Everard Van Zoelen: HHM Entrepreneur of the Year 2020

For the Entrepreneur Day 2020, Holland House Mexico once again organized the election for “Entrepreneur of the Year 2020”. Everyone was allowed to vote for their favorite entrepreneur. This year it was the second time that the elections were held and many people voted. More than 5000 votes were received and Everard Van Zoelen has won big time with over 400 votes ahead of second place. Last week Dan Reitsma from Holland House Mexico and Nicky Brouwers de Smits of the Netherlands Consulate in Guadalajara handed over the trophy of the "HHM Entrepreneur of the Year 2020" award to Everard Van Zoelen. In advance we talked to Everard about what it means to be a Dutch entrepreneur in Mexico.

Once again congratulations Everard!

How does it feel to be Entrepreneur of the Year 2020?

Well, as I said at the Round Table on Entrepreneur's Day I didn't pay much attention to the topic at first,  I just informed my friends, my children and my family in the Netherlands to vote for me. But then I saw that my team was informing all their contacts, be it their WhatsApp groups within the company, all the employees, customers, suppliers, etc. to take part in the vote. On Wednesday morning I saw that we were 400 votes behind, whereupon the marketing manager asked me, do we publish the vote on our social networks or not?

So we uploaded it to our social networks on Wednesday morning, where we have over 17,000 followers. After that the vote spun very quickly. I followed the vote and the comments on it and saw, for example, a man who owns a competing company has publicly praised my work, which was unexpected and gave me great pleasure. Ultimately, I think I'm very happy and proud of my work, but especially of my team.

Can you tell us something about yourself? As a Dutch citizen, why did you start a company like ISAOSA in Mexico?

Yes,  truth is that I never thought  I was going to start a company in Mexico. I studied agricultural economics for developing countries in the Netherlands in Wageningen at the Agricultural University and did my bachelor's thesis in Peru and my master's thesis here in Mexico where I stayed after finishing my master's degree and began to work as the Secretary of Collaborative Development, within the institution Service across Borders. While I worked in the organization I worked together with farmer organizations with the aim of drilling wells, for irrigation. Later I came in contact with larger farmer organizations that were distributors of FERTIMEX which was a government fertilizer producing company, privatized in 1992/3. Many of the farmers' organizations obtained concessions for the products of FERTIMEX at this time and I participated actively in this as I did in the formation of a corporative in Guadalajara at the regional level. The main activity of that corporation  was the purchase of fertilizers (complete shiploads) and distribute them to the partners. That was where  I learned about business in general but especially about how the fertilizer distribution business worked.

After I had worked there for about 5 years, the cooperation began to focus more and more on political and personal economic interests. When a new financing program for farmers was added, which in my opinion was not well thought out, I decided to leave the cooperation with 3 other colleagues. We were right, because the cooperation went out of business shortly afterwards. That was when the 4 of us founded ISAOSA.

Firstly, we had a good idea of how the company might develop, and secondly, it was very much in our favor that, both production and distribution of the FERTIMEX program were privatized. We were entering a new market and the existing distributors were used to working with the government that is, they were not used to working in an open market.

A Market where you have to be competitive, where you have to provide service, a Market where the bags have to be 50 kilos no more and no less, where you have to have quality. And well, they weren't used to that, and many of the companies that were in office at the time of government disappeared. And since we bought in bulk and sold to distribution networks, it was very difficult for others to compete against us because we could lower the cost a lot.

 

So you always thought one step ahead of your competitors right? Do you think this is one of the secrets of being a successful entrepreneur or are there other factors to be reckoned with?

I believe that the success of an entrepreneur is a combination of choosing the right partners and affiliates that you can really trust and to put together the right team that is committed to the project, in other words, it is a combination of effort, vision and being able to put together  the right people carefully. The financial part comes later, the key is in human resources.

What obstacles did you face and how did you overcome them?

We had a very bad crisis in 2008-2009, in the financial crisis when fertilizer prices went up sharply and then fell tremendously overnight so that our entire inventory was basically worthless. In general, we lost about $ 35 million of our inventory between September and December 2008, practically all of the company's share capital. I think one of the keys to the success of the company is that from the beginning every partner has had a fixed role within the company and that we have set up a system where 90% of the profits are reinvested and 10% are paid out. In the meantime we have changed this to 80% -20%. This helped us survive the crisis. Even if there came a time when we really didn't know if we would get out of here.

But what did we do? We said the only way to survive this crisis is to create liquidity. We said we have to sell the inventory at any price and buy the inventory again and turn around and start earning again. That saved us as a company. because many companies had old stocks, for example because they did not want to sell their stocks at the low market price. And the other key to circumventing the obstacle was that we had come up with a financing plan by entering into payment plans with our suppliers and thus being able to continue servicing the bank loans.So now we are taken for  a "triple A" company that has good economic solvency but still more moral solvency.

Is there a difference between doing business today and 30 years ago?

I think there have been many changes. For once, agriculture has changed a lot in 30 years, take the commercialization of corn, the commercialization of beans, the commercialization of fertilizers, many things were still in the hands of the government 30 years ago and now everything is privatized. There was no free trade in Mexico. I remember saying at that time that it will be very difficult for Mexico to be competing at the international level, not only in basic grains, for example with the United States, which is a monster in terms of grain production. Everything we have seen about the development of for example avocado, berries from agave to citrus, tequila etc. is huge and there are many niches in the market. Also the range of fruits and vegetables has developed tremendously, and that has changed the plant nutrition market. It used to be just corn, beans, wheat and now it's all kinds of vegetables that now count for a big part of our sales. While in the past the market was just goods supplied by the government for the domestic market and it is now international. But the way we do business, that is, buying the product in bulk on the international market and reselling it to a distribution network, hasn't changed much in the last 25 years. The big change we're seeing right now is that instead of raw materials, we're looking for products that add more value to the field with more technology. We do a lot of technical work on site with our promoters, demonstrating the value of the process and thus being able to sell the most differentiated product and not just the goods to the dealer or farmer. And for many of these products we have exclusivity for the country because of the size we have. And well, together with another company we are the market leader here in Mexico.

When you look back on your company and you know what you know today, is there something you would have done differently?

Well, things happen and you learn from them. Bu if I could change anything, it would be the crisis in 2008. Because if I had been more careful and not bought the amount of inventory we had at the beginning of the crisis, we might have been better off  when the crisis came. For the future, this means taking possible risk into account, even if things are going well.

What does the future hold for ISAOSA?

I believe that in the next 5-10 years we will institutionalize the company a lot. Ten years ago several companies came looking to buy us and we never reached an agreement and now we have reached a point where we say we don't want to sell because the truth is that the company is doing pretty well and we see that the strategy we have right now is successful so that we want to develop it in the next 5-10 years. The strategy is to evolve everything related to the nutrition of the plant. This enables us to give advice to the farmer so that the harvest, be it fruit, vegetables or grains, will provide additional benefits through our nutrition programs. That in turn enables the retailer to earn a little more, and we also earn a little more. But the main thing is that the farmer must do well, agriculture is the key to everything.

ISAOSA is becoming more and more of a service company. The service to the farmer, to the distributor and thus the sale of the products is implicit. The most important thing, however, is to create value and value comes with quality, plant health and sustainability of agriculture, meaning there is less contamination of the subsoil and less contamination of the air. I believe that the market will go into this direction in the future as consumers will become more and more important in the future and will accordingly demand more sustainability. The key to this lies in the nutrition of the plant, as this gives us a great influence on parameters such as quality, taste or life of the product

Thank you very much for your time and sharing your story, Everard!