Crop Protection Forecasts Mixed
Syngenta Hits Record ’08 Sales
Syngenta reported record sales and earnings growth for 2008 worldwide. Overall sales were $11.6 billion, up 21 percent, helped by a 22 percent increase in crop protection sales and a 16 percent increase in seed sales. Crop protection sales totaled $9.2 billion and seed sales rached $2.4 billion for the year.
For the first time, fungicides were Syngenta’s largest product line, led by AMISTAR for which sales reached $1 billion worldwide. Syngenta’s global crop protection lineup gained market share for the fourth straight year; its Touchdown herbicide was one one of those gaining market share. On the seed side, the company’s proprietary Agrisure 3000 GT triple-stack seed was successfully launched in the U.S. and its first corn pipeline trait, Agrisure Viptera, received EPA approval in December.
The manufacturer expects their seed treatments, including the new Avicta on corn, to help drive more growth in 2009. Syngenta has a strategic alliance with Rohm & Haas to develop and commercialize INVINSA technology as a unique product for crop stress protection in field crops, and will also prepare regulatory studies jointly with DuPont for DuPont’s Cyazypyr, a new broadspectrum insecticide with significant potential for combination with Syngenta’s own products. A pipeline of corn and soybean traits is highly anticipated by the company.
“In 2008, buoyant agricultural markets demonstrated the central role of technology in an ongoing drive to raise yields. Syngenta capitalized on the favorable environment, reinforcing our global leadership position,” says CEO Mike Mack. “In 2009, early signs for the northern hemisphere season are encouraging and we are well placed again to outperform the overall market, enabling us to continue targeting growth in earnings per share in 2009 despite economic uncertainty.”
DuPont Lowers 2009 Forecast; Ag Still Strong
U.S.-based chemical maker DuPont Co. reported a $629 million loss for the fourth-quarter 2008. A $380 million restructuring program accounted for most of DuPont’s loss for the quarter, compared with a profit of $545 million a year before. Full-year 2008 earnings were $2 billion, down from $2.9 billion in 2007. Fourth quarter net sales fell 17 percent to $5.8 billion from $6.98 billion, as the company reported a 20 percent decline in volume. Higher prices in all regions and across all business segments were more than offset by volume declines and negative currency effects, reports the Associated Press.
DuPont will make further cuts to its contractor work force, which already involved releasing 4,000 contractors by the end of 2008; it planned to carve a total of 8,000 contractors from its rolls by the end of January. The company previously cut 2,500 jobs, and will be eliminating merit salary increases this year and cutting work schedules for some employees, according to CEO Ellen Kullman "We’re attacking costs and expenses aggressively," Kullman said, adding that the benefits of the restructuring will be seen in the second half of the year.
While DuPont expects weak market conditions to continue throughout the year, Kullman said she is confident that DuPont will emerge from the current economic turmoil "stronger, leaner and more agile, and better poised for growth." The company said it expects very weak global demand for first quarter of 2009 in most key markets — excluding agriculture, which Kullman described as "the bright spot on the first-quarter volume horizon."
Jim Borel, group vice president in charge of DuPont’s agricultural businesses, said he expects continued volume growth in North American seed markets, and DuPont expects to continue "an appropriate level of spending" for high-growth, high-margin businesses, which includes seed products.
Ag Only Bright Spot For Dow
Dow AgroSciences set a fourth-quarter sales record of $885 million, 2 percent higher than the same quarter last year. Dow AgroSciences reported that its full-year sales grew 20 percent to $4.5 billion, reflecting an 8 percent increase in volume and a 12 percent increase in price.
This marked the 10th consecutive quarter that Dow AgroSciences has recorded a sales record vs. the comparative period of the prior year. Volume declined 4 percent, but price rose 6 percent. Price was up in all geographic areas except Asia Pacific, while both price and volume rose in North America.
Seed sales increased vs. the same quarter last year, led by U.S. corn sales and sunflower sales in Latin America. Sales of agricultural chemicals declined due to product shortages and lack of available credit for growers in some regions.
Its agriculture division was a bright spot for the company. The economic recession dropped demand for plastic and industrial products, resulting in Dow Chemical Co.’s first net loss in six years, according to Bloomberg.com. The loss of US $1.55 billion contrasts with a net income of $472 million a year earlier for the Michigan-based chemical company.
CEO Andrew Liveris announced that Dow will be closing factories and cutting jobs to cope with a global recession, which he predicts could last all year. In December, Dow said it will eliminate about 5,000 jobs, or 11 percent of the global workforce, permanently closing 20 facilities and idling 180 plants. Dow’s contractor workforce is being cut by 6,000 globally. Dow ran its plants at 44 percent capacity in December – its lowest ever – and at 64 percent for the total fourth quarter.