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 100BRANDT Commemorates National Ag Day
March 20, 2015
The Illinois agriculture community gathered at BRANDT global headquarters on March 18 to celebrate National Ag Day behind this year's theme Sustaining Future Generations. Read More
Wheat Growers, North Central Farmers Elevator Pursue Merger
CropLife 100Wheat Growers, North Central Farmers Elevator Pursue Merger
March 3, 2015
Two CropLife 100 retailers — South Dakota Wheat Growers (ranked No. 11) and North Central Farmers Elevator (No. 19) — have entered into a Letter of Intent to unify the two companies into a newly named cooperative. Read More
Growmark Group
CropLife 100GROWMARK In 2015: Back, To The Future
March 2, 2015
The nation’s third largest ag retail organization is simultaneously moving forward while remembering its past. Read More
CropLife 100Pinnacle Expands Sanders Brand In The South
February 27, 2015
Pinnacle has acquired Hopkins Seed and Chemical in Qulin, MO, which expands the company's Sanders brand to nine Southern states. Read More
CropLife 100Pinnacle Launches New Providence Agriculture Location In Indiana
February 27, 2015
Pinnacle Agriculture Holdings — ranked No. 6 on the CropLife 100 — has established a new retail location in New Castle, IN, which will operate as part of Pinnacle's Providence Agriculture brand. Read More
Carl Casale of CHS
CropLife 100Cooperative CHS Returns $518 Million To Owners
February 23, 2015
The 2015 cash return to owners is based on CHS net income of $1.1 billion, the company's second highest on record. Read More
Latest News
Nachurs Alpine Solutions, Liquid fertilizer, micronutrients, facility
MicronutrientsYara Launching YaraVita Procote Liquid Micronutrients
March 31, 2015
Yara North America, Inc. broadens its fertilizer coating offerings with the introduction of YaraVita Procote, oil-based micronutrient liquid suspensions that Read More
Industry NewsINCOTEC Board Member To Retire
March 31, 2015
JanWillem Breukink has decided to retire from his position on INCOTEC’s Board of Directors, effective April 1, 2015. This was Read More
MicronutrientsAgrium Deals Michigan Micronutrient Facility To Cameron…
March 31, 2015
Cameron Chemicals, Inc. has announced today that it has entered into a definitive agreement with Agrium Inc. to purchase the Read More
Industry NewsH.J. Baker Creates, Fills New Pacific Northwest Sales P…
March 30, 2015
H.J. Baker announced today that Gary Bingham has joined the company’s Crop Performance Division to further deepen its sales portfolio Read More
Algal blooms
StewardshipStudy: Algae From Clogged Waterways Could Be Used As Bi…
March 30, 2015
Water-borne algal blooms from farm fertilizer runoff can destroy aquatic life and clog rivers and lakes, but scientists are reporting Read More
Young corn plants
Stewardship4R Nutrient Stewardship Summit Coming To DC
March 30, 2015
The annual 4R Nutrient Stewardship Summit will be held on May 12 in Washington DC. The summit will include a full Read More
FungicidesSyngenta Suing Willowood Over Azoxystrobin Fungicide
March 27, 2015
Syngenta announced today that it has sued agrochemical maker Willowood, LLC., for patent and copyright infringement, as well as unfair Read More
ManagementRetail Week: The Future Of Mycogen Seeds; The 4Rs At Na…
March 27, 2015
Editors Eric Sfiligoj and Matt Hopkins discuss recent trips, including a look at the future of Mycogen Seeds at Dow Read More
Eric SfiligojMonsanto Hears The WHO
March 27, 2015
Another challenge to the safety of glyphosate, and the responses from supporters and opponents, calls to mind a classic Dr. Seuss story. Read More
Industry NewsMonty’s Plant Food Expands Sales Team
March 27, 2015
Monty’s Plant Food Company, a leader in natural soil enhancement and  plant fertility products, has hired Andrew Bullock as a Read More
Crop InputsSyngenta Louisiana Plant Poised For 2015 Production
March 26, 2015
As the 2015 planting season gets underway, growers across the country will need crop protection products to combat pests and Read More
Lake Erie Nutrient Stewardship
LegislationOhio Lawmakers Finalize Phosphorus Restrictions
March 25, 2015
State lawmakers on Wednesday finalized new rules designed to curb toxic algal blooms on Lake Erie, calling the regulations a major step forward in addressing the problem. Read More
Spreaders17 Fertilizer Spreaders For 2015
March 25, 2015
Manufacturers shoot for versatility and accuracy in this year's crop of fertilizer spreaders. Read More
Industry NewsMonty’s Hires Mid-South Product Consultant
March 25, 2015
Monty's Plant Food Co. has hired Matt Woodring as a Product Consultant for portions of Central Kentucky and Tennessee.    Read More
StewardshipMapShots Integrates With DriftWatch
March 23, 2015
Growers and agricultural providers using AgStudio FARM and AgStudio PRO can now view vital information about specialty crops and apiaries through a recent integration with the DriftWatch Specialty Crop Site Registry from FieldWatch, Inc. Read More
Crop InputsWorld Health Organization Report Contradicts Scientific…
March 23, 2015
A new report from the World Health Organization has classified glyphosate with a “2A” rating as a probable carcinogen, a Read More
Eric SfiligojSeed Treatment Stays Necessary
March 20, 2015
Grower-customers looking to scale back spending in 2015 won’t consider seed treatment, say experts. Read More
HerbicidesMARCH MADNESS: Industry Rallies Around Glyphosate Safet…
March 20, 2015
A newly published report from the International Agency for Research on Cancer (IARC) classifies the herbicide glyphosate as a "2A-rated possible carcinogen" and the ag industry responds by circling the wagons. Read More