Photos: esther boston photography

For those of a “certain age” in the pest management industry, Dow Chemical Company was an iconic brand, one of a handful of global product suppliers that dominated the pest control marketplace. With an impressive national footprint fueled by the sale of Dursban insecticide, representatives of the Midland, Mich.-based firm descended on NPMA PestWorld annually in their signature blue blazers, walking the trade show floor with an air of confidence befitting a Fortune 500 company, and serving as a striking contrast to Velsicol Chemical Corporation’s “everyman” vibe, as the two companies competed for industry dominance.

A lot has changed since those halcyon days of the mid-1980s. Velsicol Chemical Corporation is a distant memory for most pest management professionals, yet Dow Chemical Company remains active in the marketplace through its legacy companies, the latest iteration of which is Corteva Agriscience.

Headquartered in Wilmington, Del., Corteva Agriscience was created from the $120 billion merger of Dow Chemical and DuPont in 2017, one of several high-profile “mash-ups” in the agrochemical space in recent years.

Described at the time as a “merger of equals,” the Dow/DuPont marriage incorporated three powerful businesses into a single entity — agricultural chemicals, material science and specialty products, with global business centers in Johnston, Iowa, and Indianapolis, Ind. For the past two years, the combined entity operated as a holding company for three independent business units — Corteva, the agriculture division; Dow, the material science division; and DuPont, the specialty products division.

That changed on June 1 as Corteva separated from DowDuPont. CEO Jim Collins rang the opening bell at the New York Stock Exchange as the company went public on Monday, June 3, ushering in a new era for the agrochemical giant. “As a global leader in the combined $100 billion seed and crop protection market, Corteva has the most robust pipeline in the industry, a world-class innovation engine, and advantaged routes to market that provide us with unparalleled customer relationships — all of which will fuel our growth as an independent company and drive value for stockholders,” Collins said.

Most stock analysts, despite recent headwinds in the farm economy resulting from springtime flooding, low farm commodity prices and the ongoing trade war with China, believe the company is well positioned moving forward, particularly given its strong position in both seeds and crop protection chemicals.

Why is that significant? Structural pest control represents only a small portion of the global pesticide market, so active ingredients are screened first for the much larger agricultural sector. In fact, the estimated cost of discovery, development and registration of a new active ingredient exceeds $180 million, not including the capital costs associated with building and operating highly specialized production facilities, according to Purdue University’s The Pesticide Marketplace.

“Global agricultural is the only market large enough to support this kind of investment, which is why major pesticide manufacturers focus primarily on the development of agricultural chemicals,” the publication states.

Once the most promising A.I.’s are identified for key agricultural crops, they are screened for activity against structural pests and reformulated for specialty markets like structural pest control, turf and ornamental, and pasture and land management. The cost of screening hundreds of thousands of compounds annually, not to mention launching a handful of products on a global scale every year, requires a certain mass, hence the robust M&A market for agricultural chemical companies.

There is also an economy of scale that results from these high-profile mergers, allowing companies to reduce costs and eliminate staff, making the businesses even more efficient — and profitable — moving forward. Corteva, for instance, was able to cut $1.2 billion in operating costs and reduce its workforce by 20 percent as a result of the Dow/DuPont spinoff, positioning it for continued growth moving forward.

Despite all these changes, however, one of the constants at Dow AgroSciences —and now Corteva — has been the 36-year career of Mark Neterer, who has held numerous positions at the company, including distributor account manager, product manager, national accounts manager, senior marketing manager for Sentricon and national sales manager. He currently serves as the Corteva business leader for the pest management and turf and ornamental segments.

PCT recently traveled to Indianapolis, Ind., to sit down with the longtime industry executive to get a better sense for the company’s plans for the future, particularly as it relates to the structural pest control industry and its Sentricon and ActiveSense product lines.

PCT: Tell our readers what it was like the day Corteva Agriscience went public.

Mark Neterer: It was pretty exciting. We had a group of about 100 folks from around the world in New York City for the bell ringing on Wall Street. And for those of us back in Indianapolis, we had a live feed of the event in our atrium where we had a big celebration following the ringing of the bell.

PCT: That must have been a unique experience.

Neterer: It’s something I will always remember because it’s not something that everybody gets a chance to be a part of in their career. It was a neat experience, but at some level it was hard to get your head around. Following the bell ringing, we realized this is real. We’re essentially a start-up company. I’m now retired from Dow AgroSciences and starting a new position at Corteva. That sounds strange, but it’s true.

PCT: Was it a complicated process for the company to get to that point?

Neterer: It took about three years. The first step was to get approval for DowDuPont to come together. We operate in 130 countries worldwide, so getting approval from various government entities and making sure there were no antitrust issues took about two years. Then it took another year to carve out the three companies and create our own company. I mean just think about the infrastructure issues alone. It was a monumental effort.

PCT: Having gone through mergers in the past, was this one more or less painful than you anticipated?

Neterer: I would say, overall, it was a lot smoother than I would have ever expected. We’re still going through the transition, but it’s been a generally positive experience.

PCT: How do you go about creating a new corporate culture when bringing three companies together?

Neterer: It can be sort of daunting because everybody has had their own way of doing things in each organization and they feel theirs’ is the right way. But the values that we’re all trying to embrace and live by — both internally and in the marketplace —are all related to enriching lives. And a good portion of that is focused on making sure the world has a stable food supply that is both safe and healthy, and that we’re providing products and services designed to protect the public’s health and property. We’ve really tried not to ask one another, ‘Are you heritage Dow? Are you heritage DuPont?’ What we’re really trying to do is to get to know people and understand what’s below the surface of the decisions they make.

PCT: That’s all well and good, but how do you get to the bottom of how people ultimately make decisions in any organization?

Neterer: You have to do the hard work of really getting to know them, and we use the “iceberg model” to achieve that goal. Let me explain. When observing an iceberg you only see the tip of it; 90 percent of an iceberg is below the surface. But my first impression of a person is what I see above the surface. How you act and why you act a certain way is all below the surface. We’re really trying to take the time to understand what’s below the surface with our co-workers.

PCT: So how would you sum up Corteva’s new corporate culture?

Neterer: It’s a work in progress. Our leadership team has chosen to go down a path where we really strive to be market shapers. In other words, we want to innovate; we want to be bold; we want to be leaders in the markets we serve, but we want to do it the right way by adhering to the highest business principles and a strict code of ethics.

PCT: An important part of being “market shapers” is introducing innovative technology. How important is the development of new active ingredients to Corteva’s future in the pest management industry?

Neterer: We’re committed to discovering and developing new technologies, but it’s not just about bringing new A.I.’s to market because there’s so many other things that our customers want and need. We can help our customers with all kinds of business resources, whether it’s marketing resources or training resources. We’re trying to look at the business holistically and ask ourselves, ‘What value can we bring to our customers they may not even know they want currently? Can we proactively address their unknown needs?’ That’s our mission.

 

 

PCT: Since the business you manage is a relatively small part of Corteva, how does management view the pest management and turf and ornamental business?

Neterer: They’ve been very supportive, even though we’re organized a little bit differently than the rest of the company. There’s a recognition that we serve a unique segment with a unique go-to-market strategy. Fortunately, we’re successful from a sales and market share standpoint, and they recognize that. As a result, we’ve been allowed to run the business the way we think it needs to be run. Nate Miller (commercial unit leader), who I report to, has been awesome. He’s put a lot of faith in our team and has allowed us to keep doing the things that have been successful in the past.

PCT: Obviously, our readers are interested in any new technology Corteva Agriscience plans to introduce in the years ahead. Can you share any insights about your plans in this area moving forward?

Neterer: We’ll be introducing 18 or 19 new technologies in the future based on what’s currently in our pipeline. As you know, Corteva is a $14 billion company and we’re investing a significant portion of our overall revenue in R&D. This year alone, we anticipate generating $645 million in revenue from new technology, primarily on the crop protection side, but what’s really exciting is we’re actually screening for urban pests in some of our early development efforts. We’re continually looking for new A.I.’s that have a fit in our structural pest control and turf businesses. We have some really neat chemistries that are currently in our pipeline, and on the turf side we’re launching five new products in the next few years, which will significantly expand our portfolio in that market. We’re also investing in our ActiveSense business, which is a technology-driven business rather than an A.I.-driven business.

 

PCT: Are you concerned about being too far ahead of the curve, so far on the “bleeding edge” of a new technology that your customers aren’t ready to follow your lead?

Neterer: When you think about it, when we launched Sentricon 25 years ago, our customers’ initial response was, “We don’t need that; what we have is working great.” And if we would have taken their feedback at face value and not pursued it any further, we would have missed a significant market opportunity. The point is that sometimes — oftentimes — new technology isn’t always instantly embraced. Customers may not even know they need it; you have to create that need for them and with them. I think that’s where we see the industry heading because it’s getting harder and harder to create new active ingredients that can get registered. And the ones that are being registered are much more limited in their spectrum of control. We’re in a tough spot because we can’t generate the return on investment required to develop new active ingredients specifically for the pest management industry. To be successful with any product or technology we introduce, we need to accomplish two things. It needs to be a technical success. It has to work and it has to do a great job protecting properties. It also has to be a business success. Over the years, we’ve spent a lot time with our team focusing on helping our customers achieve business success using the Sentricon system. We’re essentially business consultants for our customers. They’re investing in us, so we want to invest in them.

 

 

PCT: Why is there a growing emphasis in the digital arena at Corteva Agriscience?

Neterer: The reason for our digital emphasis is we invested in a company called Granular about two years ago. They’re basically a software and information technology company based in San Francisco. That’s a huge part of our strategy. Going forward, we’re investing in the whole IT and Internet of Things area, providing products and resources that benefit all types of businesses, from farming to pest control.

PCT: Could you update our readers on your ActiveSense and Sentricon brands?

Neterer: The first generation of ActiveSense has been in the market about a year now and it has a fairly limited scope in terms of applications. We’ll be launching our next generation of sensor at NPMA PestWorld. It’s a new sensor that can be used in a wider variety of traps, and it will help our customers monitor what’s going on in their accounts. In addition to the sensor, we have developed a new portal and communication vehicle for our customers so that at any given time they can be alerted there’s activity in a specific station around their house or commercial building. It’s live, real-time information that’s flowing back to our customers so they know what’s going on inside their business or residence.

PCT: Any updates on the Sentricon system?

Neterer: Believe it or not, it’s been 25 years since we launched Sentricon, so we’re planning on some big celebrations as we go through the year. The incredible thing is that we continue to invest in the product; every single component of the Sentricon system continues to evolve and innovate. There isn’t one component of the system that is the same as it was 25 years ago. As a matter of fact, we just launched new Recruit AG, which stands for ‘Above Ground.’ Basically, it’s a box with bait in it. If a PMP comes out to a customer’s home and finds a mud tube on the wall, Recruit AG enables him/her to install the unit on the spot. It’s a great closing tool because they can install it right away, providing direct access to a termite colony. By installing Recruit AG at the time of the sales call, they actually begin eliminating the colony that day. We’ve also launched FlexPack, which gives PMPs more flexibility to install the unit in corners or other hard-to-reach areas where they encounter termites. PMPs are finding it useful for treating trees that have been infested with Asian termites. They’re installing FlexPack right on the tree and it’s eliminating the colony. We’ll also be launching some new equipment next year that will help technicians find and service the stations more quickly, helping them to speed up the inspection process.


PCT: Is there anything on the horizon for Corteva over and above the ActiveSense and Sentricon product lines?

Neterer: We are and will continue to develop and enhance the performance and business value of the ActiveSense and Sentricon brands through innovative new technologies and resources. Additionally, we are continuing to seek new technologies that have a great technical and business fit in other segments of the pest management business, including the mosquito, bed bug and general pest control segments. Our pipeline of active ingredients show promise that will enable Corteva to expand our portfolio for PMPs to incorporate into their service and business models.

PCT: How do you view the relationship between Corteva and industry trade groups?

Neterer: I think we as a company, and me personally, are huge advocates for partnering with industry associations. We’ve been involved in both NPMA and PPMA for many years, as well as UPFDA and RISE. We are thrilled to be fully engaged as “Strategic Partners” with NPMA, and are intimately involved with the LDG (which is being rebranded as LINKS) and the state associations group.

PCT: You’ve seen a lot of changes in the industry in the past 36 years, haven’t you?

Neterer: For an old guy like me, it’s amazing how much the industry has changed. When we launched Sentricon, we literally had to buy computers for many of our customers because they didn’t have computers. Now, we’re working on mobile apps and monitoring systems to make life easier for the technician. It’s fascinating because it’s no longer just about the chemical; it’s about the whole package of products and services offered by industry suppliers. The one thing that hasn’t changed, however, is the quality of the people I’ve met in the pest control and turf and ornamental businesses. These industries are filled with great people.