F&A
Beefing up
Synergizing expertise
Key advantages
8 What'sNewS
Issue 3' March 1999
(Continued from previous page)
product into the United States, and using
their marketing power to place it on US
supermarket shelves. Another is a
tendency towards further concentration,
both in the US and internationally; these
and other developments have opened up
important
opportunities for
Rabobank
International (RI). 'No
competitor offers the
same kind of focus and
global expertise in the
wine sector as we can.
Even if we don't try to
offer local financing
and depository
arrangements, for
instance, we're still
appreciated as a
boutique that can offer
not just traditional
forms of credit but also
creatively structured
off-balance sheet deals,
leasing and other
corporate finance
products, and also risk
and opportunity
assessments that
directly meet our
client's needs. Since
we're also perceived to
have the intellectual
overview, we've been able to develop
close relationships with at least half of
the 25 big wineries that control 90
percent of the market in the US.'
Beef, while a highly fragmented industry
traditionally geared to high volume
production, is also changing and offering
opportunities as well. 'American
producers, just like those around the
world, face stagnant consumer demand,'
says Bruce Baccus of our Dallas office.
'This is partly due to the fact that
consumers have less time to prepare
meat in the time-consuming ways that
best bring out its flavour. And because of
the structure of the industry, market
signals have been slow to find their way
back to producers. This is gradually
changing. There is a trend towards more
integration, in terms of alliances, and
also a tendency among some players to
push into specialized products that
involve more processing and are more
consumer-friendly in terms of
preparation. The industry is also further
intensifying its efforts to market product
abroad. What all of this means for us is
that we can follow the industry up the
value chain and upgrade the value-added
component in the range of products and
advisory services we offer. These
increasingly include trade finance,
structured finance, foreign exchange, and
derivatives - above and beyond the
traditional bread-and-butter credits.
Another important competitive tooi has
been the quality of our research. The
latest food and agribusiness research
report on the beef industry really
underscored our insight into the sector
on a global scale, which in turn helps
when our customers start to think ahead
in strategie terms for more on this
report see end of this articleThey conté
to us because they know none of our
competitors can offer this kind of
expertise. This is probably one reason
why we're leading this market in US.'
The advantage of a sectoral focus, with
specialists located physically close to large
clusters of clients, is thrust into the
foreground at times when it comes to
managing particularly complex deals. For
example, we were recently able to rapidly
structure a transaction for a leading US
poultry producer called GoldKist that
effectively gave our cliënt advance access
to the proceeds of a pending deal. This
cante at a point in the business cycle when
the poultry sector was caught in the
doldrums and other banks were loathe to
take the plunge. Says Bucklin: 'This was a
good example of sector knowledge at
work: the fact that we intimately knew
the company and understood its
requirements at a detailed local level, that
we could also relate these
details to the cyclical
position of the industry
as a whole, and that we
were then able to design
and execute an
appropriate transaction
rapidly by synergizing
expertise from all around
our world network. We
could move where others
couldn't because we had
the capacity and we
understood the big
picture.'
'Being consistent and
quick to get to our
clients with solutions is
the name of the
competitive game,'
Bucklin continues. 'We're
increasingly seeing more
cases where we're getting
into deals as a direct
result of our industry
knowledge, our
understanding of the risks and oppor
tunities within the given sectors, and our
ability to plug local developments into a
global context. Having directed the talent
of some two dozen relationship managers
towards the eight individual sectors
within F&A, we find there's an emerging
perception on the US market that if
Rabobank is involved in an F&A deal,
then it must pass muster. That's a direct
result of knowledge, focus, and expertise.
So, when people say knowledge is our key
competitive advantage, this is a good
example of that concept in practice. It
shows how, if you organize your
knowledge efficiently, you can really turn
the heat up on your competitors. If we do
our jobs right, it will be very hard for the
others to catch up.' lnternal reports
'Positioning Paper on Beef' and 'Factor
Analysis' are availahle free of charge from
Martha van den Burg of FAR (tel. +31 30
216 1178. fax+31 30 216 1920). Market
study 'The World Beef Industry' is
availahle from marketing Rl at an internal
cost of NLG 75 (tel. +31 30 216 2804,
fax +31 30 1976).
Bob Bucklin, head ofUS corporate banking
