Jun. 30, 2008
Ricardo Yapur has worked his whole professional life of over a quarter of a century in the Argentine seed treatment business. He enjoys working in the sector and is bullish about its prospects “Every day in this business is like new, it is highly dynamic and I am required to travel the globe.”
The agronomist has worked for the national seed treatment and inoculants specialist, Rizobacter, for 27 years. He became president last year, following six years as vice-president.
“The major change that I have seen in the Argentine agrochemical business has been the improved professionalism of staff, in management and in technical positions,” he says.
The improvement has come during a boom in the sector. The Argentine agrochemical market has more than doubled since the turn of the century to over $1,300 million last year, according to the national agrochemical industry association, the Casafe. The seed treatment market has trebled in that time and stood at $74.2 million last year.
The demand for seed treatments has increased particularly strongly in the past year or so. The sector enjoyed growth of 69% in dollar sales in 2007, and a similar rise in Argentine pesos. Volumes rose by nearly half. Seed treatments were among the major performers in a strong 2007 agrochemical market in Argentina. The general pesticide market rose by just over half.
Seed treatments accounted for just over 5% of the national agrochemical market last year but the industry is confidently raising prices and gaining improving sales. The market is likely to hit $100 million plus this year on current trends. Mr Yapur is confident that business will continue the expansion of the past few years. “Growth will be boosted by a greater adoption of the technology and by rising prices for it.”
The market is increasingly competitive and difficult due to the entry of competitors attracted by its rising sales, the Rizobacter president says. Nevertheless, “[we] have benefitted significantly [from the boom]”, he adds.
The international market research group, Kleffmann, has predicted that the approval of important active ingredients will be among the main drivers of growth in the seed treatment business.
There are new ais for use in seed treatments coming onto the market, but generic products have seen the real boom, according to Mr Yapur. “Registrations are coming through regularly each year as more companies have entered the commercial chain”. Argentina has a high degree of generic product competition.
The Rizobacter chief lists the major ais for use as seed treatments in Argentina as: the fungicides, carbendazim, thiram, thiamethoxam and metalaxyl; and the insecticide, imidacloprid. Another insecticidal treatment, clothianidin, has been a major new solution on the market, he adds.
The company’s president notes that the benefits from a rising market are not only higher sales but include the (improved) image with multinationals. Rizobacter has confronted the increased competition. It has forged associations with major international companies, such as Syngenta and Bayer CropScience. “[The associations] allow us to gain access to new molecules and operate under the umbrella of large companies”.
Kleffmann notes a further factor in the rise of seed treatments: the increasing areas of key crops. Maize is the major crop for such products, followed by wheat, soybeans and sunflowers, Mr Yapur says. Seed treatments are benefitting from their rising value, he adds.
There has been a boom in the planting of maize and sunflowers in the country. The area for each rose by more than 10% last season. Argentine farmers are increasingly planting soybeans as prices for the crop rise. The area hit a record for the second consecutive year in 2007/08 at 16.6 million ha. Farmers have indicated that wheat production could be hit by high input costs, but the area rose slightly last season.
The future of seed treatments will be boosted by farmers seeking to improve yields on high-value crops, Mr Yapur notes.
The price of many of Argentina’s main crops have soared in the futures markets. The Rizobacter chief says that farmers are increasingly appreciative of their seeds’ value and genetic improvements. “They want to take care of them and ensure that a plant grows from each.”
Farmers have seen the rising prices of their products [maize, soybeans etc] and have decided to go all out in order to get the highest possible yields,” Mr Yapur says. “And that has meant acquiring all the technology that is available.” The Argentine harvest hit a record 96 million tonnes last year on a record 30 million ha area for the main crops. The Argentine government says that soybean prices rose by 92% last year to around $500 per tonne.
Mr Yapur expects growth in the sector from the increasing use of insecticidal seed treatments. He believes that zero tillage (or direct drilling) is bringing new pests with it, and “as yet only a few hectares” of the 17 million ha soybean area in the country are affected by crop pests. “That is bound to change and should mean a very large future market.” Rizobacter is in the process of getting new products for this area, Mr Yapur adds.
High-value genetically modified crops have also played a role in the expanding seed treatment business. The country’s GM crop area rose by 6% last year and was the second-largest grower of such crops last year at over 19 million ha. But the GM crop area is reaching its limits in Argentina, Mr Yapur notes. “Almost the entire soybean crop in Argentina is GM, while such technology accounts for 70% of the maize area.”
There is also competition for insecticidal seed treatments from GMO technology. “GMOs are in some cases starting to impact on our business, such as the adoption of [Monsanto’s insect-resistant] Maiz Gard maize,” he says. Argentina approved the sale last year of the crop, which provides resistance to corn borers (Ostrinia nubilalis). Corn borers infested over 80% of the nation’s maize crop last year.
Rizobacter is strengthening its sales and marketing divisions to take fuller advantage of demand for seed treatment products. “We need a stronger presence and we are expanding our product range”.
Through its association with multinationals, Rizobacter has obtained exclusive rights to some of their major products. “We have an exclusive licence to sell: Syngenta’s fungicidal seed treatment, Maxin (fludioxanil + metalaxyl-M) [for use on soybeans and maize]; Bayer’s Escudo (tebuconazole + thiram) for use on wheat; and Bayer’s insecticidal product, Protector (imidacloprid + methiocarb) for use on sunflowers.”
Among the major problems that Rizobacter and the Argentine industry face is the ongoing dispute between the government and farmers. The government has imposed high taxes on the export of soybeans following the crop’s rising international prices. It hopes to gain from the situation, attempting to justify the move by saying “the whole nation should profit” from the good fortune of rising soybean prices.
Farmers are not impressed. They have reacted by setting up road blocks, thereby impeding the transit of produce. Reports say that the national supply chain for pesticides is “completely cut off”. But Mr Yapur is more sanguine. “So far we have not seen any impact as a result of the dispute but there will be implications for the entire industry if it goes on.”
Mr Yapur is highly bullish about the future of his business and the wider sector. “We cannot predict how high the market will go, but it will go on rising,” he says.
Backgroud about the interviewee:
The president of Argentine seed treatment company Rizobacter, Ricardo Yapur, tells Robert Birkett of his country’s fast growing agrochemical sector.
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