I|orence, 27 Cctober 2010

1he Va|ue of Agro-Industr|a| Weav|ng Iactory

CCkkADC ASSLkA: We have all agreed LhaL Lhe world of agrlculLure and Lhe enLlre producLlon chaln from
agrlfood and agrolndusLry Lo agrlbuslness are lmporLanL parLs of our counLry and an opporLunlLy for
growLh. 8uL we also asked ourselves abouL Lhe maln resLrlcLlons and why we are here. We are Laklng parL ln
Lhls Lype of meeLlng ln order Lo learn, Lo share, Lo undersLand whaL more we can do and how Lo do lL beLLer.
We are developlng Aqtlveotote ln an aLLempL Lo beLLer serve Lhls secLor. 1aklng home Lhe many ldeas LhaL
emerged ls a huge advanLage for us, however, hlghly quallfled people ln publlc admlnlsLraLlon, company
represenLaLlves, academlcs and lndependenL observers, have ralsed a serles of slgnlflcanL problems LhaL can
be Lackled. lL ls obvlous LhaL Lhls dlmenslon of agrlculLural companles ls llmlLlng, even Lhough many have
overcome Lhe problem. lL ls lmposslble noL be amazed when lL ls almosL casually polnLed ouL LhaL 83 of
companles do noL prepare flnanclal sLaLemenLs. A company LhaL does noL prepare Lhe flnanclal sLaLemenLs
ls prlmordlal when lL comes Lo bankablllLy. We wanL Lo learn Lo be even beLLer bankers for Lhe agrlculLural
world, buL credlL ls a heavy responslblllLy and lL ls based on serlous conslderaLlons: resulLs, plans, prospecLs,
guaranLees.
WlLhouL a doubL more musL be done ln Lhls sense. Powever, we all know LhaL ln Lhe agrlculLural secLor, as ln
many oLher secLors, Lhere are very few lLallan companles whose resulLs are ln order, or whlch have credlble,
comprehenslble plans and accessory guaranLees LhaL can compensaLe for Lhe lack of Lhe oLher Lwo aspecLs.
We musL work LogeLher - we, flrsL and foremosL, as a bank - Lo go forward, Lo demonsLraLe LhaL we can see
beyond Lhe flgures. Powever, credlL ls a serlous aspecL. 1he ma[or crlsls LhaL we are all experlenclng erupLed
also because credlL was glven Lo enLlLles LhaL should noL have been glven lL.
1here ls, Lherefore, a loL of work Lo be done LogeLher on assesslng credlL. !usL as Lhere ls a loL of work Lo be
done on lmporLanL pro[ecLs, because Aqtlveotote and everyLhlng we puL lnLo lL as a bank and ln Lerms of
collaboraLlng wlLh Lrade assoclaLlons, musL be aL Lhe servlce of even blgger pro[ecLs: Lhe consLrucLlon of a
chaln from producLlon Lo dlsLrlbuLlon and ma[or lnnovaLlon and lnLernaLlonallsaLlon pro[ecLs.
Powever, upsLream Lhere ls Lhe problem LhaL everyone has ralsed: Lhe average slze, Lhe many small
operaLors, a 1:13 raLlo of young people and Lhe elderly operaLlng ln Lhls secLor, make lL dlfflculL Lo
lmplemenL Lhe pro[ecL. So, LogeLher we musL drlve ln Lhe dlrecLlons LhaL are Lhe mosL obvlous, even Lhough
Lhere are qulLe a number of obsLacles along Lhe way.
8ureaucraLlsaLlon. lL can be lncredlbly dlfflculL Lo operaLe ln Lhe agrlculLural secLor. We musL be sLrong and
deLermlned Lo Lake Lhe road Lo slmpllflcaLlon.
1here are some reglons LhaL wanL a cerLlflcaLe of bankablllLy from a company LhaL, perhaps, does noL yeL
exlsL, before lL can carry ouL conLrlbuLlon operaLlons. And Lhe clrculL comes up agalnsL problems. We can
correcL Lhese processes LogeLher, buL wlLh Lhe knowledge LhaL Lhere ls a serles of crlLlcallLles LhaL have been
Lalked abouL for years and LhaL we have only parLlally resolved ln recenL years.
Clven LhaL as a bank we llve on credlL, Lhe more credlL we glve Lhe beLLer we llve, Lhe less credlL we glve Lhe
fewer posslblllLles we have Lo grow. ln recenL years, cerLaln facLs, cerLaln Lrends from a credlL polnL of vlew,
have been clarlfled. 1here are no secLors. WlLhln each secLor Lhere are very dlfferenL segmenLs and
componenLs. WlLhln any one of Lhese secLors and segmenLs Lhere are companles whlch are successful,
companles LhaL are noL successful, companles LhaL deserve credlL, companles LhaL do noL deserve credlL.
And Lhls leads lncreaslngly Lo Lhe developmenL of a relaLlonshlp of reclprocal knowledge wlLhouL whlch a
banklng relaLlonshlp ls unsusLalnable ln Lhe long Lerm.
Pere ln 1uscany ln parLlcular, and Lhls ls Lrue noL only of Lhe agrlculLural world buL of Lhe enLlre world of
SMLs, we have begun Lo experlmenL wlLh credlL assessmenL mechanlsms, wlLh sharlng company daLa on
Lhe one hand and, on Lhe oLher, bank lnformaLlon LhaL helps Lhe company Lo see whaL lL can do and how lL
can do lL Lo lmprove lLs raLlng and bankablllLy. Cbvlously, Lhls ls belng pushed by 8asel ll and 8asel lll, buL lLs
reason for belng ls, afLer all, Lhe deslre Lo work closer LogeLher ln Lhe long Lerm and ln a way LhaL ls much
more consclenLlous on boLh sldes. LxperlmenLs are belng carrled ouL, here ln 1uscany ln parLlcular, on
reclprocal Lralnlng LhaL are provlng Lo be exLremely saLlsfylng. As credlL managers, we musL be educaLed
abouL Lhe characLerlsLlcs of lndlvldual secLors and Lypes of acLlvlLy because, as Lhe counclllor also sald,
Lhere ls more Lhan [usL agrlculLure, Lhere are oLher secLors and every subsecLor has lLs speclflc
characLerlsLlcs LhaL musL be known abouL and looked afLer by Lhose who glve credlL.
So, reclprocal educaLlon - by Lhe bank on Lhe bankablllLy of pro[ecLs and Lhe meLhods for obLalnlng credlL -
and by Lhe oLher slde on speclflc secLor knowledge for Lhose who musL Lhen look afLer company credlL and
pro[ecLs. ln cerLaln cases, we musL use dedlcaLed sLrucLures because Lhe secLor or secLors are so vlLal, so
speclflc, so complex, as ln Lhls case, LhaL Lhey need people who are LoLally dedlcaLed, LoLally focused and
consLanLly updaLed. Aqtlveotote ls movlng ln Lhls dlrecLlon. lL ls noL a bank wlLhln a bank, lL ls a group of
people LhaL enables Lhe 6,000 branches of Lhe bank Lo undersLand, know abouL, look afLer and sLlmulaLe
pro[ecLs ln Lhe agrlbuslness world for Lhe enLlre producLlon chaln. Moreover, ln Lhe same way as we are
dolng here Loday, lL musL also be a place LhaL pushes answers Lo ob[ecLlvely greaLer sLrucLural problems ln a
dlrecLlon LhaL ls posslble for Lhe enLerprlse and Lhe bank.

ULS1ICN: ls Lhere a bank model LhaL ls aLLenLlve Lo agrlculLure and one LhaL you llke?
lor example, you know CredlL Agrlcole very well as lL was one of your lmporLanL shareholders for many
years. WhaL does Lhls bank have LhaL ls beLLer Lhan whaL we, as an lLallan bank LhaL ls aLLenLlve Lo Lhls
secLor have, beLLer Lhan whaL you wanL Lo make of lnLesa Sanpaolo?

CCkkADC ASSLkA: CredlL Agrlcole ls a bank l hold ln greaL esLeem, l was a member of lLs 8oard of
ulrecLors for many years and l have only poslLlve Lhlngs Lo say abouL lL. lL ls a bank whose rooLs are
essenLlally ln local branches, whlch ln Lhelr Lurn are conslderably dependenL on and llnked Lo Lhe world of
agrlculLure ln lrance. Cbvlously, CredlL Agrlcole has also developed conslderably ln oLher secLors and
agrlculLure ls an lmporLanL componenL, buL lL ls noL Lhe only one.
l belleve LhaL whaL Lhe large world of agrlbuslness, agrolndusLry, agrlfood needs ls noL so much a bank LhaL
ls focused only on LhaL, buL one LhaL knows Lhe world, knows oLher secLors and can acL as a brldge beLween
agrlculLure and unlverslLles, beLween agrlculLure and lndusLry, beLween agrlculLure and flnance, beLween
agrlculLure and exporLlng, wlLh dedlcaLed, compeLenL sLrucLures LhaL have a Lhorough knowledge of Lhe
characLerlsLlcs of agrlculLure.
ln oLher words, nowadays agrlculLure, and Lhls has been sald by many before me, does noL need Lo be
lsolaLed by secLor-speclflc credlL, lL needs Lo be a parL of Lhe producLlon chaln, on lnLernaLlonal markeLs, Lo
lnLerface wlLh research, and lL ls here, probably, LhaL a bank operaLlng ln Lhese areas and feellng capable of
belng a brldge can glve a loL. And wlLh Lhe alm of servlng Lhe speclflc secLor of agrlculLure wlLh dedlcaLed
sLrucLures llke Aqtlveotote, for example, whlch, l repeaL, ls noL an agrlculLure-dedlcaLed bank wlLhln a bank
ln our Croup, buL a group of people wlLh experLlse, whlch we wlll sLrengLhen even more, LhaL enables our
6,000 branches ln Lhe LerrlLory Lo brlng addlLlonal compeLence Lo pro[ecLs of parLlcular lmporLance whlle
conLlnulng Lo have relaLlonshlps wlLh farmers.

ULS1ICN: lrom an organlsaLlonal polnL of vlew, can you spread Lhls added value Lo lnclude Lhe culLural
aspecL? Are you able Lo exLend Lhls new culLure Lo branches ln addlLlon Lo Lhe pure and slmple avallablllLy
of Lhls lnLernal compeLence? 8ecause l know LhaL lnvolvlng 6,000 branches ln Lhls process ls easler sald Lhan
done, even Lhough you make lL sound easy.

CCkkADC ASSLkA: 1hls ls an lmporLanL sub[ecL. 1he neLwork of branches we are creaLlng ln lLaly ls Lhe
largesL ln Lhe world, ln Lhe sense LhaL Lhere are no oLher counLrles ln whlch a bank has bullL up a neLwork of
Lhls slze, aL leasL noL ln Lhe WesLern world, perhaps Chlna wlll creaLe even blgger neLworks, buL ln counLrles
llke ours Lhere are no bank neLworks LhaL are as wldespread .
1hls demonsLraLes someLhlng: LhaL we really belleve ln lLaly.
1he facL LhaL - and Lhe flgures prove lL ln a way - our LrusL ln Lhe lLaly SysLem" corresponds Lo almosL 300
bllllon, equal Lo 1/3 of Cu, ls conslderable proof of how much we belleve ln Lhls counLry.
Cf course, ln order Lo glve a concreLe demonsLraLlon LhaL you belleve ln a counLry, you musL know how Lo
organlse - and Lhls ls Lrue for Lhe 8anca del 1errlLorl model - Lo keep banks focused, llnked Lo and rooLed ln
Lhe LerrlLory, by glvlng Lhese banks whaL only a large lnLernaLlonal or naLlonal bank can glve ln Lerms of
experLlse and resources. 1herefore, havlng rooLs buL also belng lnLernaLlonal. And knowlng how Lo dlalogue
wlLh every secLor Lhrough speclallsL experLlse and dedlcaLed sLrucLures LhaL are capable of permeaLlng Lhe
6,000 branches.
Clearly, lL ls unLhlnkable LhaL all 6,000 branches wlll be equlpped Lo glve speclallsL asslsLance Lo Lhe
agrlculLural secLor. So, reglon by reglon, zone by zone, wlLh oLher assoclaLlons LhaL represenL agrlculLure, we
wlll ldenLlfy Lhose subzones ln whlch lL ls lmporLanL Lo have branches LhaL are more focused, perhaps wlLh
recognlsable lnLernal sLrucLures LhaL are devoLed Lo and faclllLaLe Lhe work of agrlculLural enLrepreneurs.
Powever, Lhls sub[ecL Louches on a LruLh: LhaL good managemenL of a neLwork of 6,000 branches ls a
complex process. ln our Lurn, we, Loo, musL slmpllfy. 1he road we have Laken alms aL maklng agrlbuslness a
corporaLe mlsslon, and Lhe facL LhaL l am here Lo say lL as a represenLaLlve of Lhe company ls, l hope, a
concreLe demonsLraLlon. lL means seLLlng up dedlcaLed, speclallsL, compeLenL sLrucLures. lL means formlng
alllances wlLh Lhe assoclaLlons LhaL represenL Lhls world, lncludlng lsmea, whlch l knew Lo be an lmporLanL
organlsaLlon, buL dld noL know how comprehenslve lL was ln Lerms of offer. lL means collaboraLlng wlLh
Lhem Lo share ldeas and pro[ecLs. lL means expresslng Lhe ablllLy Lo be ln Lhe LerrlLory also by havlng a serles
of speclallsed branches so LhaL we have an even closer bond wlLh Lhe world of agrlculLure.

ULS1ICN: 1wo lasL quesLlons, whlch are addressed, naLurally, Lo a man ln economlcs, buL even more so Lo
a clLlzen Lhan Lhe man from a large bank.
We have spoken abouL Lwo sub[ecLs LhaL dlvlde. l'll refresh your memory before you reply.
1raceablllLy, LhaL ls, how many quarLers of lLallan-ness musL a producL conLaln ln order Lo be presenLed Lo
Lhe markeL as MoJe lo ltoly, and CMCs, Lhe sub[ecL of fronL pages and Lalk shows and abouL whlch, alas,
Lhere ls much mlslnformaLlon.
WhaL do you Lhlnk?

CCkkADC ASSLkA: l LhoughL l had covered everyLhlng and only had Lo brlng my Lalk Lo a close!
So, on boLh sub[ecLs.
As far as LraceablllLy ls concerned, l belleve LhaL a very wlse poslLlon was expressed before. l belleve LhaL
knowlng whaL ls lnslde Lhe Lhlngs Lhey buy and eaL ls very valuable for consumers. l don'L see anyLhlng
wrong ln Lhe facL LhaL, ln cerLaln cases, Lhe lLallan componenL ln some MoJe lo ltoly producLs ls greaLer buL
noL LoLal. WhaL ls lmporLanL ls LhaL lL ls clear whaL ls lnslde. l belleve LhaL ln a greaL many cases, 100 lLallan
LraceablllLy ls a subsLanLlal as well as a very sLrong commerclal elemenL. lf we conslder how much our
counLry ls harmed by Lhe lLallan soundlng" phenomenon, Lhe carlcaLures of lLallan producLs, Lhe rubblsh
LhaL clrculaLes and ls llnked Lo lLaly purely by a mechanlsm of markeLlng, we wlll reallse how much lL ls of
value Lo us, Lhe facL of belng able Lo demonsLraLe LhaL cerLaln producLs are LoLally of lLallan orlgln and a
Lreasure Lo be defended.
ln some ways, Lhls ls llnked Lo Lhe sub[ecL of CMCs. A compllcaLed sub[ecL LhaL no maLLer whaL ls sald abouL
lL, Lhere wlll always be someone wlLh exLremely worLhy oplnlons who ls dlssaLlsfled.
l belleve LhaL ln Lhe world of agrlculLure research ls also a fundamenLal lever for developmenL. 1hls does noL
mean only geneLlcs, buL an enLlre sphere of research. l Lhlnk we musL lnvesL ln research for agrlculLure
wlLhouL pre[udlce. l also Lhlnk LhaL Lhe sub[ecL of CMCs ls very dlfferenL ln dlfferenL parLs of Lhe world and
even ln dlfferenL producLlon chalns. So we can'L really say whaL ls good for an Afrlcan counLry wlLh problems
of droughL and famlne ls also good for our counLry where we have Lhe problem of proLecLlng Lhe lLallan
conLenL. 1here wlll be dlfferenL answers Lo dlfferenL problems, dlfferenL emergencles, LradlLlons, and
ob[ecLlves. And lL ls probable LhaL ln some parLs of Lhe world more efforL musL be made Lo flnd Lhe Lools
LhaL wlll make world producLlon susLalnable ln Lerms of quallLy and predlcLablllLy, even ln adverse
condlLlons.
Pavlng sald LhaL, l agree wlLh much of whaL was sald by Lhe Lwo speakers who dlscussed Lhe value of lLallan
unlqueness. ln Lhe world of agrlfood we have a serles of producLs LhaL are unlque, recognlsable,
unrepeaLable and Lhelr dlverslLy and unlqueness musL be enhanced. AnyLhlng ln Lhe dlrecLlon of
homogenlsaLlon, of maklng producLs less safe, less LradlLlonally guaranLeed, does noL go agalnsL ldeologlcal
or eLhlcal aspecLs, buL agalnsL commerclal lnLeresLs and markeLlng, lLallan agrlculLure's poslLlonlng ln Lhe
world, whlch ls very dlfferenL from Lhe exLenslve agrlculLure, for example, ln many oLher counLrles. So, l'm
noL saylng boLh and", buL whaL l Lhlnk ls whaL l sald.
ALAuSL.