Maximizing Market Share
19 December 2008 | Leading Generics Companies Agrochemical Sales 2007 (Sales US$ million) |
|||||
|---|---|---|---|---|---|
| Rank/Company | 2006 | 2007 | Growth ’07 Over ’06 | ||
| 1. Makhteshim | 1,581 | 1,895 | 19.9% | ||
| 2. Nufarm | 1,245 | 1,819 | 46.1% | ||
| 3. Cheminova | 604 | 721 | 19.4% | ||
|
4. UPL |
600* | 762 | 27.0% | ||
| 5. Sipcam | 351 | 356 | 1.4% | ||
| 6. Gowan | 240 | 279 | 16.3% | ||
| 7. AMVAC | 194 | 217 | 11.9% | ||
| 8. Atanor | 170 | 192 | 12.9% | ||
| 9. Rotam | 160 | 185 | 15.6% | ||
| 10. Rallis | 143 | 171 | 19.6% | ||
|
*UPL includes full consolidation of Cerexagri in 2006. Source: Phillips McDougall AgriService. |
|||||
Every year, post-patent manufacturers comprise more of total crop protection sales worldwide, challenging the industry. Nufarm Managing Director Doug Rathbone says: “As we see an increasing proportion of off-patent sales, companies with strong regulatory and marketing skills, a broad geographic platform, and strength in an expanding range of key products will play an increasingly important role in delivering quality crop protection solutions to farmers around the world.”
Acquistion Enhancements
Most of the increase in post-patent ag chemicals’ share of the agrochemical market came from generics companies, who made up 27.4% of industry sales in 2006, and 30.3% last year. During this same period of time, many generics companies have benefitted from acquisitions, such as United Phosphorus, which consolidated Cerexagri in 2006 and purchased Icona in 2007 — as well as acquiring several chemicals from DuPont, Dow, BASF, and Bayer, helping the company’s ’07 revenue to go up by US $153 million over 2006.
Australian manufacturer Nufarm has acquired UK-based AH Marks Holdings Limited, US crop protection product company Etigra LLC, and a range of cotton plant growth regulator products from DuPont. Nufarm’s gain of 100% control of Agripec (Brazil) last year added $60 million — Agripec’s sales in June and July 2007. Rathbone says the company is ideally positioned to take advantage of the structural changes taking place in the global crop protection industry. “Nufarm will continue to invest in strong brands, differentiated and innovative product formulations, and exceptional customer service. It’s these assets that will determine success in an industry where proprietary chemistry positions are less relevant.”
Denmark’s Cheminova — which entered into an agreement with Bayer CropScience for the acquisition of the global rights to the insecticide acrinathrin at the end of 2006 — finalized an agreement with Dow AgroSciences in March this year regarding Cheminova’s purchase of the full ownership of Pytech Chemicals GmbH. Cheminova also made a full acquisition of CropTech (Columbia) in October 2008, after having acquired controlling interest of the company in 2005. While Cheminova says the acquisition of CropTech’s remaining shares will not have any significant impact on Cheminova’s sales results in 2008, it’s clear that Cheminova will benefit in the future.
Why Generics?
| Market Breakdown 2007 | ||
|---|---|---|
| Sector | Share % | |
| Proprietary | 24.9% | |
| Proprietary Off-Patent | 32.9% | |
| Generic | 42.2% | |
The most practical reason to switch to generic products is price. Some chemical formulations are identical to the branded product, as agrochemical companies may license their technology and allow more than one company to produce the same active ingredient. With input costs rising sky-high this past year, growers need to make cuts where they can, and the use of off-patent products has helped them to maintain their operations.
It can also affect market prices: In 2007, Canadian farmers are reported to have saved US $150 million by using generic glyphosate. In response, the Canadian market has lowered brand name prices.
Get The Newsletter Today!
