March 27, 2015

Passionate about coffee, knowledge and margins

Enjoying an Americano at the Yara House coffee bar in Oslo, Yara’s President and CEO Torgeir Kvidal engages passionately on how knowledge is key for developing tomorrow’s solutions – and our business.
Coffee being poured into a cup
Coffee being poured into a cup

Q: Yara has a specific innovation platform for coffee – why?

A: We saw positive results from trials in Vietnam, partnering, amongst others, with the coffee industry. Even in intensive farming systems, our products and knowledge improved yields and profits, with a lower environmental footprint.

Q: Does it make sense for Yara to invest in farmer-focused activities?

A: In a highly competitive market, part of our value proposition to the farmers is to maximize their income. Providing the best advice on crop nutrition application strengthens our brand value and supports our portfolio of value-adding products and solutions, which have overtaken commodity fertilizers.

Q: The coffee growers are mainly smallholders – will you be able to reach them all?

A: Coffee is one example on how we can have a wider impact when working in partnerships. Together with Vietnamese authorities, NGOs and other companies, we have been part of a coffee task force.

Q: How important is coffee for Yara’s bottom line?Torgeir Kvidal

A: Today the financial contribution is limited, as is natural in an early phase. But coffee demand is growing substantially, also for the specialty coffees with sustainability certification. The global coffee trade is already estimated to be worth USD 100 billion.

Q: Will Yara fertilizers gain sustainability certification?

A: Today certification is more about the overall footprint of the farming practice. Using our knowledge and products has reduced the emissions from coffee growing in Vietnam. In the long run, doing business in a responsible way will grow profits sustainably. That goes for us, the coffee growers, and the companies sourcing, processing, and selling the coffee. We can provide knowledge for important parts of the certification processes.

Q: Is this business, or is it a CSR exercise?

A: It’s business, without a doubt. To Yara, leveraging our knowledge to grow the business sustainably is a strategic priority. Taking positions in cash crops niche markets has already contributed to our margins, with our growing NPK markets overseas as an example.

Q: Big companies engaging in developing markets are often accused of taking advantage of the smallholder farmers. What is Yara’s position on this?

A: Our business success depends fully on the farmers’ continued profit. If we can’t help the farmers become more productive and increase their incomes, we can’t grow our business in a sustainable way. Yara will always sell its products at market value, and delivering smaller volumes to developing markets comes at a cost. For this reason we have an interest in seeing the markets grow and become more productive. In 2014, we were, for example, an active partner in both FAO and UN Global Compact processes on responsible business conduct in the agricultural sector, supporting such a development.