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

Top 100 Articles

CropLife 100CHS: Driving Momentum To Help Farmer-Owners Grow
December 11, 2014
CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, must capture new opportunities to Read More
CropLife 100BRANDT, Verdesian Ink Distribution Agreement
December 9, 2014
The agreement grants BRANDT the exclusive right to sell and market Verdesian’s patented Steric chemistry in the Turf and Ornamental and eastern U.S. ag markets under the BRANDT Reaction product line name. Read More
CropLife 100CropLife 100: The Colors Of Custom Application
December 5, 2014
Although many color spray rigs are in the yards of the nation’s top ag retailers, the majority of them still come in only a few shades. Read More
CropLife 100Pinnacle Invests In Meridian Agriculture Distribution
December 4, 2014
Meridian will provide retailers with supplier-branded products and numerous opportunities to differentiate themselves from their competitors. Read More
CropLife 100CropLife 100: Entering A New Seed Era
December 4, 2014
The seed category has been re-vitalized during the past few years, and more good news (and varieties) are headed the industry’s way in 2015. Read More
CropLife 100CropLife 100: The Depressed State Of Fertilizer
December 3, 2014
Following downright giddy growth earlier this decade, fertilizer sales have fallen back down to earth the past two years. Read More

Latest News

FertilizerGlobal Fertilizer Market: Cloudy With A Chance Of Sprin…
December 22, 2014
While spring demand in the Northern Hemisphere will prevent prices from slipping significantly, Rabobank believes that lower farmer margins will incent farmers to be more prudent in fertilizer application. Read More
Management2014: Looking Back, Looking Forward
December 22, 2014
Paul Schrimpf and Eric Sfiligoj discuss key emerging issues from the year past that retailers will be watching closely in Read More
FungicidesAlfalfa Expert: Root Rot More Widespread Than Previousl…
December 22, 2014
Once thought of as a wet-soil disease, aphanomyces root rot is more widespread than many realize. Read More
Seed/BiotechKaren Arthur Joins AgriThority As Seed Treatment Produc…
December 19, 2014
Prior to joining AgriThority, Arthur directed research and development programs, overseeing laboratory and field research, to build the Valent U.S.A. seed treatment portfolio. Read More
EquipmentJohn Deere To Sell Crop Insurance Business
December 19, 2014
Deere & Co. has reached a definitive agreement to sell its crop insurance business, subject to regulatory approval, to Farmers Mutual Hail Insurance Co. of Iowa. Read More
Crop InputsNufarm Fills Regulatory VP Position
December 18, 2014
Nufarm announced today that Rob Schwehr has been promoted to the position of Vice President of Innovation & Regulatory Affairs for Nufarm Americas. Read More
Seed/BiotechReport: China Approves Viptera Corn, U.S. Officials Awa…
December 17, 2014
Chinese authorities have informed some agriculture industry officials the government has approved U.S. imports of a type of genetically modified corn developed by Syngenta. Read More
FertilizerMonty’s Plant Food Brings In New Sales Rep
December 16, 2014
Monty's Plant Food Company has hired Warren Kearns as its newest Sales Representative for the South Carolina area. Read More
EquipmentHagie Wins 2014 CropLife IRON Product Of The Year Award
December 15, 2014
The self-propelled sprayer maker has a hit on its hands with the new STS Series model. Read More
Syngenta
Seed/BiotechSyngenta Sees China Approving Contentious GMO Corn Soon
December 15, 2014
Syngenta will make an announcement when it receives official documentation from China that Agrisure Viptera corn, known as MIR 162, has been cleared for import. Read More
Crop InputsVerdesian Life Sciences Names Vice President Of Communi…
December 15, 2014
Amy Bugg will oversee the execution of all promotional strategies for the corporate brand and the complete product portfolio. Read More
StewardshipFarmers, Retailers Attend 4R Certification 4U Workshop
December 15, 2014
More than 160 farmers and ag retailer attended the “4R Certification 4U” workshop December 12 to learn more about the 4Rs of nutrient stewardship, water quality research in the area and cost-sharing opportunities. Read More
Matt Hopkins10 Best New Agriculture Apps For 2015
December 15, 2014
These new agriculture apps are certain to help ag professionals do their jobs more efficiently in 2015 and beyond. Read More
ManagementARA Learnings, Retail Buying Intentions: Welcome To Cro…
December 12, 2014
This informal video program puts news and events effecting retailers into context, and features Editors Paul Schrimpf and Eric Sfiligoj. Read More
Seed/BiotechMonsanto Herbicide-Tolerant Technology Closer To Commer…
December 12, 2014
The final EIS moves Monsanto one step closer to the introduction of Bollgard II XtendFlex cotton and Roundup Ready 2 Xtend soybeans, paving the way to provide access to dicamba-tolerant soybeans and cotton. Read More
Seed/BiotechUSDA Issues Final Environmental Impact Statement On Her…
December 12, 2014
The USDA Animal and Plant Health Inspection Service (APHIS) is issuing a final environmental impact statement on varieties of cotton and soybeans that have been genetically engineered for resistance to several herbicides, including the one known as dicamba. Read More
CropLife 100CHS: Driving Momentum To Help Farmer-Owners Grow
December 11, 2014
CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, must capture new opportunities to Read More
LegislationARA Applauds CFATS Passage Prior To Holiday Adjournment
December 11, 2014
The streamlined bill provides a four-year authorization of the CFATS program and guidance to DHS on key issues of chemical facility security Read More