Despite a potential soft spot coming in 2014, global chemistry leader BASF is making optimistic plans for future ag growth, increasing its 2020 goal from $8 billion to nearly $11 billion in sales from its Crop Protection.
Markus Heldt, President of the division, says the company expects that growth to come from internal strategic growth without mergers and acquisitions. The company is channeling $2.4 billion in to production and formulation capacity from now through 2017. That's nearly double the investment amounts from 2007 to 2011, he adds.
The additional funding is going toward capacity expansions for F500, Xemium and dicamba, new formulation plants in Asia, and research and development expansion in India and United States.
"With record farm income, and relatively strong farm income in last year's drought catastrophe, liquidity is high and the need for innovation is high," Heldt told Farm Futures. "The speed of adoption is very high for new product launches. The opportunity, even with existing chemistry, is huge."
BASF sees the continued adoption of fungicides, along with a "herbicide renaissance" driven by glyphosate resistance, as reasons for optimism. It recently launched a holistic-style Functional Crop Care unit to help farmers boost plant health and yields through seed, soil and crop care strategies.
"When I was in the U.S. seven years ago we were just starting to develop the plant health market and there were a lot of questions on how farmers would use products," Heldt says. "Now you have a core body of high tech farmers who see the benefits of fungicides in corn and beans, and they are ready to invest further in fungicides for those crops. That makes us optimistic and positive."
Heldt says the herbicide market is going through "significant, rapid change, driven by weed resistance," initially in North America but growing in other parts of the globe. "It's a reality of Mother Nature that it strikes back, in the form of resistance in many forms," he adds. The company ramped up herbicide research five years ago when it became apparent "weed resistance would change the market and the need for new tools for farmers."
BASF's product line includes six modes of action: growth regulators, pigment inhibitors (HPPD), seedling shoot inhibitors (VLCFA), amino acid synthesis inhibitors, cell membrane disruptors (PPO) and microtuble inhibitors.