According to Kline’s soon to be published Global Professional Pest Management Markets for Pesticides: Market Analysis and Opportunities, total non-agricultural pest control service sales in China in 2012 alone are estimated at CNY 3 billion to CNY 4 billion (USD  476 million to USD 635 million), with pesticides sales expected to grow annually by 6.7%.

With a view to improving product quality, public health, and environmental safety, China’s Pesticide Registration Law, overseen by China’s Institute for the Control of Agrochemicals, Ministry of Agriculture (ICAMA) is continuously imposing stricter standards with upgraded implementations expected in the second quarter of 2013. The impending directives with potentially the most impact concern the withdrawal of temporary pesticide registration certificates, and the mandating of formal pesticide registration certificates, which requires up to CNY 1 million (USD 158,647) per new product (a five-fold cost increase) and a certification period of up to two years.

The effect of this will lead to market consolidations or the shutting down of smaller pesticide control operators (PCO) with larger, better resourced players gaining more market share through better product development ability and economies of scale.

Presently, the vast majority of PCO firms in China are small local players with annual service revenues below CNY 300,000 (USD 47,594). Most of these firms are run by ex-employees of larger pest control operators, or from the Ministry of Health’s Office of National Patriotic Health Campaign Committee’s (PHCC) pest control teams. These small PCOs tend to service only one city, and serve smaller clients.

Larger PCOs are either foreign-owned such as market leader Ecolab, or Rentokil Initial, or local players, such as Shenzhen Jieke and MarsBro, who draw on strong government relationships.

Within the Chinese PCO market there is a trend towards non-chemical control alternatives and fewer sprays. Glue boards are used for cockroach and rodent control, especially in food processing areas due to food safety concerns. In populated areas, PCOs tend to employ bait stations to prevent non-target animals from mistakenly ingesting rodenticides. Similarly gel or granule products use is increasing for both their more environmentally-friendly aspect and their comparative efficiency given that the pesticide application area tends to be much smaller than liquid sprays, while achieving the same effect. More conventionally, pyrethroids, which are widely-used in the PCO market, continue to dominate the professional pest control market, due to their high effectiveness and low toxicity.

China is growing inwards and insisting upon higher standards. Needs are to be met and this vast market is cracking open. Assay opportunities and formulate diligent business-plans with Kline’s forthcoming Global Professional Pest Management Markets for Pesticides: Market Analysis and Opportunities.

A warm winter and an early planting season favored the use of herbicides and insecticides as growers planted record-setting acres of corn and soybeans. Fungicide applications were reduced in those areas of the country that were severely affected by the drought.  Mid-year reports of the drought had many believe that the crop protection industry would make minor gains; however, growers, retailers, and manufacturers were able to adapt, despite deficits of corn and soybean production of 13% and 4%, respectively, over 2011, (according to the USDA).

In addition, the demand for pre-emergent herbicides continued to increase amongst concerns for glyphosate-resistant weed problems.  As a result, phenoxy herbicide sales experienced a healthy increase during the year.  Grower awareness of corn rootworm resistance in Bacillus thuringiensis (Bt) traits in corn continued to result in a renewed recognition of soil-based insecticides. Seed treatment sales further contributed to increased sales within the crop markets with a number of generic companies beginning to target this segment.

One of the noteworthy events of the year was the interest generated among manufacturers within the biologicals market.  The biologicals market includes: the areas of pest management solutions, inoculants, nematodes, micronutrients, and colorants and coatings. Other notable highlights during 2012 included Bayer CropScience’s purchase of AgraQuest, and BASF’s acquisition of Becker Underwood.  Another important outcome during the year was that several manufactures began work on the development of biological product lines, in anticipation of future growth in this field.

Kline’s Crop Protection Manufactures Report  covers the 2012 marketing year for the U.S. crop protection industry. The study provides an extensive review of sales and trends affecting the crop protection chemical industry, along with extensive profiles, including individual product sales of the fifteen leading companies that supply over 95% of total industry sales.

– Written by Joe Prochaska

While generic manufacturers’ sales increased in 2012, their market share fell from 31.7% to 30.9% of the total market. Generic manufacturers maintained their value proposition during the year, but not without challenges. Demand for glyphosate rose substantially as planted acres increased and growers began using higher use rates for hard to control weeds. Generic companies sourcing glyphosate from China quickly ran out of supply as Chinese factories faced supplying a global market with an increase in demand along with more strict environmental regulations. This shortage of generic glyphosate encouraged a shift to branded products.

Major research-based manufacturers experienced an excellent year as they continue to combine crop protection products and seed trait package offerings to incentivize the distribution channel. The research-based companies continue to be very aggressive on pricing and rebates to gain share back from the generic companies. These companies have strategic plans in place to aggressively defend their off-patent product positions.

However, the leading generic suppliers  are bringing new products to the marketplace while the specialty generic companies, under $100 million in annual sales, continue to provide products containing straight active ingredients at a lower price. Grower awareness of corn rootworm resistance increased during the year, and the benefits of soil-based insecticides gained renewed recognition, benefiting generic companies with a market position.

Kline’s Generic Manufacturers Report covers the 2012 marketing year for generic manufacturers in the U.S. crop protection industry. The study provides reliable company and chemical product group sales information along with a strategic assessment of the entire market and the impact of trends shaping the industry.

– Written by Joe Prochaska

Technology and licensing fees of genetically engineered seed traits have further significantly increased the cost of seed, consequently growers are much motivated to reduce seeding rates and encourage greater efficiency to reduce costs. To this end improved seed treatments and the use of overtreatments – often combining fungicides, insecticides and nematicides – are allowing growers to protect seedlings, minimize plant losses and ensure adequate plant stand to maximize yields.

Since the largest seed companies are also crop protection companies, this has allowed pragmatic and effective integration of the two technologies – seed and crop protection products – that can ultimately simplify procedures for farmers by offering a coordinated and all-inclusive approach to enhance crop yield and minimize seed/seedling losses.

Kline’s research has also revealed the growing significance of application equipment. Seed loading of multiple products at very low rates and with great accuracy has made it near impossible for farmers to treat their seed accordingly. However seed companies and specialist treaters can afford to invest in equipment to treat large volumes with the accuracy and safety required, resulting in major growth in equipment for regional/local retailers and seed dealers/distributors so they can apply the new more demanding products and so meet particular local needs.

Kline’s Seed Treatment Global Series: Market Analysis and Opportunities covers the 2011 marketing year and offers a comprehensive analysis designed to provide crop protection suppliers with the latest information on the size, structure, and outlook for the seed treatment pesticide market in major country/crop markets across the globe.

The 2011 year began with yet another year of excess inventory at the distributor level; however, the industry began to rebound as high corn and cotton prices resulted in increased planted acres. Major crop acres planted rose by almost 7 million acres sowing a recovery in crop protection sales after two consecutive years of market declines. Despite a positive year, distributors report they are focusing on their strategic business plans more than ever, and growth strategies were the recurring theme among interviews during the development of the report. These growth strategies include: territory expansion, pursuit of private labels, focus on value-added products (biopesticides, surfactants, inoculants, etc), grower marketing programs, and making strategic choices among crop protection suppliers.

The leading growth strategy over the past five years for ag distributors has been acquisitions and restructuring. The consolidation of the distribution sector has followed the pattern of chemical manufacturers, resulting in fewer, larger national distributors interspersed by smaller, niche participants. This industry change has resulted in the distributor sector diverging toward two industry business models: logistics-driven and service-driven. Logistics-driven refers to the lowest cost and most efficient delivery of chemicals while service-driven relies on chemicals being part of a value-added service program which includes creation of value to the customer through various tools supplied by the ag retailer. These tools may include services for precision ag, crop nutrition, value-added offerings, crop genetics, and sustainability practices.

With biotech seed traits driving industry growth and impacting crop protection chemicals, the leading ag distributors (including ag retailers) have been spending more time assessing the most reliable and profitable options in developing strategies that provide a coherent product portfolio position. The result has been a level of integration among the partnering of manufacturers and distributors that replaces any previous experience. “Crop protection is now defined by a complex of formulated chemicals, seed treatment and genetics, with the crop protection value contained in seed approaching 45% of the market,” states Joe Prochaska, Kline’s Specialty Pesticides practice Project Manager. This new definition of crop protection will certainly create opportunities arising within an industry defined by significant year-to-year market swings to distributors and manufacturers who are willing to exploit them.

The U.S. crop protection chemical market is expected to maintain strong growth with the 2012 year ahead. A continued demand for corn and corn-derived ethanol from countries such as China and India is expected to keep corn commodities high, fueling growth within the industry. As one distributor mentioned, “the industry is developing and producing innovative active ingredients and formulations for the improvement of crop health and yields and we are experiencing exciting times within our industry.”

This is great recognition of our positioning and offerings both on the KMC and KMR sides of our business, with many people contributing to our success. Well done, everyone! We’re now going to figure out how to leverage this to maximize our exposure in the industry.

]]> http://blogs.klinegroup.com/2011/11/04/kline-wins-agrow-award-for-best-supporting-role/feed/ 0 Kline Blogs agrow http://blogs.klinegroup.com/2011/09/23/webinar-specialty-pesticides-educational-series/ http://blogs.klinegroup.com/2011/09/23/webinar-specialty-pesticides-educational-series/#comments Fri, 23 Sep 2011 10:50:26 +0000 Kline Blogs http://blogs.klinegroup.com/?p=1534 ]]> As we have recently completed some of our most popular reports, we felt it would be a good time for us to share a few of our findings with you.

Starting Wednesday October 12, 9:00 EDT we will be sharing valuable crop protection data and insights from our latest reports.

The 9:00 am  Fly Control Pesticides in Production Animal Health 2011: U.S. Market Analysis will cover key findings from analysis of the U.S. market for fly control pesticides in poultry, pork, beef, egg, and dairy processing. The analysis is looking at key trends, developments, changes, challenges, and business opportunities, and addressing such issues as sales and volumes of insecticides consumed by brand, active ingredient, and supplier, non-chemical control practices, and new products/technology.
(runs 20 minutes, includes Q&A)

The 9:20 am  Rangeland and Pastureland Insecticides 2011: U.S. Market Analysis seminar will be examining some key insights from the U.S. range and pasture insecticide management market, which addressed such issues as the size and segmentation of the market for insecticides by brand, region, and insect treated, acre treatments by brand, active ingredient usage, supplier summary totals by brand, or separate totals for insecticides by brand and insect treated.
(runs 20 minutes, includes Q&A)

The 9:40 am  Specialty Pesticides Russia 2011 seminar will present key findings from a comprehensive analysis of the specialty pesticide market in Russia, which focused on brand sales by market segment and product type. The seminar will also include highlights of key market trends and developments and examine the near-term outlook for these markets.
(runs 20 minutes, includes Q&A)

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