Shifting Fortunes

Bayer CropScience flagsAs the world’s leading crop protection product manufacturer, Bayer CropScience AG has no plans to relinquish its commitment to this market. Indeed, the market share crop protection products represent within the company’s total sales structure will remain at more than 70% over the next decade.

However, Bayer CropScience will begin moving a substantial portion of its market focus from this segment to faster-growing ones, including seed.

In mid-September, CropLife® was one of a handful of American-based trade magazines invited to attend Bayer CropScience’s annual press conference in Monheim, Germany. During the meeting, Prof. Dr. Friedrich BerÂschauer, chairman of the board of management for Bayer CropScience AG, described the company’s marketing plans through 2015.

“There will be a distinct shift in our product portfolio over the coming years,” said Berschauer. “Whilst crop protection will remain the mainstay of our company, the more rapid growth in the seed and traits and environmental science areas will lead to these business units gaining in the proportion of sales.”

In truth, he added, it was no mystery why Bayer Crop­Science is taking this route forward. For the past few years, crop protection product sales have struggled worldwide and the first half of 2006 has been no exception to this trend. “Our crop protection business suffered as a result of the weather conditions and the difficult market conditions in Brazil, falling by a total of 1.9%,” said Berschauer. This decline put total crop protection sales for Bayer CropScience during the first half of 2006 at $3.37 billion.

Particularly hard hit were sales of the company’s insecticides business, which dropped 6.1% to $835 million. Likewise, seed treatment sales — which are reliant on insecticide and fungicide popularity — also fell 6% to $274 million. “For insecticides, this was mainly due to the divestment of some of our older active ingredients in 2005 as part of our ongoing portfolio adjustment,” said Berschauer. “For seed treatments, the drop was the result primarily of the European Union sugar market reform, which has led to a reduction in the area under sugar beet cultivation.”

Herbicide sales for Bayer CropScience declined 0.9% over the same time period to $1.34 billion. Berschauer blamed this drop on the lingering drought conditions in Australia and parts of the U.S. hurting cereal and cotton crops.

The one bright spot among crop protection segments was fungicides, where sales improved 2% to $917 million. “This growth was driven by the excellent development of our new cereal treatment prothioconazole,” he said. Introduced in 2004, prothioconazole increased sales 31.4% during the first half of 2006 to $142 million. It currently ranks fifth among Bayer CropScience’s top selling crop protection products.

Instead, Bayer CropScience plans to restructure its crop protection business to focus on newer, more profitable active ingredients while divesting older ones from its portfolio. According to Dr. Rödiger Scheitza, labor director and head of portfolio and supply chain management for the company, Bayer CropScience has sold 29 active ingredients over the past six years, with more divestments on the way.

“Our main attention in portfolio management is focused on gradually transferring business from less profitable products to these new active ingredients — in other words, successively replacing older active ingredients by ones with higher value creation,” said Scheitza. “Our active portfolio management means that we will conduct our business with diminishing numbers of active ingredients. While there were 114 in 2000, it should be only 99 active ingredients at the end of this year. Bayer CropScience plans to reduce this number further to 87 by 2010.”

Going With More Seed

While Bayer CropScience reduces its crop protection portfolio, the company hopes to expand its seed and traits business. In particular, Bayer CropScience is targeting four segments for its seed efforts — vegetables, rice, canola, and cotton. By 2015, the company believes seed and traits sales will represent approximately 15% of Bayer CropScience’s total revenue, up from 5.5% today.

However, he added, the company doesn’t plan to get involved directly in soybean or corn seed. “Those two markets already have several seed producers, so it makes more sense for Bayer CropScience to look for partners in those areas rather than enter them directly,” said Scheitza.

As for the company’s future, Scheitza foresees more growth potential on the horizon. “We are convinced that Bayer CropScience will be able to maintain its leading position in conventional crop protection on the basis of innovative active ingredients and simultaneous portfolio adjustments,” he said. “In view of the forecast, above average growth of the seed business in Bayer CropScience’s key crops — vegetables, rice, cotton, and canola — we are confident that we will be able to substantially enlarge our position in the seed market in the next decade.”

Leave a Reply

Crop Inputs Stories

Crop InputsPlatform Specialty Products To Acquire Arysta LifeScience
October 20, 2014
Once the acquisition is complete, Platform Specialty Products will combine Arysta LifeScience with previously acquired companies Agriphar and Chemtura Crop Solutions. Read More
MicronutrientsMicronutrients Going Macro
September 9, 2014
Between 2014’s fantastic growing conditions and a heightened awareness on plant nutrition, the major players in micronutrients are gearing up for another big year. Read More
FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More
FungicidesSudden Death Syndrome, Brown Stem Rot Reported In Indiana Soybeans
September 3, 2014
Farmers and retailers should be watching for symptoms of these two diseases over the next few weeks as they are best managed through preventative methods. Read More

Trending Articles

InsecticidesNew Research Study Shows The Value Of Neonics
October 29, 2014
The study evaluated seed treatment, soil and foliar uses of neonicotinoid insecticides in the U.S. and Canada. Read More
Crop InputsPlatform Specialty Products To Acquire Arysta LifeScience
October 20, 2014
Once the acquisition is complete, Platform Specialty Products will combine Arysta LifeScience with previously acquired companies Agriphar and Chemtura Crop Solutions. Read More
Seed/BiotechMonsanto Offers New Support For Ferguson, Area Communities
October 8, 2014
Monsanto Co. has committed $1 million in new support for several collaborative efforts in Ferguson, MO, and surrounding communities in North St. Louis County. Read More
Seed/BiotechUnapproved Genetically Modified Wheat Found In Montana
October 3, 2014
USDA reports that one year after discovery of Monsanto's unapproved wheat in a single Oregon field disrupted U.S. wheat export sales, the GMO wheat has again been found in Montana. Read More
Equipment2014 Product Of The Year Voting
September 19, 2014
The deadline to vote for the 2014 CropLife IRON Product of the Year is October 31. Please cast your vote today to help us determine the winner. Read More
FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More

Latest News

StewardshipTFI Recognizes Michigan, Maryland Farms For 4R Stewards…
October 31, 2014
As farming practices increasingly attract interest from the general public, two farmers are ensuring they meet public approval. Read More
Eric SfiligojBig Brother Is Already Watching
October 31, 2014
Opponents to UAVs seem to think they could be used to spy on other people. But spying is already taking place, through the Internet. Read More
StewardshipAsmark Institute’s New Training Center Focused On…
October 31, 2014
The newly dedicated Ford B. West Center for Responsible Agriculture will be used as a national training and education center for professionals in the ag input industry. Read More
StewardshipCTIC Tour Dives Deep Into Everglades
October 31, 2014
The most recent Conservation In Action Tour (CTIC) hit South Florida recently to tour the Everglades Agricultural Area. Read More
StewardshipResponsibleAg Begins Auditor Training
October 31, 2014
ResponsibleAg auditor training is now underway at the Ford B. West Center for Responsible Agriculture in Owensboro, KY. Read More
CropLife 100ValueAct Buys Stake In Fertilizer Dealer Agrium
October 30, 2014
ValueAct has bought 8.2 million shares in Calgary, Alberta-based Agrium, making them the second largest investor in the fertilizer dealer. Read More
InsecticidesNew Research Study Shows The Value Of Neonics
October 29, 2014
The study evaluated seed treatment, soil and foliar uses of neonicotinoid insecticides in the U.S. and Canada. Read More
StewardshipUSDA To Provide $4 Million For Honey Bee Habitat
October 29, 2014
Agriculture Secretary Tom Vilsack announced today that more than $4 million in technical and financial assistance will be provided to Read More
Crop InputsValent Launches New Low VOC ProGibb LV Plus Plant Growt…
October 29, 2014
ProGibb LV Plus PGR is a high-potency, liquid gibberellic acid formulation designed to comply with California’s new air quality standards for high volatile organic compound agricultural products. Read More
Crop InputsBayer CropScience Acquires Certain DuPont Crop Protecti…
October 29, 2014
Bayer CropScience and DuPont Crop Protection have signed an agreement for Bayer to purchase certain DuPont Crop Protection Land Management assets in the U.S., Canada, Mexico, Australia and New Zealand. Read More
ManagementWest Central Names New President
October 29, 2014
West Central’s board of directors have announced their unanimous decision to name Milan Kucerak President and CEO-elect following Jeff Stroburg’s retirement at the end of the fiscal year. Read More
InsecticidesValent U.S.A., MGK Form Marketing Agreement
October 24, 2014
Valent has formed an agreement with Minneapolis-based MGK to manage the marketing and sales of MGK’s crop protection line of insect control products within the U.S. beginning April 1, 2015. Read More
StewardshipFlorida’s 4R Advocate Keeps Improving
October 24, 2014
Florida farmer Alan Jones uses the 4R principles of nutrient stewardship as the core of his fertility program, which allows him to maximize production and keep costs in check. Read More
Seed/BiotechMonsanto Named One Of The World’s Best Multinational …
October 23, 2014
Monsanto ranked No. 8 in the world’s largest annual study of workplace excellence that identifies the top 25 best multinational companies in terms of workplace culture. Read More
Crop InputsArysta Hires Former Agri-Chem, CPS Employee For Delta S…
October 23, 2014
New Territory Sales Manager Mark Peel’s primary role will focus on working with growers regarding fungicides in Louisiana, Mississippi, Arkansas and Tennessee. Read More
CropLife 100GROWMARK Announces Appointments In Plant Food Division
October 22, 2014
GROWMARK, Inc. has announced the three key staff changes in its Plant Food Division. Read More
CropLife 100GROWMARK Appoints New VP Of Finance And Risk Management
October 22, 2014
Wade Mittelstadt has been named GROWMARK Vice President, Financial and Risk Mangement, effective December 1, 2014. Read More
FungicidesEPA Approves BASF In-Furrow Corn Fungicide
October 22, 2014
Field trials show Xanthion In-furrow fungicide provides more rapid emergence, extended residual control and improved seedling health than untreated crops. Read More