Crop Protection Industry Revenues Likely to Increase, FCI Study Finds

Survey results show that the industry is thriving.

Survey results show that the industry is thriving.

The crop protection industry is stable, and good things are on the horizon. Such were the results of the 2014 FCI State of the Industry survey.

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Budget expectations are on-target and showing growth. Revenues are higher overall and predicted to remain high. In 2014, the industry is not feeling the negative impact of the global economy as acutely as it has in the past.

The majority (81%) of all respondents either met or exceeded their budget in the first quarter of 2014, a huge improvement over 2013 and the greatest annual increase in favorable budget status since the survey began in 2009.

“What you can also see is that business is stable for all of the chemical companies, manufacturers especially, but their agrochemicals units are growing very steadily,” said Kleffmann Group Regional Manager and agribusiness trend analyst Tasleem Ahmed in an interview at the FCI Trade Summit in Tanzania.

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2014 shows a 14% increase over last year in the number of companies reporting either meeting or exceeding budget. Until 2013 when the industry temporarily slumped, the average annual increase was only approximately 2%.

The dramatic increase is a bold indicator of good industry health, and upon closer examination of historic budget trends, the picture still remains rosy. Small improvements over previous years add up to paint a portrait of an industry that is taking steps to build muscle and is poised to continue robust expansion year over year.

Companies that reported exceeding budget climbed from 2013 as well. In 2014, a quarter of respondents exceeded their budget, slightly less than in some previous survey years but still positive. The proportion of companies that are just meeting budget is 56%, a figure that is higher than any other previous year, lending stability and strength to the industry’s trajectory toward growth. Furthermore, only 19% of respondents reported failing to meet budget expectations. That is 14% fewer than in 2013 and the smallest percentage of all years since the survey began.

Revenue predictions for 2014 show that the industry is optimistic and continuing on the positive trend that had been running strong since 2010. In 2009, half of all survey respondents predicted that their revenues would increase from the previous year. In 2010 approximately 80% did, and that leap forward was sustained through 2011. But in 2012, there were about 10% fewer people who were as optimistic. That percentage increased again in 2013, and things are evening out at the 79% optimism mark again currently.

When we look at the proportion of respondents who believe their 2014 revenues will be either the same or higher, we can see even more clearly the conviction with which they are forging ahead into the future. Fully 91% of respondents expect to meet or exceed revenues from last year. And in 2014, more people are predicting more growth than they have in the recent past. About 30% said they expected their revenues to be at least 11% higher than last year. That is 7% more than in 2013. Respondents were much less optimistic in 2012, but in 2010 and 2011, even more companies expected to outperform the previous year.

FCI administered the State of the Industry survey to crop protection professionals in 46 countries in May 2014 and awarded an iPad and certificates to select participants.

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