2014 Top 20 Global Agrochem Firms: Growth Slowing Down

AgroPages issued the list of top 20 global agrochemical firms in 2014. Compared with 2013, the ranking of the first 13 companies remains unchanged, being the Top 6 and the top generic companies. 
 

Among the 14 to 20 places, Chinese Nanjing Red Sun and Shandong Rainbow Chemical replaced the 2 Chinese enterprises in 2013, the rest of the 5 remains on the list ranking changed. 
 

As regards to growth rate, except Ishihara Sangyo Kaisha, all enterprises achieved sales growth. Among them, 3 enterprises achieved double-digit growth (Monsanto at 13.1%, Nanjing red Sun at 19.9%, Shandong Rainbow at 11.5%). Most of the enterprises maintained slight growth, a sharp contrast to the double-digit growth by more than half of the enterprises in 2013. 
 

Growth of top 20 firms slowing down 
 

Due to the drought, lower prices and unfavorable exchange rate of 2014, the growth of global agrochemical market slowed down, being only 4.5%, which is very different from 2013. Among different markets, only Latin America achieved double-digit growth at 15.1%. All other regions achieved slight growth and a few even experienced declinations, as being reflected by the sales of the top 20 global agrochemical firms. 
 

In 2014 the Top 6 multinationals achieved growth for 4 consecutive years but growth rate slowed down apparently. Among them, Syngenta and Bayer CropScience were running far ahead of others with sales reaching $11.38 billion and 10.25 billion respectively. Monsanto realized highest growth rate for 2 consecutive years among the Top 6 arriving at 21.7% in 2013 and 13.1% in 2014. BASF, Dow AgroSciences and DuPont achieved slight growth. 
 

In 2014 the No.7 ranked Adama Agricultural Solutions (ChemChina subsidiary) achieved 5.3% sales growth (calculated in USD) to have reached $3.03 billion. Its sales in all regions achieved growth, of which Latin America achieved a highest growth at 8.6%. The No.8 ranked Nufarm achieved 15.5% sales growth (calculated in AUD), of which European, Asian and South American markets reached double-digit growth (calculated in AUD), particularly having reached as high as 54% growth in the South American market. If calculated in USD, its pesticide sales increased by 4.5%. The No.9 ranked FMC achieved only 1.3% sales growth in 2014, a sharp contrast to its 21.6% growth in 2013, resulting from the downturn of the Brazilian market. The No.10 and No.11 ranked Sumitomo Chemical and UPL achieved respectively 3.4% and 7.0% growth (calculated in USD). UPL achieved growth in all regions, particularly a significant growth in Latin America and India.
 

The No.12 and No.13 ranked Arysta LifeScience and Cheminova were respectively acquired early this year by Platform Specialty Products (PSP) and FMC. So far Arysta has not yet announced its sales of 2014. However according to the information of PSP, the total sales of agrochemical services of Arysta, Chemtura and Agriphar was $2.15 billion. Based on the performance at present time, Platform Specialty Products might enter the top 10. Cheminova achieved 2.5% sales growth (calculated in USD) in 2014, its growth in Europe, Latin America and other regions were offset by the dropped sales in North America. 
 

There are 4 Chinese enterprises on the list of top 20, of which Zhejiang Wynca Chemical, Huapont-Nutrichem and Nanjing Red Sun ranked No.14 to No.16 while Shandong Rainbow ranked No.19. Due to the rise of pyridine-paraquat industry chain, Nanjing Red Sun achieved a significant growth of nearly 20%, which is the highest growth among the top 20. Attributable to is transition strategy and good performance in Latin American market, Shandong Rainbow went on the list for the first time having achieved the double-digit growth at 11.5%, while Wynca Chemical and Huapont-Nutrichem achieved respectively 6.9% and 5.7% (calculated in USD). 
 

The 2 Japanese companies – Kumiai Chemical and Ishihara Sangyo Kaisha, ranked No.17 and No.20. Kumiai Chemical achieved a slight growth of 4%, while Ishihara Sangyo Kaisha experienced a decrease of 9.3% (calculated in USD) being the only sales-declined company among the top 20. Sipcam-Oxon moved up to No.18 in 2014 from the No.20 in 2013, with a slight growth of 1% (calculated in USD). 
 

Structure of industry players expected to change in the future 
 

The above unfavorable factors such as farm product prices, extreme weather conditions and exchange rate fluctuations are expected to remain for a longer period, which will cause a long impact to agrochemical market. The dispute on the carcinogenic effects of glyphosate over recent 2 years and the retreat of paraquat from market are expected to cause certain degree of impact to the industry players in the mid-long term. Planting policy, import and export policy on GM crops of various countries bring uncertainties as well. In view of the above factors, the product structure and market positioning of enterprises may be influenced, which will in return affect the ranking of industry players to certain extent. However, the real factor to affect the business structure lies on the mergers or internal resource consolidation. 
 

First of all, the ranking of Top 6 becomes more uncertain. It is said that Monsanto recently announced giving up the acquisition of Syngenta but is looking for new object of acquisition in a hope to expand pesticide related business so as to make up for the single pesticide product, meanwhile to find a way out of the disputed GM crops and glyphosate over recent years. After refusal to Monsanto’s offer for acquisition, Syngenta announced separation of its flower and vegetable seed business and a sale of Enkhuizen unit in a purpose to further enhance its competitive edge of core business. Information shows that Syngenta cut 1,000 job positions globally in 2014 and carried out an Accelerating Operational Leverage Program for the cost-saving sake, which aims to achieve business growth via cost reduction. There might be a big change of the Top 6 structure in the years ahead. 
 

Secondly, ranking of top generic companies may become uncertain. Further to its announcement in last October the acquisition of China agrochemical business of China National Agrochemical Corporation, ADAMA recently announced a merger with Sanonda and will look out for public listing in a stock market in China. If ADAMA could succeed in the merger with Sanonda, its sales will grow significantly and may step into Top 6. Additionally, ADAMA has launched a series of agrochemical products. ADAMA China Chief Business Officer Ziki Levavi said that ADAMA is targeting to become the No.1 formulation distributor in Chinese domestic market in 3 years’ time, to be backed up by the great market potentials of China. With the completion of the acquisition of Arysta and Cheminova respectively by PSP and FMC, the sales of the Arysta and Cheminova will be incorporated in the sales of PSP and FMC respectively. Arysta and Cheminova will no longer be listed on the top 20, where PSP is expected to enter top 10 and FMC will jump to No.7 or No.8. 
 

After some players are delisted from the top 20, a new player will enter. Present statistics shows that the new company to get into the top 20 will be possibly a Chinese company, which means there will be 6 – 7 Chinese companies being on the top 20, demonstrating more presence of Chinese agrochemicals in the global market. 
 

In conclusion, merging and reorganization of global prime industry players will be more intensified, resulting in formation of an unpredictable agrochemical business structure.