Doron Mamo, the CEO of DRTS, recently sat down to discuss the differences between implementation of new drip irrigation technology in emerging markets versus those in developed countries. While both are good markets for new DRTS technology, the process of setting up a business in a new market is a challenge Mr. Mamo enjoys tackling.
Drip Irrigation in Developed Markets
Working in developed countries is completely different from emerging markets. Businesses in developed countries generally already have their factory set up, funding in place, and they know their market by the time they begin searching for drip irrigation production lines. Generally, manufacturing companies in developed markets are looking to add a new line to increase their production and meet market demand, or for ways to make their production more efficient.
Drip Irrigation in Emerging Markets
In emerging markets, the needs of new entrepreneurs or foreign companies looking to enter the drip irrigation market are very unique to those markets. Here are some key aspects of entering the drip irrigation market in emerging markets:
- Product Choice: Before companies start production and, potentially, waste many hundreds of thousands of dollars on the wrong product, they should first try out a variety of products in the new market to ensure they’ve made the right product choice for their particular market. The needs of emerging markets can differ greatly from established markets due to the type of agriculture, the climate, the economic status of farmers, and other factors. While DRTS drip tape tends to be a stable entry product for emerging markets, we understand the value in testing your specific market first. We work together with manufacturers across the globe who can offer you white label test runs of many different types of irrigation lines. This allows entrepreneurs to begin setting up their distribution system and test the market before making a final decision on product choice and production line.
- Financing: Entrepreneurs entering emerging markets should consider the different financing sources available to them that are unique to their market. Governments and private organizations in many emerging markets are beginning to prioritize irrigation and offer subsidies, grants and loans to new entrepreneurs in the irrigation industry. DRTS provides guidance about these financing opportunities and helps new entrepreneurs create funding plans that accurately account for the different expenses in setting up and running a drip irrigation factory. We help describe and explain the different costs associated with not only machinery purchase, but also in setting up a factory. We recommend planning for six months of operational costs, as it takes at least that long for sales to start sustaining the operation.
- Infrastructure: Drip irrigation factories have many specific needs beyond just machinery, and these needs can sometimes differ based on the regulations of the country. We work with clients in developing countries to ensure their facility will be able to meet these needs and allow them to maintain the necessary product quality. DRTS is available to advise clients on the creation of a factory that has the necessary components for successful drip irrigation production: electricity, water and water chiller, air compressor, appropriate storage, and a modest lab to check product quality, among other needs.
- Distribution Network: Having a distribution network established is what allows you to sell your product as soon as it comes off the machines. Working with DRTS up front to choose the right product means you’ve already started establishing this network and can continue to grow it as your factory gets up to speed.
When DRTS works with a client in an emerging market, we offer a complete package to help them set up their operation. While we sell the machines they need to manufacture a variety of different types of irrigation hose, we also have the experience to help them get their set-up right the first time. We work closely with our clients to ensure they address key decisions such as product choice and setting up a distribution network that will give them a higher chance of success over the long term.