Bayer CropScience is committing EUR 5 billion (approximately $6.5 billion) for its R&D operations to develop new solutions in seeds, chemical and biological crop protection. The company anticipates that products launched during this period will have a combined peak sales potential of at least EUR 4 billion ($5.1 billion).
The company also plans to invest in new production capacities and seed processing facilities to meet rising global demand for agricultural raw materials, by allocating a total of EUR 2 billion ($2.5 billion) for such investments within the same time frame.
"Bayer CropScience aims to lead the way in sustainable crop solutions, and we are heavily investing in R&D, as well as production capacities, to respond to global demand for differentiated crop solutions," notes Peterson.
In August, Bayer CropScience completed its close to $500 million acquisition of US biological pest control company AgraQuest, securing its foothold in the biologics market, which is expected to triple to almost $4 billion by 2020.
Four pillar strategy
Peterson says the company has made strong progress since it launched its new four pillar strategy in 2011. The four pillar strategy is based on: 1) Rejuvenating its core crop protection business; 2) Reinventing customer-centricity along the entire value chain; 3) Refocusing innovation, and 4) Extending the company's seeds business.
"Our four pillar strategy is working and we will maintain that growth," she says.
"Our goal is to develop integrated crop solutions that provide farmers with a full package of products and services for the entire growing cycle – from planting to helping their harvest arrive fresh and in perfect shape on the retail shelves," adds Dr. C. David Nicholson, Bayer CropScience's Head of Research & Development.
New products lift sales potential
"The seed and crop protection solutions we develop are geared towards helping growers address some of the most critical issues they face," says Peterson. "We believe the products in our pipeline of new seed, small molecules and biological crop solutions hold significant promise in the market, and expect the peak sales potential for our products being launched from 2011 to 2016 to be at least EUR 4 billion ($5.1 billion)," Peterson acknowledges.
Peterson emphasizes the company's seeds business – formerly referred to as BioScience – is set to continue its rapid pace of growth. "We expect Seeds to double to around 20% its contribution to the company's overall sales by 2016," she notes. The unit recorded a 21% leap in sales in the first half of this year. Growth is expected in oil crops, vegetables and wheat.
The Bayer CEO also notes the company has worked hard to change the way it approaches the marketplace. "We work in 120 countries but have figured out a way to work closely on the local level, sharing practices from around the world."
In summary, Peterson says, "We feel good about the marketplace, the business, our strategy and the future. We have the right focus."
She also notes the company will continue collaboration with public and private sectors.
Source: Bayer CropScience press conference, Monheim, Germany