Research: Room for Big Brands in Russian Specialty Pesticides Market
11 October 2011 By Jackie Sindrich
Managing Editor
Local suppliers and generics still control the Russian specialty pesticides industry – but the $218 million market is ripe for new product formulations, according to a new report by consulting and research firm Kline & Company.
The situation means multinational suppliers looking to establish a presence in Russia should be cautious, but they have room to penetrate the market, the report said.
“The Russian economy is growing, but also still adjusting to a free market economy devoid of government control,” Dennis Fugate, Specialty Pesticides Industry Manager with Kline, said in a statement. “In pest control, the lack of product registration in some segments has opened the doors to off-label usage, low-cost generic imports from India and China, and some imitation products that aren’t nearly as effective as the genuine product.”
The Kline research focused on markets like pest control, stored grain, rural hygiene, consumer, forestry and industrial vegetation management. The Russian government still often awards supply contracts to the same companies year after year – most prevalently in the IVM segment – primarily based on established relationships and low pricing. Despite this, Kline’s data shows the market for IVM is growing, which could open the door for more competition.
Meanwhile, the Russian government is making progress on enforcing patents to reduce counterfeit products. In some cases, generic imports fall outside product registration requirements; in others, registration is extremely difficult and costly.
“Multinational brands could have a strong advantage with products that can offer certified genuine ingredients and deliver guaranteed results,” Fugate added.
Rather than rely on the government, some companies are taking steps to incorporate identifying marks on their product packaging.
For example, Bayer CropScience offers information on its website to help customers identify genuine products and offers a hotline for consumers to report a counterfeit product or get information to verify the authenticity of a product they’ve purchased.
Notwithstanding lingering issues, the Russian market is enticing—consumers are eager to try more contemporary Western products, giving technologically innovative suppliers ample opportunity to introduce new active ingredients, Fugate said.
For more on this story, attend Kline’s free webinar at 9 a.m. ET on Wed., Oct. 12. Go to http://www.klinegroup.com/market-research/webinars/AGkline2011_fall_webinars.asp to register.
Get The Newsletter Today!
