AgroPages-Top 20 Brazilian agrochem companies in 2016: Market concentration drops

Leonardo Gottems

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Correction: The revenues of the company CCAB Agro in fiscal year 2015 and 2016 were incorrect in the article published by AgroNews on December 7. The correct revenue figures provided by CCAB Agro are USD 92 million (FY 2015) and USD 106 million (FY 2016), respectively. Now, the figures and the ranking of this company are all updated.

The agrochemicals sector registered a revenue of US$9.56 billion in Brazil in 2016, which represented a fall of 1% in sales, against the US$9.6 billion registered in 2015. The retraction is even more significant when compared to 2014, the accumulated decline reached not less than 22% in the period.

According to the Brazilian National Union of Crop Protection Products Industry (Sindiveg), the factors that affected the revenue were the devaluation of Real, growth of illegal products, fall in input prices, lower level of plague attack on crops, the appearance of new control technologies and a climate that is less prone to plagues across the country. In 2017, the entity affirmed that there was a trend towards greater fall due to illegal products, high stocks and the industry’s credit risk.

Fungicides accounted for nearly 33% of the market and became the most sold class of products in Brazil last year, owing to the increased aggressiveness of Asian Rust in Brazil. With higher resistance of weeds to active principles, herbicides took the second place with 32.5% of the sales. In this scenario, the sales of selective herbicides grew, mostly for the soybean crop.

Insecticides, which were in the top-selling category, recorded a fall of almost 12%, when compared with 2015, reaching a little over 29% of the total sales. Though there was a growing demand for the products for seed treatment and in the field — due to plague — this market segment suffered from the impact of illegal trade of these products.

Last year, in terms of volume, some 414,975 tons of agrochemicals were imported, which represented a growth of 5.72% compared to 2015. In terms of the volume of imports of technical and formulated products, the percentage was practically equal to 2015. The technical products corresponded to 56.5% and the formulated products were 43.5%. China led with 32.7% of the total imports, followed by the United States with 17.51%. India was responsible for 11.95%, followed by Argentina (4.99%), England (4.27%), Israel (4.2%), and Germany (3.6%).

Sindiveg’s data indicated that the generic sales or their equivalent totaled 283,050 tons in Brazil last year. The result surpasses the triple of what was sold of specialties (commercial brands), which in 2016 was 94,120 tons in the country. On the other hand, specialties maintained their superiority with 47.66% of the generated revenue from generic products, while the commercial brands generated a revenue of US$5.7 billion last year, and generics totaled US$3.86 billion.

“The devaluation of the Real occurred in 2016, because the industry could not pass the difference to the farmers, and the average price fell. Even so, the stocks remained high, which took prices downward. The smuggling and fake products took a significant slice of the market, accounting for 20% at least, which is scarring. In addition to these, the economic pressures reflected on the negotiations, so the deadline for receipt by the industry jumped from 222 days to 327 days in 2016,” noted Túlio Teixeira de Oliveira, Executive Director at Brazilian Association of Generic Agrochemicals (Aenda).

The revenue statistics of companies producing crop protection products reveal that the first 10 companies generated US$7.9 billion in sales, which means they occupied nearly 83.2% of the Brazilian market. The result represented a slight fall in comparison to 2015, when the first 10 companies with the highest performance had occupied 84.52% of the market.

Syngenta continued to lead in the sales of agrochemicals in Brazil, though it registered a sales fall of US$127 million last year, as against 2015. The results refer to the first year after the announcement of the sale of the company to ChemChina, which did not face restrictions from the country’s anti-trust regulators. Syngenta highlighted that the sales of corn Viptera led to an increase in its participation in the market for the protection of this crop in Brazil.

Bayer, which is positioned in the second place, also registered a fall in sales by US$102 million in Brazil, when compared with 2015. The performance of Bayer Group’s agricultural division was responsible for 73% of the result in the country. Bayer highlighted the high level of its investments in the Expertise Center on Tropical Agriculture, which monitors constantly the evolution of fungi, plagues and weeds for the development of specific solutions for resistance management.

Though it maintained its third position, BASF had the strongest fall in sales among the larger crop protection companies in Brazil, with nearly US$201 million less sales in 2016, in comparison with 2015. Last year, it launched Ativum EC, a high-efficiency fungicide for the control of Asian Rust and other major soybean diseases.

Dow and DuPont jumped to fourth and fifth positions, respectively, in the first year after the announcement of the merger of the two giant companies, though the business would have concluded only in September 2017. The result of Dow AgroSciences is credited mostly to the launch of PowerCore corn, which allies plague control to the tolerance of two types of herbicides, glyphosate and glufosinate, with three different Bt proteins.

In this scenario, FMC fell to the sixth position, making US$238 million less in 2016, compared to 2015. Australian company Nufarm jumped from the ninth to the seventh position, as a result of an increase of US$81 million in sales, when compared to 2015. Another company to rise is UPL, which now occupies the eighth position, previously belonging to Adama. It registered a growth in revenue by US$34 million.

Monsanto is in the 10th position, losing three positions compared to 2015, and registering sales value of just US$4 million higher in 2016 than in 2015.

Arysta LifeScience does not appear independently now in this ranking because of Platform Specialty Products Corporation’s acquisition, though it generated US$22 million more in sales last year compared to 2015. According to the assessment of Aenda’s Túlio Olivera, “In spite of the effects of mega fusions, we have seen a growth made by FMC, Arysta, Ourofino, CCAB and Helm in the previous years.”