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FMC targets 10% of Brazil's soybean agrochemical market until 2020
Sep. 21, 2015
FMC Química do Brasil
BrazilFollow
Brazil
"From four to five years ago till now, we have been re-positioning corn and soybeans as our strategic pillar. We need to increase our participation in those two crops to be able to remain the growth in such a competitive market as the Brazilian." says him.
Currently the company is more active in cotton, which holds 25.1% market share, and sugarcane, with 20.5%. However, these sectors have lost strength to lead the growth. On the other hand, FMC has a market share of 6.3% for soybeans and 4% for corn with potential of growth.
"The grain sector is the biggest market and where there is a greater opportunity." Baptista also highlights that one of the purpose to purchase Cheminova is to expand the portfolio to enable access to stronger markets. Comparing the possibilities, the executive believes that soybean should present more difficulties for increased competition. "In the soybean market, there is a range of technology products and companies acting more strongly," he explains.
2015/2016 crop season - with a close planting, a delay on pre-cost funding, has hurt the demand for inputs in the first half of the year. The higher dollar and more expensive credit - with more requirements of the banks to concede financial help - and lower commodity price are the factors that led rural producers to be more cautious in Brazil. The situation imply the fall on revenue in the agrochemical sector this year, analyzes the FMC director.
Baptista believe that in general the 2015/2016 harvest may have a growth on the soybean surface - around 100 and 200,000 hectares - and corn with a bigger surface of the second crop. On the other hand, the cotton surface will stay around 950,000 hectares. But the executives understand that, when buying agrochemicals, producers should adopt a different posture of previous years.
"The farmer has done fewer investments and, therefore, we are not selling so big volumes. In previous years, they have purchase a little bit more than the necessity. This year, the purchases are the strictly the necessary, discounting even on-the-farm stocks," explains Baptista.
Citing the National Union of Crop Protection Industries (Sindiveg), the FMC director says that the Brazilian agrochemical market points to a revenue between US$ 10 billion or US$ 10.5.billion. Last year, it was US$ 12.5 billion.
Following the trend, FMC will end the year with a revenue of US$ 900 million. In 2014, the value was US$ 1.05 billion. If the number is confirmed, it would be a fall of 14.2%, which is less than what is expected for the industry overall (16%). Baptista, however, does not deem the figure as critical.
"It is not an easy year. Logically we have already sold more products (in the past) than today, but we are within expectation," says the director. It means that even in situation of fall, it will increase the market share to 9% of the Brazilian market. The resumption of growth figures, according to him, will take place between 2016 and 2017.
Source: AgroNews
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