COUNTRY BANKING Highlyfragmented Country franchise Strong platform huge in rhis region? 'One of the answers,' Hund explains, 'is the way RI has always been structured. Out sector was defined as: from the farm gate onwards up the chain. In servic- ing that market, we have been able to build relationships with the majority of clients we want. But we weren't as huge as the market because we were not touching the producers. When I say producers, I don't mean small farmers. "Farms" here are massive. Basically, we got tired of just talking about the potential for Rabobank. And we had a model - IM HA in Australia. PI BA effectively broke with the Rabobank tradition of not servicing agri-producers. Cor Broekhuijse was instrumental in that development. Through PIBA, RI bought local expertise and grew it. The answer to our question was: why can't we do something similar here in California?' The San Francisco team subsequently came up with a business plan that, they hoped, would form the start of 'doing something similar'. 'One of our problems,' I lund says frankly, 'is that we're a bunch of corporate bankers. Although I started in pro duction agri-banking, that was a long time ago. It's a different business. So we proposed setting up a separate corporate farming division, with specialized people. This initiative was welcomed and approved by Cor Broekhuijse in New York and we started hiring local people for the corporate farming division at the start of 2002.' At the same time, the hunt for a suit- able acquisition was on. Broekhuijse explains, 'The problem with the US banking industry is that it is highly fragmented. There are more than 8,000 banks in this country. The same fragmentation applies to agri- finance. There is no single financial institution which is recognized as the number one in production agriculture in the same way RI is recognized by the industry for corporate. That is an opportunity. However, given the fragmentation, suitable acquisitions are very difficult to find.' Identifying where and how to start and finding potential acquisitions is a full-time job. Which is why Adams was brought in. Adams started his career with Rabobank in the Netherlands, where he was a local bank General Manager before he joined RI in 1983. He has opened up markets and managed offices for RI in regions as diverse as the Far East, Central Europe and Turkey. North America was a new challenge. 'Fortunately,' he says, 'Eood Agribusiness Re- search's (EAR's) Joyce Cacho and Business Manager Kanta Rajkumar, both out of New York, provided a great deal of support. And Hund and her team had done a lot of homework on large farm lending in California. Taken together, all this input helped focus our choice on the western region. But I still spent months getting to know the area and its market. What we were looking for was an existing community bank with an adequate network of branches in rural areas and total as- sets of between USD 1 and 2 billion. That would give us the platform we need to build the Rabobank "country banking" franchise.' Adams set out on a number of scout ing trips in the region. 'We identified five "community banks" that fit the profile. I think we all saw the poten tial offered by VIB, and it came up for sale. This is a "community Bruce Baccus - heading up a strong agricultural lending division Lizz Hund:'We tend to be the innovators. The Word I '5

Rabobank Bronnenarchief

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