and new opportunities to help them escape the poverty trap. How is this addressed by AgStar’s 360° approach?
A: We forge long-term relationships with our farmers as their agent of prosperity. This journey does not end with harvests as our export sector is tasked with identifying global markets for these farmers’ produce.
Plans are afoot to launch fresh fruit and vegetable exports this year, beginning with the UAE and other Middle Eastern nations. AgStar’s new tea export business is poised for an exciting launch as staff with know-how and infrastructure have already been enlisted.
Q: The company’s business plan centres on a culture of value creation amplified by the creation of shared value. What is your view on this as an agricultural company operating among giants?
A: Among the long list of businesses in the sector, AgStar is positioned as third in terms of size but we believe our model of transformation makes us the name to watch. We are not afraid to challenge the status quo and transcend traditional boundaries.
To this end, we’re even engaged in power generation – renewable energy, of course! Our factories and outposts generate solar power as a value addition and we’re already generating 1.3 MW on our path to 3.3 MW.
Q: Could you outline AgStar’s shared value strategy and how it positions the company as a trailblazer in agriculture?
A: Creating businesses with shared values is a global ideology that calls on enterprises to seek emphatic solutions to compelling issues faced by markets in building win-win situations for all – in our case, farmers, communities, nature and the organisation.
This calls for us to go beyond conventional marketing objectives and channel all resources to deliver a more holistic offering.
In our view, creating shared value elevates us to a higher realm and we are responding to this call across the organisation. Our vision is to be a catalyst in moving Sri Lankan agriculture from subsistence farming to a sustainable, modern and exceedingly rewarding sector.
Q: How would you define AgStar’s role in the country’s quest for agricultural excellence?
A: The delivery of holistic and all-encompassing solutions that are designed to guide our farmers to a new era of wealth while attracting future farmer generations to cutting-edge agriculture will define AgStar’s journey of excellence.