October 20, 2020
Bayer-owned Orbia is set to expand to Latam after deal with US-based Bunge
Ivan Moreno, chief executive of Orbia, an online farm products trade platform majority owned by Germany's Bayer, is hoping that an agreement with United States grain merchant Bunge will allow them to expand to the Latam region, Reuters reported.
The Bunge partnership, announced in September, will allow Orbia's 170,000 registered farm users in Brazil to sell their produce to Bunge online.
Moreno said the deal gives farmers the opportunity to sell corn and soy on the futures or spot market. In a "barter" transaction, the farmers receive cash or credit to buy inputs on Orbia for use in future seasons.
Using Orbia, farmers can also purchase seeds, pesticides and fertilisers from 120 accredited distributors. Purchases through Orbia earns loyalty points, which the farmers can use to exchange for products or support services.
Moreno, a former executive from Bayer, said Bunge adds plenty of liquidity to the business model, adding that Orbia plans to expand to Argentina, Columbia and Mexico next year.
The launch of Orbia comes as younger Brazilian farmers seek to go digital. 35% of farm leadership comes from farm managers aged 25 to 35, which was only 20% in 2013 according to Moreno.
In three years, Orbia aims to capture up to 20% of Brazil's BRL 110 billion (~US$19.6 billion; BRL 1 = US$0.18) farm inputs market. Orbia reached BRL 140 million (~US$24.9 million) in farm input sales in one week in August.
Moreno said other traders could join as buyers but did not provide a time frame because Bunge's exclusive origination rights is confidential.