Shandong Luba Chemical Co.,Ltd
Beijing Multigrass Formulation Co., Ltd.

The Increasing Demand for R&D Activities to Boost High-end Agrochemical CMO Industryqrcode

Oct. 25, 2017

Favorites Print Oct. 25, 2017
url
谢雪凤-AgroPages Christina Xie
Christina Xie

Chief editor of AgroPages. Email: christina@agropages.com

Follow

The Increasing Demand for R&D Activities to Boost High-end Agrochemical CMO Industry

Owing to the downturn in the global agrochemical industry in the previous two years, the industry has seen many large consolidation events. The six global agrochemical giants were also affected by this trend and experienced mergers and acquisitions. ChemChina completed its acquisition of Syngenta; DuPont and Dow Chemical completed their merger at the end of August this year; and Bayer's acquisition of Monsanto is in progress. 
 
The consolidation of these giants will not only have a significant impact on the pattern of the global agrochemical industry, but also hasten innovation in the industry in the future to a higher level. 
 
According to Deloitte, one of the world's largest management consulting firms, the number of new molecules released annually on the market has been declining for decades, while the complexity of new molecules is on the rise. For the chemical industry, innovation nowadays has gone beyond a simple product innovation, and transformed into diversified innovation with combined technology and services to meet the complex and changing customer needs with comprehensive and integrated solutions. 
 
To control the time and monetary costs of the development and promotion of new compounds and maximize profits, large enterprises prefer to choose partners with the ability to provide high-end Contract Research and Manufacture Services (CRAMS). Based on the current situation of growing mergers and acquisitions (M&As) in the industry, CRAMS enterprises will usher in a new round of development. 
 
In light of above situation, AgroPages interviewed two of the world's leading contract manufacturing organization (CMO) enterprises on the recent industry integration and the development of CMO enterprises in the future.

Saltigo - Base on High-end Products and Focus on the Future
 

Dr. Torsten Derr
Head of Saltigo GmbH
1. How do you view the current market situation of global pesticide CMO industry? What is your prediction for the trends in the future? 
 
As we all know, the agro market is cyclical. We had fantastic weather conditions and low insect pressure, resulting in high yields in the last harvest season. As a consequence, grain prices are low, leading to low farm profitability. As soon as grain prices recover, higher farm profitability will result in higher pesticide use. The whole pesticide CMO industry will benefit from this situation. 
 
We also observe the consolidation activities in the market. Most mergers are justified by levering cost synergies. The agro majors’ hunt for lower costs might result in more outsourcing in the coming years. 

2. What should pesticide company keep in mind when they choose a contract manufacturing partner? 
 
Modern pesticides are very complex. We have seen pesticides with more than 20 chemical steps. This requires a very comprehensive technology portfolio at the contract manufacturer. Extensive R&D and engineering resources also play a significant role in bringing these new and complex molecules to the market. Time is money!
 
3. Can you explain how your company’s advantages are different from that of other CMOs? 
 
 

Saltigo, a subsidiary of German company LANXESS, is dedicated to custom synthesis and manufacturing services for small molecules. We serve globally the needs of customers in the Pharma, Agro, and Specialty Chemical industries. Our business consists of over 85% Custom Manufacturing Services; less than 15 % are multi customer products in niche areas. 
 
Saltigo is committed to supporting its customers throughout the entire life cycle of their products - according to national and international regulations and to the principles of sustainable development.
 
Saltigo offers a large technology portfolio. We employ more than 200 professionals in R&D and engineering functions, offering our customers a widespread range of additional services. All Saltigo facilities are backwards integrated with industrial gases and basic chemicals via pipeline. Together with a state-of-the-art infrastructure environmental protection, we can offer our customers a package which is hard to find elsewhere in the industry.  
 
4. What are the drives for the future growth of Saltigo? 
 
All related Saltigo assets are located in the chemical parks Leverkusen and Dormagen in Germany. The advantage of this set-up is a large network of chemical plants and technologies at Saltigo. We decided to invest US$ 70million (about € 60million) in our production network to enhance its capacity. We invested in particular in fast isolation and drying units which are needed for today’s new generation of pesticides. The new capacity will be available in Q4/2017. This investment, our large technology portfolio, and the state-of-the-art infrastructure of our chemical park will strengthen our position as one of the leading CMO companies.
 
ABAChem – Adopting "Maximize Human Creativity" as the Core Concept
 

Cai Tong
President and CEO of ABAChem  
1. How do you view the current market situation of global pesticide CMO industry? What is your prediction for the trends in the future? 
 
It has become a general trend for the global pesticide CMOs industry to move to China and India, and China is the preferred destination, because China has a complete variety of raw materials, sound supporting infrastructure, high fine chemical synthesis and construction level and numerous skilled workers. In addition, China is attaching more and more importance to protecting intellectual property rights. This industry will usher in a round of big development because of two reasons. The first reason is that large companies will launch many innovative products, which is unprecedented. The second reason is related to product cycle management, where pesticide companies will outsource the APIs and intermediates to reduce costs as much as possible to deal with off-patent stage of the products.
 
2. What should pesticide companies keep in mind when they choose a contract manufacturing partner? 
 
For pesticide companies, it is a trend to choose a CMO enterprise as a strategic partner. Large companies hope to work with excellent CMO enterprises to obtain long-term, stable supply chain resources. When it comes to how to choose a partner, they will have more concerns on whether the partner has a long-term, stable supply capacity, a sound EHS and quality system, the ability to continuously improve processes and reasonable prices. 
 
ABAChem has some experience in this regard. Joining the industry chain of the global pharmaceutical and agrochemical business is our vision since the inception of our company. We have established a strategic plan, which is to cooperate with multinational corporations according to our actual resources. After passing a strict examination and through a deliberate selection, we have become a strategic supplier of many multinational corporations. Now, ‘Made in ABAChem’ is well recognized in the field of international high-end contract research and manufacturing services.
 
3. Can you explain how your company’s advantages are different from that of other CMOs? 
 
Let me introduce our company first. ABAChem is a high-tech company in the life science area integrating R&D, production and sales. ABAChem was formed in January 2006 and listed in the Growth Enterprise Market of Shenzhen Stock Exchange in Sep. 2011. It is headquartered in Shanghai; ABAChem has four production sites located in Taicang, Rudong, Yancheng of China and Malta, and three R&D centers in Zhangjiang, Shanghai; Songjiang, Shanghai (for intermediates) and Huzhou, Zhejiang (for bio-enzymes).
 
ABAChem advocates the concept of “new drugs and new agrochemicals.” We are committed to the development of agrochemical products, which are efficient, hypotoxicity and low residue, and pharmaceutical products, which are advanced and efficient. Based on a global perspective, leading R&D platforms and well organized production, ABAChem is now catching up with the cutting edge of the global pharmaceutical and agrochemical industry. New products are being developed and commercialized smoothly, and our key products are at an international leading level in terms of technology and cost control. 
 
As for our advantages, I think the first one should be that ABAChem has a perfect technical system for chemical synthesis, biological fermentation, engineering technology and wastewater treatment technology, which leads the industry. With R&D centers as the core and various resources, ABAChem is able to provide customers with one-stop service and integrated solutions from R&D to production, including a contract research organization covering synthetic route design, development and optimization of processes and analysis methods, and contract manufacture organization covering kilograms of scale and pilot production, registration and validation batch production and commercial production. 
 
The core technologies of ABAChem include asymmetric hydrogenation, chiral resolution, synthesis of nitrogenous heterocyclic compounds, bromination, synthesis of polysaccharides, enzyme catalytic reaction and microbial reaction. 
 
ABAChem's second advantage is its product life cycle management capability, which is highly compatible with customers. ABAChem attaches high importance to optimizing each aspect of product life cycle for customers, including a contract research organization before product launch, contract manufacture organization during product patent life, and improvement of formulations and manufacturing processes at the offpatent stage. ABAChem is able to provide customers with the services from process optimization to supplier management for the purpose of creating products with higher quality and supporting the customer to launch new products at a lower cost in less time and maximize their profits. 
 
Another thing that I think is very important is the importance of intellectual property. Respect for intellectual property is a consistent aim of ABAChem. To use patents to enhance the competitiveness of company and to strictly keep confidential the technical secrets of partners are the fundamental policies of ABAChem.
 
4. What are the drives for the future growth of ABAChem? 
 
In addition to the above mentioned concept of ‘New pesticides and new pharmaceuticals’, ABAChem has another important concept of ‘Maximize Human Creativity’. ABAChem is a technology-driven high-tech company with a young, stable and experienced core technical team. The company is committed to becoming the center of such technologies as chiral resolution, nitrogen heterocyclics and its derivatives and bio-enzyme of China and even the world. In the face of the trend and opportunities in the global chemical and pharmaceutical production, research and development, we are aiming for better growth supported by the capital market. 
 
The future development of ABAChem will be driven by the spiritual core of Maximize Human Creativity, a large production capacity, powerful engineering and technical capabilities, the technology to treat complex chemical wastewater and a wealth of product reserves. 
 
ABAChem will strengthen the development for advanced intermediates. Firstly, we’ll increase the investment in independent R&D. Secondly, we’ll speed up cooperation with research institutes home and abroad. We’ll continuously upgrade our management and operation ability, and launch more products that have large market volume, high technology and high added value on the international market. We'll also endeavor to become the world’s leading fine chemicals company, and make more contributions to global environment, technology and human life.


Download AgroPages' latest magazine - 2017 Market Insight


 
 
 

Join Discussion

Guest

United States

Picture 0/1200

More from AgroNews

Sichuan Lomon Bio Technology Co., Ltd.

Magazine

  • Chinese issue of 2018 Market Insight 2018 Market Insight
  • Chinese issue of 2018 CRO & CRAO Manual 2018 CRO & CRAO Manual
  • 2018 India Pesticide Suppliers Guide 2018 Latin America Focus

Comment  

Picture 0/1200

Subscribe to daily email alerts of AgroNews.