BASF has been making and selling fungicides since 1958. The company screens about 100,000 compounds in fungicides per year, in four categories: Strobilurins Complex II, SDHI Inhibitors Complex II, Multisite and Triazole fungicides.
"It's how you build a program and integrate these different modes of action that makes a long term, sustainable program for farmers to control diseases," says Heldt.
The Functional Crop Care division is a new approach for BASF and one where the company sees a bright future. "It's a new investment and the start of an exciting journey down the road," says Heldt. And it's a major reason the company is increasing its 2020 sales target to $11 billion.
"The increased target is driven by four factors: the commitment to research and the pipeline value, which has been increased to $1.7 billion in sales from expected new product launches; two, investment in capacity and plants; three, new growth in the Functional Crop Care unit; and last, continued investment in emerging markets in Eastern Europe, Asia, Latin America and Africa," explains Heldt.
He believes BASF's competition is not from rivals such as Syngenta or Bayer; it's from the untreated acre.
"If you look at the plant health market, this year we may have 50 million U.S. acres treated with any fungicide," he says. "The opportunity is to get at another 130 million acres by convincing farmers that fungicide will enhance yield. That opportunity is very, very big."
Room for growth
Heldt sees the global Ag chem market growing 2 to 3 percent annually over the next 10 years, with the highest growth in emerging nations. "Five years ago 35% of sales came from Eastern Europe, Africa, Latin America and Asia," he says. "By 2016 we believe 50% of global sales will come from those emerging markets."
To make that happen BASF is providing tools to reduce its risk in those regions. It provides financial assistance in Russia and Ukraine, where credit is difficult. In Brazil or Argentina it works with companies like Cargill and ADM to provide a bartering tool to offset currency issues.
"These are all tools to manage volatility," Heldt says. "It's an insurance we offer to customers who are willing to commit to spraying our products."