How the seed of an idea grew into reality for one Australian company in Pakistan
Australian export case study
Pakistan is a country of many business challenges. However, its burgeoning population – expected to grow to 250 million by 2050 – rich natural resources, and strategic geographical location between India and China present an opportunity too big to ignore.
Agriculture is a major economic driver in Pakistan. A growing demand for quality agricultural products and services to increase farm yields is creating opportunities for Australian companies.
Today, Pakistan is searching for the technology and the techniques that will enable the country to become one of the leading agricultural economies of South Asia. This ambition is proving to be fertile ground for Australian agribusiness, Selected Seeds.
Founded in 1970 and based in Toowoomba, Australia, Selected Seeds has over 40 years’ experience providing pasture seeds for domestic and international customers. Exports account for about half of the company’s revenue.
Selected Seeds’ reputation for quality has seen the company grow to become a major provider in the global pasture seed market. Managing Director, Phil Smith, says strong demand for Rhodes grass hay from the United Arab Emirates gave Selected Seeds the idea to investigate the market in Pakistan.
"We looked more closely at Pakistan when we realised the growing demand for milk products and the strong demand for high quality forage hay to feed the local dairy industry," Smith says.
"Continued growth in the dairy sector in South Asia means that the demand for fodder will also continue to grow. Quality seeds help farmers to increase production and make better returns."
Pakistani farmers need more efficient ways to use their land and resources. This means opportunities for Australian companies to work through local distributors to supply farmers with products and services that will help increase per acre yields.
Choosing the right agent is important to achieving strong sales. Selected Seeds markets its forage seeds through Al Dahra Pakistan.
"We appointed Al Dahra because we had a long-term relationship with them from the UAE. They are large buyers of Finecut Rhodes grass seed, and they have many farmers that supply Rhodes grass hay to them for shipment back to the UAE."
The ideal product
Rhodes Grass – the main product marketed by Selected Seeds – is salt and drought tolerant and can survive in harsh conditions. This makes it ideal for the Pakistani environment.
Selected Seeds’ agent in Pakistan works with farmers and advises them about the best ways to cultivate Rhodes Grass. Selected Seeds wants to expand this work so other farmers can also benefit from using Rhodes Grass.
When Selected Seeds’ Senior Agronomist, Stan Paynter, visited Pakistan recently, he realised that farmer training was an area that could help Selected Seeds to expand its business. Selected Seeds plans to develop a training program so farmers can become familiar with its product and get maximum output from their land.
"We believe it is important to service the market on a regular basis to keep in contact with our customers," says Smith.
"The right agent is very important, especially one who is able to adapt to the changing business environment."
More and more farmers know about Selected Seeds’ products, and sales in Pakistan continue to grow.
"Pakistan has been a good market to enter South Asia and to learn about trade in this region," Smith says. "We can draw on these export skills and knowledge to consider larger, more complex markets."
"Initially, we were concerned about servicing this market and the amount of red tape that may be involved in importing and distributing the seed in a timely manner. Some of these problems we have overcome and others we need to address."
How Austrade worked with Selected Seeds
Austrade’s relationship with Selected Seeds began when Austrade’s Karachi-based business development manager met with Smith in Toowoomba in 2011.
Selected Seeds was briefed by Austrade on the opportunities created by the growing demand for fodder to supply the dairy industry in Pakistan.
Austrade assisted Selected Seeds to promote their product at agribusiness events in Karachi, Lahore and Islamabad.
At Austrade’s urging, Selected Seeds also took part in the Pakistan Agri Expo in Lahore in April 2013, Pakistan’s largest agricultural trade show.
Austrade arranged for translation services and assistance, and organised meetings with Pakistani companies.
"We were pleased with the results," says Smith. "We met many farmers and agents at the expo and gained some great leads and more knowledge about the potential demand for fodder seeds in Pakistan."
"Austrade also provided us with information about a possible distribution network in Pakistan to extend sales to a wider geographic area."
"We need to continue to visit Pakistan regularly to keep up to date on the changing environment, and to remain close to our major customers."
Selected Seeds is now working with Austrade to find a way to export its products into the north of Pakistan. Based on its success and experience in Pakistan, Austrade is also advising Selected Seeds to consider other South Asian markets, such as Sri Lanka, where the government is trying to expand the dairy industry.
Separate myth from reality
Smith does not shy away from some of the challenges of doing business in Pakistan, but believes the potential for success outweighs the frustration. His advice about law and order, security, corruption, and political and religious unrest in Pakistan is to separate the myth from reality.
"As we have only been active in Pakistan for a relatively short period, we have had to work hard to overcome the red tape that is associated with doing business in a developing country," Smith says.
"We still have hurdles to overcome, but we don’t expect they will prevent us from doing more business in Pakistan."
"Being patient, adaptable, and having the right agent who has the same flexible attitude to business is most important."
"I would also tell Australian companies to work closely with Austrade, as they have a good idea what will work and what will not. They are the people on the ground."
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