Crop Protection Firm Talks Strategy

BASF to lean on innovation as it brings more products to market.

Published on: Sep 13, 2007

A corporate international media event is not often known for providing a lot of ground-breaking news. Yet the agriculture group at BASF offered up a few ideas that expand on where the division may be headed in the next decade.

The key driver for most any ag company are critical megatrends that are impacting the business. They include a potential 30% increase in population by 2030, rising energy needs and continued increasing demand for meat and animal products as the world economy improves.

"The demands on agriculture, the rising demand for such high-value foos as meat, fruit and vegetables, for animal feed and for biofuels cannot be met without further innovation," says Michael Heinz, president, BASF agricultural products division.

When talking with Farm Progress he hammered home the three tools that will help the company succeed in the changing marketing "innovation, innovation, innovation," he says with a smile.

Yet that's what it will take as farming changes to meet a new global situation. In fact, Heinz comments that in the past few years he's been surprised at the responsiveness of the global food market. "Farmers in Brazil are waiting to see what the U.S. harvest will be before they decide how much to plant," he notes. "That makes planning for a company difficult."

The challenge is responding to customer needs on a global basis. Take the rising use of glyphosate-tolerance crops in the United States. The switch to the technology in soybeans had a significant impact on the crop protection industry, and it actually slowed development of new chemistry in the industry. Now farmers are adding more glyphosate-tolerant corn acres - which changes the crop protection business again.

However, the rising incidence of weeds tolerant to glyphosate is also an opportunity. Heinze talks about a numbered compound - BAS 800H - that will control broadleaves in corn, soybeans and other crops. He called the product a "blockbuster" that should officially debut in the 2010 season in the United States. The new product will be a crop protection partner with other active ingredients in programs designed to short circuit weed resistance. BAS 800H will offer a new mode of action.

Fungicides a bright spot

While the crop protection sector for BASF slipped in the latest reporting period, there is one bright spot - fungicides. Headline has had significant sales and is gaining in corn market share, Heinz says. "Sales for Headline rose this summer for wheat and for corn, compensating for some lost sales during the first calendar quarter," he notes.

But the work isn't over. The company is currently involved in worldwide launches of four fungicides for cereals, soybeans and specialty crops; two herbicides for cereals and corn and one insecticide for non-crop use. Those introductions could add about $1.35 billion to the sales column.

Products in development include four new fungicides, one herbicide, one herbicide tolerance technology and two insecticides that will add a little over $1 billion in annual sales when these products are launched. Heinz acknowledges there are challenges in the market, but relationships with Monsanto for marketing Headline (and in biotech development) offer added help in the process.

He notes that the goal of the company is simple: "We want to be the preferred partner for our customers in a stiffly contested market."