Ten Questions With Joel Goldsmith
Following the announcement of Goldsmith Seeds' purchase by Syngenta on October 21, Greenhouse Grower Group Editor Richard Jones caught up with Goldsmith President Joel Goldsmith to talk more about the details of the deal and the impact it will h
October 22, 2008
Following the announcement of Goldsmith Seeds' purchase by Syngenta on October 21, Greenhouse Grower Group Editor Richard Jones caught up with Goldsmith President Joel Goldsmith to talk more about the details of the deal and the impact it will have on the two companies and on the industry.
Q: What was the impetus for the decision to sell the company to Syngenta?
Goldsmith: I can't say it's something we were looking to have happen. It came out of discussions Syngenta had initiated. We've been talking off and on, actually, for a number of years. But we finally were able to reach agreement and that all happened in the last week or so.
Q: We're disappointed to see a family business go, but it seems like an understandable move on your part.
Goldsmith: I would share those feelings. I'm sorry to see it not be a family business. But at the same time, I think this is the best way for what everybody in this company has worked for to survive, and be around for the long term. This is the right move for that.
Q: Did the current economic conditions spur these talks along?
Goldsmith: No, not really. All of our discussions have been outside of the current short term economic conditions - or what I'm hoping is a short term economic situation.
It did not play a role, other than to be an illustration from our standpoint of the kind of things we're concerned about as a family business, withstanding downturns in the business for whatever reason. You know, we're going along very well right now, and as long as that continues we don't have any problems. But you remember the problems with Ralstonia four or five years ago. Those are the types of things that could dramatically impact our ability to survive and be successful. So more than anything that's what we're offsetting here.
Q: What will your role be from here on out?
Goldsmith: I'm still in charge, and we're going to be running this under the Goldsmith name. The plan is to utilize the name because they see a lot of value in it in what we've built.
And I think there are some really good aspects to keeping things separate. You muddy things up too much and people don't know whether they're a customer or a competitor or how that all fits together. I'm a believer that if you can have each of your business segments with an identity, that people know who you are and what you do, you're better off.
Q: Will this impact your production?
Goldsmith: We and Syngenta have very different models. We do almost all of our production ourselves. And Syngenta uses a lot of contract seed producers. In this day and age, with the emphasis on seed quality being what it is, I think having it under your own control is a better model overall. It doesn't mean contract can't work, but it's harder to manage and it's harder to maintain the quality when it's a separate process from everything else you're doing.
Syngenta is excited about what we can do in Guatemala and we have some extra capacity down there we haven't filled up yet with seed, so I'm sure we'll find uses for that on some of their product.
Q: What changes will people notice from the outside?
Goldsmith: That's hard to say at the moment. For the most part I don't anticipate a lot of external changes. We still have to go through the integration process - we have a lot of areas where we both are active. We both have flower breeding facilities and staff, so we have to look at that and see how it's going to fit together. We've already talked some about the production. And then there's also the sales of the products at the wholesale level. Syngenta does that currently for North America out of Boulder. That I'm sure will be looked at because that's mainly a vegetative expertise there. So we'll have to look at that. We could see some changes there.
But I don't expect dramatic changes. We're doing very well right now so they're not coming in to change a lot of stuff. They're coming in to build on what we're doing, so we'll just have to see how that manifests itself out in the marketplace.
Q: What about the areas where there are some product redundancies?
Goldsmith: Syngenta offers quite a range of products that we don't currently have. But there's overlap on impatiens and petunias and geraniums and cyclamen and pansies and a whole list of major crops where they've got products and we've got products. We'll have to sit down together and go through those and do a good analysis to see which ones should continue and which ones won't because there are savings to be made if we narrow that product mix, I believe.
But we don't want to get rid of good stuff. If we both have good products, those should continue to be sold in the marketplace.
Q: Will you decide what stays and what goes, or will you leave that up to the market?
Goldsmith: There will be certain decisions made as part of the integration and then there will be other ones where it will be a marketplace decision. We do that a fair amount - we introduce a new product and leave the old one in the marketplace and see what happens. If the new one adds to the sales, that's great. If it takes away, then down the road you get rid of that old one.
Now, I have to do my disclaimer. Those things won't be worked out until we go through the finalization process, which we're estimating will take 6-8 weeks.
Q: You recently announced some changes for Pack Trials next year, and that Goldsmith and Syngenta wouldn't be partnering at the same location as you have in the past. Is that changing back?
Goldsmith: Most likely we will be having joint Pack Trials again. I don't know that decision's been made yet, but in fact there were joint discussions today, so that will be worked out pretty soon.
Q: Will there be any other impact on the staff at Goldsmith?
Goldsmith: About 10 years ago we started an employee stock ownership plan here and that's a significant component to our employees' retirement program. Through that they are going to participate in this sale to the tune of about 20 percent. That will go to the retirement programs of all of our permanent employees that have been here long enough to be in the program. So, they will see some financial gain from this as well, which is really good in this financial market.