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BASF enjoys its Australian-made success
Mar. 6, 2018
Despite an awkward past year for farm chemical marketers nationwide, Australia has become something of a favoured son for BASF.
The German giant, which has just posted a six per cent lift in its Asia-Pacific region sales for 2017, managed to exceed its Australian sales expectations despite broadacre crop growing conditions being less than optimal for much of the season.
Local research and development work is also putting Australia in a leading position globally to launch BASF’s next “blockbuster” insecticide Versys, targeting aphids in broadacre and horticulture crops.
Although the world’s third largest agricultural chemical company has only been active in Australia for the past four years, the local market’s influence on the global business is increasingly significant says crop protection president, Markus Heldt.
“It’s interesting to see how the voice of Australia is much louder and relevant in our global development agenda now,” said Mr Heldt, visiting briefly from Germany.
Since 2014 when he was last in Australia, BASF’s agricultural division here has grown from just 15 staff to 60 and continues expanding.
The payroll includes a team based at the company’s purpose-built research farm at Tamworth in northern NSW which has become a hub for new chemical product field trials and industry training.
“Australia’s very much part of our global development business case,” he said.
“Australian farmers are early adopters to innovation and that is being reflected in our performance here as we offer a more balanced portfolio and gain registration for more new chemistry coming through the pipeline.
“We see the Asia-Pacific as an area we can grow and catch up.
“We have potential in Asia and Australia to be two times bigger than we are now, given the products we already have available.”
Despite the volatility and unpredictability of local farming conditions, BASF regarded this as one of its top 10 global crop protection markets with the region’s largest growth momentum, alongside China and India.
Leading local innovation
It was also an important pace setter in key technical agronomy areas such as the development of weed resistance management.
Australia and New Zealand agriculture head, Gavin Jackson, said the Tamworth research farm, in particular, was playing an important role in new herbicide and insecticide development work, frequently hosting lead BASF researchers from overseas.
Notably, a number of technical specialists for Canada, had been comparing notes here and “accelerating the knowledge transfer” to speed up Australia’s product innovation program.
“Depending on the progress of our registration approval, it is quite likely Australia will the first or one of the first countries to release Versys to the market in 2018,” he said.
Versys, powered by BASF’s new active ingredient Inscalis, is tough on sap sucking insects, but soft on beneficial bugs in crops.
Australia was involved in the product’s early “optimisation phase” back in 2014 within months of BASF’s first technical staff being recruited here.
Australian-made biological insecticide, Velifer, now manufactured at BASF’s recently upgraded Somersby plant in NSW, is due to be registered for release here next year.
It is already used overseas to help prevent insects becoming resistant to conventional pesticides, particularly in covered horticultural cropping conditions.
Meanwhile, three new herbicides are also in the Australian pipeline scheduled for launch in 2020 and 2021.
They promise new chemistry for resistant management and will provide “significant new options in wild radish and ryegrass control in cereals”.
A broadacre post emergent herbicide is also scheduled for an Australian launch in 2022, while a conventional and a biological fungicide are set for launch in the next 18 months.
Ambitious plans
“We’re extremely happy with our performance in the market and on the R and D side,” said Mr Jackson.
“We’ve had ambitious growth plans in the past two years and exceeded them which has helped to contribute to the rise in sales across Asia Pacific in 2017.”
Asia-Pacific sales of $922 million contributed to the company’s total crop protection revenue of $9b last year – up 2.2pc on 2016.
The company does not release individual market results and won’t venture a prediction on how much ground it has to make up to become a market leader in Australia.
“There were some challenges last season, particularly for growers in WA and parts of eastern Australia who encountered extended dry periods and frosts,” Mr Jackson said.
“But despite all those concerns farmers are getting better and better at handling the elements and responding quickly when they need to.”
Australian challenges
Mr Heldt conceded Australia was not going to deliver the relatively consistent cropping conditions the company enjoyed in Europe or North America.
“However, like the customers we work with, we need to have the stamina and strategies to survive and accept there are good, and not so good, years,” he said.
“More and more, weather conditions across the globe are giving agriculture challenges.
“Our decision to re-enter the market here had a tough start with the weather we encountered, but 2015-16 was a good change and the outlook in the mid-term is extremely promising.
“Our commitment to product innovation and R and D gives us a lot of confidence in our growth potential.”
Source: Farm Online
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