Consolidation Of The Majors

By Scott C. Lucas|9 December 2008

The crop protection industry has long been driven by innovation and discovery.

However, with numerous pressures mounting against ag-chem companies such as the advent of biotechnology, increased international regulatory standards (and costs), competition from generic product manufacturers, and the sky-high investment required to bring new molecules to market, the discovery business has seen the level of critical mass required for survival grow larger and larger. Names that dominated the ag-chem market in the past 20 years such as Ciba Geigy, ICI, Shell, Rhône-Poulenc, Hoechst, Schering, Eli Lilly, American Cyanamid, Stauffer, Zeneca, and Aventis all have been swept together by the wave of consolidation that has left us today with six major crop protection superpowers: BASF, Bayer CropScience, Dow Agrosciences, DuPont Crop Protection, Monsanto, and Syngenta.

But the consolidation efforts of the majors has not been limited to ag-chem businesses. Sensing the importance of biotechnology in the future of agriculture, each of the “Big 6” has made moves to acquire seed and biotech companies to increase its influence in all areas of crop protection.

Moves like those have some in the industry worried. With fewer players in the discovery business and the high cost of developing novel chemistries, a slow-down in new chemical introductions has already been felt, and as the Big 6 focus more attention on traits, conventional chemical discovery could grind down even more.

On the whole, the Big 6 have been very public about their commitment to conventional chemistries, especially those with better environmental profiles and ultra-specific targets.

Still, the question of a discovery slowdown remains in the industry, as does a bigger question: Has consolidation stopped? Or is the Big 6 not far from becoming the Big 5?