Argentinian Biopharmacy Company Goes Digital to Protect Cows and Grow Business

For 85 years, Biogénesis Bagó has been developing medicine and vaccines to protect livestock. Now this Argentinian biopharmacy company is undergoing a digital transformation to support its continued growth across Latin America and Asia.

Meat is central to the Argentinian identity. One of the top 10 beef exporters globally, the country evokes images of old-time gauchos, or cowboys, and attracts tourists to its famous steak houses.

Based in Garín, Argentina, Biogénesis Bagó has been developing medicine and vaccines to protect the health of livestock for 85 years. Today it has a manufacturing presence in six countries and exports to 14 others, safeguarding the wellbeing of cattle, sheep, horses, swine, and pets worldwide.

Chief Information Officer Marcelo Sica has been with the company for 17 years and in the last five years he has lead the building of IT systems that keep pace with its expanding business. He explains that the company has been focused on strengthening its presence in Latin American markets, particularly Brazil, but in 2016 it started a joint venture with HILE Biotechnology to produce foot-and-mouth disease vaccine in China.

“If you add production capacity from Argentina to the capacity we now have in China, we’re one of the largest foot-and-mouth vaccine producers in the world,” says Sica. The company manufactures approximately 300 million doses in Argentina and 400 million in China. These vaccinations are critical to large beef-producing countries like Argentina since beef cannot be exported to countries like the U.S. and the UK without proof of vaccination.

With its foothold in China, the company has now expanded to other parts of Asia, including Taiwan, Vietnam, and South Korea. Moreover, the company expects to double its three percent share of the foot-and-mouth market in China next year.

Biogénesis Bagó’s rapid global growth created challenges for Sica’s team. “We had been expanding quickly but in each country we had a different ERP solution, which made integration very complex,” he says. “We needed an alternative that could be used worldwide.”

The company chose SAP S/4HANA. “SAP gave us all the functionality we needed across the company,” Sica explains. “We used this project – and the related changes – to start our digital journey.”

Sica notes that SAP stood out against competitors because it provided the best support. In Argentina, support is more important than price and other factors when choosing an IT vendor.

IDC Analyst Juan Pablo Seminara sees a similar trend: “Because of the peso’s devaluation it’s harder for customers to buy hardware. So we see that investment going down, but software spending is going up, which indicates strong software adoption.”

Seminara also says that unlike five years ago, now 80 percent of the top 2,000 companies in Latin America are going through some kind of digital transformation. A newly published study by IDC says that 42 percent of companies have identified the need for a digital strategy, but also notes that execution is at an early stage. IDC predicts that by 2022, “50 percent of Latin American GDP will be digitized, with growth in every industry driven by digitally enhanced offerings, operations, and relationships.”*

Biogénesis Bagó is no exception — its digital transformation strategy has two goals: to standardize processes companywide and increase efficiency, and to become more competitive.

“Our geographic distribution and diversity demands that we have one platform so we can speak the same language,” Sica explains. “That will enable us to be more flexible, improve decision making for our business, and be better prepared for international commerce.”

He also believes digital transformation will help advance Biogénesis Bagó’s industry leadership. Biopharma industries have typically adhered to traditional way of doing things but this is starting to change. “We have to make an extra effort to position our products, brands and quality above others,” he says. “As we go global, we need to leave behind traditional processes that keep us from moving faster.”

The company started using SAP S/4HANA in Bolivia and Uruguay last year. Sica’s team will deploy the solution in Argentina later this year, benefiting from the lessons learned abroad, and then expand to Brazil and Asia.

SAP has already helped Biogénesis Bagó improve manufacturing, finances, warehousing, product, and quality testing. Biogénesis Bagó plans to use cloud-based analytics from SAP to track critical business key performance indicators (KPIs) and create a “boardroom of the future” so executives can monitor business health in real time.

Sica says that SAP S/4HANA has positively impacted almost all the company’s manufacturing and operational areas.

“We’re seeing the biggest difference is in the manufacturing quality area. With the previous solution, we didn’t have enough information to do traceability well,” he says. SAP has also introduced best practices to optimize data collection processes. “Now we have all the details for declarations and to meet the requirements of each country we export to.”

*IDC FutureScape: Latin America IT Industry 2019 Predictions, Ricardo Villate, GVP Latin America.