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BASF stepping up agrochemical R&D in Asia
Apr. 26, 2016
In an unusual move, BASF, the world's leading chemical company, opened a tiny pop-up shop selling apples in central Tokyo in February.
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| Fresh apples and apple juice from Aomori Prefecture sell briskly at a small pop-up shop jointly set up by BASF Japan and JA Tsugaru Hirosaki in February. |
Set up in cooperation with its Japanese unit and Tsugaru Hirosaki Agricultural Cooperative Association (JA Tsugaru Hirosaki), the one-day shop in Roppongi Hills, a Tokyo landmark, sold fresh apples and apple juice from northern Aomori Prefecture. The shop proved a success, selling out its stock of 4,000 Sun Fuji and Orin apples well before closing time. The stellar quality of the apples also showcased effectiveness of the German company's agrochemical products.
Kenichi Matsuyama, managing director of JA Tsugaru Hirosaki and also an apple grower, explained some of the technology behind the unrivaled quality of premium Japanese apples. For example, BASF's crop protection product Naria is used by most apple growers in Aomori Prefecture. Naria is a fungicide used to prevent sooty blotch, which used to occur in summer but now, due to global warming, it is seen in early autumn. Apple growers also use the company's insect growth regulator, which is less harmful to the bees that help pollinate the apples.
Japan is a highly advanced agriculture market, and growers are always on the lookout for technology to improve their production of fruit, vegetables and rice, noted Kayoko Kitahara, responsible for marketing communications at BASF Japan, the local unit of the 150-year-old chemical multinational.
JA Tsugaru Hirosaki is working to boost apple exports. "With domestic demand for apples saturated, exports are an important option," said a sales manager. The organization, which began exporting its apples to Vietnam last year, has been looking to tap into other overseas markets as well.
Takeshi Ohtsu, vice president in charge of chemicals and crop protection at BASF Japan, said, "We want to provide the solutions necessary to ship apples overseas."
GROWING MARKET
The market for agrochemicals is attractive and expected to grow steadily, but it takes innovation and stamina to succeed in the highly competitive business environment, which includes such big names as Syngenta, Monsanto, DuPont, Bayer and Dow Chemical. According to industry sources, developing just one new active ingredient to control a disease or insect pest can easily cost 250 million euros ($282 million) and take 10 years and 1,000 individual trials. Products have to go through rigorous testing and approval processes, comparable to the pharmaceutical industry. Only one in perhaps 140,000 compounds makes it to the market. Having global scale is a big advantage -- the same compound that can help Japanese apple farmers can benefit tomato growers in India and potato farmers in Australia, explained Marius Rummel, in charge of communications and branding at the Crop Protection Asia-Pacific division of BASF South East Asia.
The market for agrochemicals is attractive and expected to grow steadily, but it takes innovation and stamina to succeed in the highly competitive business environment, which includes such big names as Syngenta, Monsanto, DuPont, Bayer and Dow Chemical. According to industry sources, developing just one new active ingredient to control a disease or insect pest can easily cost 250 million euros ($282 million) and take 10 years and 1,000 individual trials. Products have to go through rigorous testing and approval processes, comparable to the pharmaceutical industry. Only one in perhaps 140,000 compounds makes it to the market. Having global scale is a big advantage -- the same compound that can help Japanese apple farmers can benefit tomato growers in India and potato farmers in Australia, explained Marius Rummel, in charge of communications and branding at the Crop Protection Asia-Pacific division of BASF South East Asia.
How long can an agrochemical product stay in the market? Some remain useful for decades and others are replaced in a short time. The life cycle of the product depends on whether weeds, diseases or pests develop resistance to it. Using a single product can accelerate the resistance of weeds and pests; using multiple products can prevent this. BASF provides alternative products to create sustainable weed, pest and disease control.
BASF has more than 100 years' experience developing technology for agriculture. In 2015, the crop protection segment received 26% of its total R&D expenditure, which amounted to 514 million euros. The company currently has five global agricultural research stations, in Brazil, Spain, Germany, the Philippines and India, as well as numerous innovation sites all over the world, including Japan.
With agricultural research stations in different parts of the world, the company can conduct trials all year round, under various climate and agricultural conditions, to monitor how its products perform in the field.
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| The new agricultural research station in Pune, India, focuses on global agricultural research into herbicides, fungicides and insecticides, as well as on solutions that go beyond the usual crop protection. |
Last year, BASF opened an agricultural research station in Loni Kand, Pune, India. This new research and development facility will focus on global agricultural research on herbicides, fungicides and insecticides, as well as on solutions that go beyond conventional crop protection.
In addition to conducting research in areas of global agricultural interest, the R&D center will also investigate conditions that are unique to India -- the country's specific weeds and pests, as well as climate stresses such as drought, flooding and heat. Through its extensive research efforts, the R&D center aims to help farmers make better decisions and improve productivity during the entire cultivation cycle, thus contributing to tailor-made solutions for Indian agriculture.
FEEDING A HUNGRY PLANET
Innovation in agriculture not only benefits Japanese premium farmers, it also helps ensure that enough food is available for Asia's growing population. According to the United Nations Food and Agriculture Organization, the population of the Asia-Pacific region will expand from 2.4 billion people in 1980 to about 4.1 billion in 2020, while the amount of arable land available for farming will stay constant.
Innovation in agriculture not only benefits Japanese premium farmers, it also helps ensure that enough food is available for Asia's growing population. According to the United Nations Food and Agriculture Organization, the population of the Asia-Pacific region will expand from 2.4 billion people in 1980 to about 4.1 billion in 2020, while the amount of arable land available for farming will stay constant.
At the same time, meat consumption is increasing dramatically. For example, poultry consumption has quintupled in Indonesia since 1998. As animals consume a lot of agricultural feedstock, the need to boost production is intensified. Moreover, the number of undernourished people in the region is far greater than in any other part of the world, including Africa.
Innovation in agriculture is key to finding solutions to this productivity gap. Typical rice yields in Thailand, for example, are about 2.8 tons per hectare, while Japanese rice producers can produce around 6.5 tons.
Agrochemicals do not only increase yields, they can also drastically reduce the labor required to manage the fields. This is important in rural areas, where more and more people are leaving for the cities in search of work, making it hard for farmers to find help weeding their fields. In highly developed countries like Japan, many farmers are elderly, and are unable to spend long days in the fields plucking weeds. Specialized herbicides can help, reducing the labor required to remove weeds on 1,000 sq. meters of land from 50 hours to less than two hours.
Since overuse of agrochemicals could result in serious environmental and health problems, BASF has initiated "product stewardship," in which it supports industry-wide responsible use training and knowledge-transfer programs for growers.
NO TIME FOR REST
"We can never rest on the past achievements in our industry," said Edson Begliomini, head of R&D BASF Crop Protection, Asia Pacific. "The next generation of products will require dramatically different approaches. We have acquired an innovative company specializing in biological crop protection. We have a pipeline of new products potentially worth some 3 billion euros, and we're working hard to bring these innovations to market."
"We can never rest on the past achievements in our industry," said Edson Begliomini, head of R&D BASF Crop Protection, Asia Pacific. "The next generation of products will require dramatically different approaches. We have acquired an innovative company specializing in biological crop protection. We have a pipeline of new products potentially worth some 3 billion euros, and we're working hard to bring these innovations to market."
Emphasizing its commitment to the Asia-Pacific, the chemical giant has research stations all across the region. This includes a dedicated agriculture R&D team in Japan for the last 38 years.
"When it comes to innovation in farming, I have seen some of the best farmers from all over the Asia-Pacific, but when focus on quality and use of cutting-edge technology are concerned, Japanese farmers are hard to beat," said Nader Mahmoud, head of Marketing Crop Protection, BASF Asia Pacific. "Just one example: In Singapore some people buy Japanese grapes for as much as $20 per kilogram, much more than the usual price. Japanese growers have perfected fruit production in many ways. We learn a lot from our customers and we share the results of our research with them. It is an inspiring partnership."
Source: NIKKEI ASIAN REVIEW
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