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Christina Xie

Co-partner & Editor in chief

Japan is world's 4th largest pesticide market, which is also an important market for Japanese agrochemical companies. However due to the changing market at home and abroad over recent years, Japanese companies have to walk out of the 'comfortable' domestic market and speed up the movement toward international market, as being backed up by their strong capacity on invention of new molecules, which is admired by many counterparts. AgroPages invited Mitsui Chemicals Agro, a leading agrochemical company in Japan, to share with us their planning for future development.

Why Japanese companies have such strong R&D capability?

In Japan, research organizations set a vector for research while allowing individual researchers freedom to explore new areas and concepts. Autonomy in research and a spirit of challenge, sensibility and bold new molecular design are all highly evaluated. By continuously developing new products, scientists and research organizations acquire knowhow that leads to the next level of output and constructs a virtuous cycle for research and development.

Mitsui Chemicals Agro has continuously invested in research and development with emphasis on areas including but not limited to basic research, new active ingredients research, and new formulations.

Why Japanese companies often choose to sell or licence their new molecules to other companies, like multinationals, rather than develop it further and commercialize the end products?

To expand businesses globally and independently is costly. We have to spend significant development costs and establish overseas bases.

From the economic standpoint, to maximize profitability, Mitsui Chemicals Agro looks to not only sell under our own brand but also sell and license technology to multinationals.

Please briefly introduce us about Mitsui Chemicals Agro.

Mitsui Chemicals, our parent company which traces its roots back to 1912, has an annual sales of 1,550billion yen in the fiscal year ending March 2015 and more than 135companies with 14,500 employees in 27 countries. As one of Japan’s leading chemical companies, Mitsui Chemicals contributes broadly to society by providing high-quality products and services to customers through innovations and creation of materials and products while keeping in harmony with the global environment. Mitsui Chemicals’ business portfolio includes healthcare, automotive materials, food packaging, energy, agrochemicals, and others.

Mitsui Chemicals’ global agrochemical business is operated by its100% subsidiary, Mitsui Chemicals Agro, Inc., who supplies innovative agrochemicals for crop protection and pest management. The company always stands for customer’s view, offers “Very safe”, “Highly functional”, and “Environmentally friendly” products and services, and contributes to the sustainable agriculture.

What is your company’s revenue? Where do you spend your R&D expenditure on?

Revenue of our agrochemical business is 47.2 billion yen in FY 2014. Our R&D budgets are used for research and development of new ingredients, new formulations, production technology for active ingredients and formulations, agrochemical product registration, and intellectual property costs.

What are your company’s main agrochemical products and important overseas markets? What are your key competitive advantages in your view? Our main products include dinotefuran (insecticide), etofenprox (insecticide), penthiopyrad (fungicide), hymexazol (fungicide), milbemectin (acaricide). Our sales areas cover Japan, Brazil, India, China and other ASEAN countries. We have active ingredients and formulations with excellent performance (biological activity and safety) and formulation line-ups to meet different usages.

Where is your company’s factory located? Do you already have or plan to set up factory in low-cost country, like China or India?

Our factories based in Japan. For active ingredients, it is important to achieve stable production of high quality products and implement continuous efforts to reduce costs at the same time. In this point, we believe domestic production responds best to these needs. We are, however, collaborating with excellent manufacturing subcontractors in China and India in production of raw materials, intermediates, and some active ingredients.

What are your company’s near-term and long-term strategic?

I believe self-driven growth is propelled by new product development through research and development. To accelerate overseas business growth, we need to strengthen our local functions and product portfolio to respond to local needs. In addition to organic growth, we will implement M&A and alliances as necessary.