Imports: Coming To America
19 December 2008 Out of an annual worldwide production of US $30 billion in crop protection chemicals — US $18 billion of which is traded on the international market — around US $584 million of these products are imported into the US. According to the Department of Commerce US Census Bureau, Foreign Trade Statistics, the majority of imported insecticides, fungicides, herbicides, and other products are manufactured in India or China.
The US market is vast, but breaking into it presents many obstacles. Alan Katz, president of regulatory consulting company toXcel LLC, offers a guided tour through the US registration process.
Most overseas manufacturers import active ingredients or technical materials, Katz explains, rather than formulations or finished products. A company that wants to register the active ingredient must have it approved at both Federal and then State levels — which, as Katz says, “is always more time consuming and costly than anticipated.” Not taking into consideration the time to collect, format, and submit the information, the review by the regulatory agency can take three to twelve months — even for products considered “substantially similar,” that require only submission of the product chemistry data. Per the US Environmental Protection Agency’s Federal Insecticide Fungicide and Rodenticide Act (FIFRA), each active ingredient, formulated product, etc., must be approved and registered independently, Katz advises.
Regulatory consultants such as toXcel, which is located in Gainesville, Virginia, can expedite the process, as well as review the application package, provide guidance, and help the registrant save money on registration costs, which can range from US $75,000 to more than $200 million. Federal and State costs will vary depending on the State; on studies required to test chemistry, toxicity, and ecotoxicity implications; the environmental and health impact of accidental exposure or spills; chemical type and proposed use; etc.
According to Katz, the “least costly method for pesticide manufacturers to enter the US market is to sell to companies … that hold their own product registrations, but are looking for alternate suppliers of active ingredients.” Such importers are only required to produce product chemistry data in agreement with Good Laboratory Practices (GLP).
On the other hand, the most costly registration is for a new active ingredient to be used on food crops. In all cases, there are savings to be had. Not every test or data requirement from EPA or the State is necessary for all chemicals. A knowledgeable regulatory consulting company can advise which tests and requirements can be waived, saving from hundreds to millions of dollars in unnecessary costs.
The plethora of different regulations between States, as well as between different US customs laws, and hazardous transportation and disposal laws, can create confusion for importers. However, Katz states that the biggest obstacle for US chemical importers is “a lack of sufficient GLP-compliant or guideline-compliant data to support the government approval process.” It is vital that the crop protection manufacturer has packaged the correct, required documentation for submission to avoid extended delays and additional costs.
Once an importer’s product has been approved, it must compete in the heavily-saturated US market. The internet has become a source for bulk sales of discount generics; however, many companies commercialize their product through advertising in print, electronically, and in person. Contacts can be made through industry trade associations and networking; marketing opportunities are often found simply through word of mouth, when one connects with others in the industry currently involved in the US market, Alan Katz states that “personal interaction at all levels can be productive.”
Katz also reveals that consulting firms can often identify formulators that could be potential distributors or even ingredients customers; after all, US formulators must use FIFRA registered active ingredients or submit data requirements for both their formulation and all the active ingredients used in it. Some clients may be manufacturers or distributors of formulations, looking for new sources of active ingredients; other clients may be importing active and inert ingredients for formulations and searching for a US distributor. In these cases, Katz says, “Consultants can act discreetly to offer introductions between companies that may eventually lead to new supply agreements.”
The US is a desireable market for input providers, and can bring great success provided the company does its research and takes advantage of the resources available to help it.
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