Croplife Canada

1
DR. MATTHEW PHILLIPS
Partner Phillips McDougall
2
GLOBAL AGROCHEMICAL SEED MARKETS INDUSTRY
PROSPECTS
Dr. Matthew Phillips
The New Agricultural Forces
3
The Global Agrochemical and Seed Markets
Industry Prospects Presentation at CropLife
Canada Annual Meeting 3rd December 2008
Phillips McDougall Vineyard Business
Centre Saughland Pathhead Midlothian EH37 5XP Tel
01875 320611 phillipsmcdougall_at_dial.pipex.com
1
4
Market Performance 2007 (Distributor level
average exchange rates - Nominal US)
Year
Crop
Non
-
Crop
GM
Conventional
Protection
Agrochemicals
Seed
Seed
(m)

(m)

(m)

(m)
1998
28995
1653
14324
1999
28090

2172

2000
27830

2434
13799
2001
25760

2839
13365
2002
25150
4270
3314
12890
2003
26710
4445
3940
1329
0
2004
30725
4675
4700
14300
2005
31190
4905
5296
14456
2006
30425
5150
6050
14290
2007
33390
5365
7275
14435
200
7
/200
6


9.7
4.2

20.2
1.0

Seed 21,710 6.7
Agrochemicals 38,755 8.9
2
5
Market Development Since 1994
3
6
Regional Crop Protection Market Development
4
7
Agrochemical Market Development by Sector
5
8
Crop Protection Market Real Growth 1990-2007
US glyphosate price fall Improved Crop Prices
Europe, 5 set-aside LAM Recovery / Asian Rust
Excellent Ag year in the USA
GM Crop Expansion Weaker Commodity Prices
Adverse weather Energy Prices Brazilian economy
El Nino Freedom to Farm GATT
6.0
4.7
4.3
3.7
4.0
2.8
EU CAP Reform
2.2
2.1
2.0
-0.5
-0.5
0.0
0.1
-1.0
-2.0
Strong Commodity Prices Improved weather
Biofuels GM Crop Expansion Recovery in Brazil
-1.6
-1.6
-2.5
-4.0
-3.0
GM Crops Weak Crop Commodity Prices Reduced
Support LAM / Asian Economies Weak
-5.0
-6.0
-5.7
Drought in North Europe
-6.5
-6.8
-8.0
1996
1997
1998
1999
2000
2001
2002
2003
1991
1992
1993
1994
1995
2004
2005
2006
2007
1990
6
9
Crop Protection Market Real Growth v Commodity
Price
7
10
USDA Global Production/Inventory Expectations
(Tonnes million)
8
11
2007
9
12
Company Agrochemical Sales
10
13
2008
11
14
Planting 2008 Change in Area ()
12
15
Company Half Year Agrochemical Sales
13
16
Company Agrochemical H1 Sales v Final Market
Growth (m)
28.9
Dollar growth of 28.9 is equivalent to 11.9 in
Euro terms
14
17
Crop Protection Market 2008
NAFTA Increase in soybean area Increase in wheat
and sunflower areas Reduced cotton and maize
area Increase in GM area and number of GM
traits Glyphosate price improvement Strengthening
Farm Economy US Dollar remains weak Energy and
fertiliser costs Registration review US Farm Act
Europe Zero set aside Increase in cereal and
rapeseed acreages Reduction in sugarbeet
area Mild wet winter and spring in North Adoption
of Single Farm Payment Shift in Market to new EU
member states Re-registration Improving ag
economies in Ukraine and Russia
GLOBAL Increased crop prices Higher fuel and
fertiliser costs Rising glyphosate prices Higher
prices of Chinese agrochemicals Doha Round of
WTO Increased fuel and fertiliser prices
Asia Reduction in rice area in Japan Increase GM
uptake in China and India Improved weather
situation in Australia Increased investment in
grains in China Biodiesel drives palm oil demand
Latin America Increased GM uptake in
Region Higher maize areas in Argentina and
Brazil Higher soybean areas in Argentina and
Brazil Growth in Developing countries Increase in
use of sugarcane for bioethanol Energy and
fertiliser costs Higher agrochemical prices in
Brazil
Africa / Middle East Continued economic and
Political problems Infrastructure
requirements Development of specialty crop
markets for export Cotton prices
improving Developing public health
market Increase in maize and sunflower in South
Africa
15
18
Key Factors 2008
16
19
Agrochemical Market Outlook Longer Term Factors
Crop Commodity Prices / Farm Income

q

Support for Agriculture

q



Doha Round



New US Farm Act



EU Single Farm Payment



End of EU sugar support mechanism



Expansion of EU

GM Crop and Seed

q



New Input Traits

Corn Rootworm, Bollgard 2, RR Flex Cotton



Geographic Expansion

Brazil and Asia



Output Traits

Energy Costs

q



Crops for Ethanol and Biodiesel production



Fuel and Fertiliser costs

Agrochemical Prices - China

q

Re
-
Registration

q

Intellectual Property in WTO signatories

q

Increase in land use
for Biofuel crops

q

Resistance
and
regulatory issues
create
opportunities

for new products

q

Seed Treatments

q

17
20
Chinese Agrochemical Prices
18
21
Chinese Agrochemical Production
19
22
Bio Fuels
20
23
Bio Fuel Production
The US Energy Independence and Security Act of
2007 calls for an increase in biofuel production,
from 9.2 billion gallons in 2012 to 36 billion
gallons in 2022. 15 billion gallons from maize
rest from biomass / cellulosic
21
24
Theoretical Biofuel Yield per Hectare of Crop
Harvested
22
25
Usage of US Maize for Ethanol Production
Source US National Corn Growers Association /
Renewable Fuels Association
23
26
EU Biodiesel Production and OSR Area
Source European Biodiesel Board / COCERAL
24
27
GM Crops and Seed
25
28
Proportion of Crops Planted with GM Varieties 2007
Rest 10.1
NAFTA 62.0
Canada Canola 86.7 USA Soybean 96.2 Maize
80.8 Cotton 83.3 Canola 75.4
China Introduced 2000 Cotton 55.5
Argentina Introduced 1997/8 Soybean 98.7
India Introduced 2002 Cotton 76.1
Brazil Introduced 2004 Soybean 51.3
Lat Am 27.9
Total 280 million acres (12.4 over 2006)
26
29
Market Development Since 1995
27
30
GM Seed Market Value v Area
28
31
Global Commercial Seed Market 2007
Total 21,710 million
29
32
Industry Structure and RD Focus
30
33
Agrochemical Company Market Shares
2007






gt15

15
-
5

5
-
2

2.0
-
0.8

0.8
-
0.5

lt0.5

-

0.2

Bayer

BASF

MAI

Cheminova


Phyteurop

Isagro


Syngenta

Dow

Sumitomo

Chemtura

Rallis



Gowan

Monsanto

Nufarm

Sipcam

Sinon

Amvac


Albaugh


Hokko
DuPont

Arysta

SDS Biotech
Ishihara

Nippon Kayaku

FMC


UPL
Nissan



Excel
Nippon Soda

Agro Kanesho

Kumiai


Helm
Mitsui Chemicals
Nihon Nohyaku
1995






gt15

15
-
5

5
-
2

2.0
-
0.8

0.8
-
0.5

lt0.5

-

0.2


Ciba

BASF

Kumiai

Cerexagri

Mitsui Chemicals
Monsanto

Sandoz

Ishihara

Nufarm

Shionogi

DuPont

Sumitomo

Sankyo

Nippon Soda

Griffin

AgrEvo

FMC

Rohm Haas

Sipcam Oxon

UPL

Zeneca

Nihon Nohyaku

Cheminova

Atanor

Bayer

Hokko

SDS Biotech

Rallis

Rhone
-
Poulenc

MAI

Nippon Kayaku

Calliope

Dow

Nissan


Isagro

Cyanamid

Takeda

Amvac


Chemtura

Sinon



Agro
-
Kanesho



Caffaro

31
34
Moves by Major Generic Companies from 2000
Nufarm
Cheminova
MAI
United Phosphorous
2000
Proficol (Colombia)
2004
20 Cropserve (South Africa)
2000
Pytech (with Dow)
2000
Whyte (UK)
2002
FCS (Germany)
2004
AG Value (USA)
2001
Headland (UK).
2001
Agtrol (USA, Europe)
2004
Farm Saver Group (USA)
2005
Cequisa (Spain)
2001
SQI (Mexico)
2002
14 Excel (India)
2004
Farmoz (Australia)
2005
Shaw Wallace (India)
2003
Flexagri (France)
2002
Crop Care (Australia)
2004
50 of RiceCo (USA)
2005
Reposo (Argentina)
2005
CropTech (Colombia)
2004
49.9 holding Agripec (Brazil)
2005
Biomark (Hungary)
2006
Advanta seeds
2005
Ospray (Australia)
2004
Ag-seed Research (Australia)
2005
49 of Mabeno (Netherlands)
2006
100 Cropserve (South Africa)
2005
Agroquimicos Genericos (Colombia)
2007
Kerolagro (Hungary)
2007
Cerexagri
2005
Control Solutions (USA)
2006
Dovuro Seed (Australia)
2007
50 of Stahler (Germany)
2007
Icona (Argentina)
2006
Kollant (Italy)
2006
Nutrihealth (Australia)
2008
Pytech (from Dow)
Evofarms (Colombia)
2008
2006
30 stake in Alligare
2006
Agrosol (Italy)
2006
75 of Agrovita (Czech R)
2007
100 of Agripec
Agroproteccion and Agromedio through Proficol
2007
2008
AH Marks
2008
Etigra
2000
Propaquizafop
2002
Monsanto herbicides (Australia)
2001
Flutriafol
2003
Acifluorfen
2000
Tau-fluvalinate
2002
Fenoxaprop (Germany and Belgium)
2002
Phosalone
2003
Oryzalin
2000
Buprimate
2004
Phenoxy herbicides (BASF)
2002
Acrinathrin (Europe)
2004
Lenacil (UK, France, Italy)
2001
Clofentezine
2004
BASF product distribution (Australia)
2003
Methyl parathion
2004
Chloridazon (UK, France, Italy)
2001
Guazatine
2006
Asulam
2005
Imazapyr supply (BASF)
2003
Malathion
2006
Oxydemeton methyl
2001
Nordic cereal fungicides
2005
Imazamethabenz (outside Europe)
2005
Imidacloprid licence (Bayer)
2006
Trichlorfon
2002
Flurochloridone
2006
RR canola (Australia)
2006
Bensulfuron (outside Asia)
2003
Metamitron
2006
Diflufenican supply (Bayer)
2006
Acrinathrin (Global)
2007
Propanil (Dow)
2003
Linuron
2008
Cotton PGRs (DuPont)
2007
Fenbutatin oxide (DuPont)
2003
Cyfluthrin (Europe)
2007
Triphenyl tin (DuPont)
2003
Metasystox (Europe)
2003
Fenamiphos (Europe)
2005
Imidacloprid licence (Bayer)
2005
Tebuconazole licence (USA)
2007
Azinphos methyl (Bayer)
2007
Fluometuron North America (DuPont)
32
35
Company Sales and RD Expenditure 2007
33
36
Product Introductions and RD Products
Introduced 1990-2007
Currently in RD
Bayer
41
6
Syngenta
24
4
BASF
22
5
Dow
26
1
Sumitomo
18
3
DuPont
10
3
Monsanto
2
0
Other Japanese
50
18
Rest
21
7
Total
213
48
In co-development with other companies some
outward licensed products counted twice
34
37
Product Introductions and RD by Crop
Number of new Active Ingredients

Time period



1980/89

1990/1999

2000/2007

In RD

12
Herbicides
Cereals

15

12


4


Soybean

11

10

1

0


Maize

2

10

7

5

10

Rice

11

19

3


FV

2

1

0

0


Other

10

5

2

0


Total

51

57

32

12

Insecticides

FV

11

16

10

6


Rice

5

2

3

2


Cotton

9

12

4

2


Others

4

7

5

4


Total

29

37

22
14

Fungicides

FV

13

8

13
7


Cereals

14

16

8

7


Rice

9

5

6

2


Others

0

0

0

1


Total

36

29

27

17
Others


7

3

4

1

Total


1
23

126

85

44

Average annual rate of introduction

12.3

12.6

10.6

8.8

35
38
Current Status of EU Re-registration procedure
List

No. of
Products of
Accepted
Re
-
registration
Not accepted
Products

Commercial
into
pending
/ Not
Significance

Annex 1

/ resubmitted

Suppo
rted

Existing Products




1

90

90

55

0
35

2

148

114

32

0

82

30
3

389

262

85
147

4

204

11


7

4

Total

831

477

117

92

268

New Active Ingredients

81

53

7

Total Existing New a.i.s

198

145


as active ingredients for crop protection

49 removed from system and resubmitted
343
36
39
New Active Ingredient Introductions
37
40
Success of New Product Introductions
38
41
Patented v Generics
39
42
Proprietary v Off Patent Market Share - 2007
Patented 24.9
Off - Patent 75.1
Proprietary 24.9
Proprietary Off Patent 32.9
Generic 42.2
40
43
Proprietary v Off Patent Market Share
41
44
Generic Companies Share of World Market
42
45
Market Development
43
46
Market Forecast 2007 to 2012
44
47
Disclaimers
The information contained in this presentation
constitutes our best judgement at the time of
publication, but is subject to change. Phillips
McDougall do not accept any liability for any
loss, damage or any other accident arising from
the use of the information in this presentation.
The information given in this presentation has
been drawn from analyses and reviews presented in
the Phillips McDougall products AgriService,
AgriService Seed Supplement and AgreWorld. For
more information about these products please
visit www.phillipsmcdougall.com www.agreworld.com

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