Ranking List of 2019 Top 20 Global Agrochemical Companies Recomposed, Graced by 11 Chinese Players

Recently, AgroPages released the Ranking List of 2019 Top 20 Global Agrochemical Companies. According to the list, in FY2019, the total sales of these top 20 agrochemical companies reached US$ 59.53 billion, growing by US$ 3.13 billion, or 5.6%, compared with US$ 56.396 billion in FY2018. The concentration ratio was further increased. Accordingly, the ranking list of the top 20 companies was recomposed. The new top 4 players were: Bayer CropScience, Syngenta, BASF, and Corteva, closely followed by FMC and UPL. Specifically, the top 4 players accounted for 57% of total sales of the top 20 companies and the top 10 players accounted for nearly 90%. In terms of growth rate, UPL topped the list, with a whopping 66% rate. The highlight was that up to 11 Chinese players graced the list. In June 2020, the establishment of Syngenta Group portended likely recomposition of the industry ranking in the future: Syngenta Group (pesticide business), Bayer, BASF, Corteva, FMC, UPL, and Sumitomo Chemical etc..

According to statistical data from Phillips McDougall, based on ex-factory levels, in 2019 the global pesticide market for crops posted sales of US$ 59.827 billion, representing a decline of 0.8% compared with the level of US$ 60.304 billion in 2018. Throughout 2019, the global pesticide market was adversely impacted by a wide range of factors. To begin with, many parts of the globe experienced harsh weather challenges—most notably the floods inflicting North America and droughts affecting Southeast Asia and Australia—thus limiting the application of crop protection products. Second, the China-US trade disputes have been affecting the global landscape of crop trade. Third, Europe’s draconian polices on pesticide management resulted in some of the staple crop protection products being banned from use. Finally, China imposed more stringent regulations on safety and environmental protection. In terms of regional markets, Latin America was the only region that saw gains. The region registered an impressive growth of 17.6%, thus effectively offsetting the decline in all other regions.

Four giants promise to be recomposed

Thanks to its takeover of Monsanto, in 2019, Bayer CropScience overtook Syngenta, topping the list with US$ 10.374 billion in sales. This enabled Bayer to become the world’s largest pesticide company, which saw a 7.6% year-on-year growth in performance. In Bayer’s pesticide portfolio, herbicide takes a leading role, accounting for a share of 46.9%. In 2019 herbicide sales came in at EUR 5.097 billion, jumping by 22.2% year-on-year. In 2019, Bayer CropScience saw its sales in North America—its largest regional market (including pesticides and seeds)—zoom by a whopping 86.2%, to EUR 8.743 billion.

Syngenta, which ranked second with a small gap, registered pesticide sales of US$ 10.118 billion, up by 2.1% year-on-year. Herbicide, Syngenta’s largest product category, brought the firm US$ 3.538 billion in sales in 2019. The birth of Syngenta Group, a global agrochemical titan, was undoubtedly the greatest milestone for the global agrochemical industry for the year. In 2019, Syngenta Group recorded the sales of up to US$ 23 billion (including about US$ 14 billion in crop protection business), promising to rewrite the ranking of the list once more.

In 2019, the pesticide sales of BASF Agricultural Solutions grew by 3.0%, to US$ 7.123 billion. Herbicide, accounting for 41.1%, is BASF’s top product category and posted EUR 2.616 billion in sales in 2019. North America represents BASF’s largest regional market. In 2019, the firm’s sales in the region reached EUR 3.108 billion (including pesticides and seeds), increasing by 43.5% year-on-year and accounting for 39.8% of total sales of the company. Europe; South America, Africa, Middle East as a whole; and Asia accounted for 27.1%, 23.0%, and 10.0%, respectively.

Following BASF, Corteva posted  pesticide sales of US$ 6.256 billion, down by 2.9% year-on-year. Among Corteva’s pesticide portfolio, North America is its largest regional market, whose sales in 2019 reached US$ 2.205 billion (accounting for 35.2%), down by 9.6% year-on-year. Latin America; Europe, Middle East, and Africa as a whole; and the Asia Pacific accounted for 28.1%, 21.8%, and 14.9%, respectively.

Middle players aim high

Companies taking the 5th-9th places in the list—including FMC, UPL, ADAMA, Sumitomo Chemical, and Nufarm—with combined sales of US$ 17.77 billion, represented 30% of the total sales of top 20 players. Except ADAMA, which saw a modest drop in sales, the other middle players achieved growth in their sales performance. UPL saw the strongest, year-on-year 66% rise, topping the list in terms of growth rate.

In 2019, FMC ranked 5th in the list with sales of US$ 4.61 billion, an increase of 7.6% year-on-year. This growth benefitted primarily from higher volumes and heightened prices of the firm’s crop protection products. The company posted the largest increase in Latin America, where its sales jumped by 19% year-on-year. Price hike was also one of the critical factors that drove up its performance.

Benefitting from its successful acquisition of Arysta LifeScience, UPL saw a whopping 66% spike in its pesticide sales, with pesticides accounting for 88% of its total business. Except in Europe, rupee-denominated sales of UPL’s overall business registered double-digit growth in all regional markets, with the Latin American market seeing the strongest, year-on-year 24% jump. In terms of pesticide sales, UPL ranked 4th in Brazil and 1st in both Mexico and Columbia.

In 2019, the pesticide sales of ADAMA, a subsidiary of Syngenta Group, amounted to US$ 3.611 billion (representing 90.3% of its total sales), remaining largely flat compared with the level in 2018 and enabling the firm to rank 7th in the list of top 20 companies. Among ADAMA’s various crop protection products, herbicide represents the largest product category, whose sales in 2019 reached US$ 1.72 billion, accounting for 47% of total sales of all crop protection products. When it comes to regional sales (including crop protection products and intermediates&ingredients), Europe and Latin America, with sales of US$ 1.030 and US$ 1.022 respectively, ranked among the best of the top 5 markets. Specifically, the European market saw a 2.6% decline in its sales; whereas the Latin American market saw the largest, 9.3% rise year-on-year. In addition, both the Asia Pacific (including China) and the North American markets saw gains in their full-year sales.

Affected by extreme weather conditions in North America, Sumitomo Chemical, which ranked 8th in the list, registered US$ 2.575 billion in sales for FY2019, a modest rise of 1.5% year-on-year. Notably, in early April 2020, Sumitomo Chemical officially completed its takeover of Nufarm’s operations in South America. After this acquisition, Sumitomo Chemical’s pesticide business in South America will surpass that in North America and will see the sales in the region exceed JPY 100 billion.

Due to prolonged droughts in Australia, Nufarm, which ranked 9th in the list, saw its AUD-denominated pesticide sales growth in all regions except in Australia and New Zealand. By product category, Herbicide sales increased 8% to AUD 2.29 billion with growth in phenoxy herbicides offsetting a 3% decline in glyphosate sales due to unfavourable weather conditions in Australia. Glyphosate sales represented approximately 10% of total company gross margin in 2019. Other herbicide revenues were up 21% on the prior year with Dicamba, Flumioxazin, Bromoxynil and Fluazifop the major contributors. Insecticide sales were up 21 % to AUD 462 million with growth driven primarily by a full year contribution from the acquired European portfolios and continued growth in Brazil.

Fungicide sales grew by 30% to AUD 410 million. Growth was driven primarily by a full year contribution from the acquired European portfolios with tebuconazole and prochloraz mixtures delivering strong growth despite constrained supply limiting sales.

Chinese players rise to prominence

Nine of the 11 companies after top 9 in the list were based in China, with Yangnong Chemical rounding out top 10. Another two Japanese firms were Kumiai Chemical and Nissan Chemical, which ranked 15th and 16th, respectively.

In 2019, Yangnong Chemical saw its pesticide sales soar by 58.8% year-on-year to US$ 1.251 billion, a jump that moved its ranking of 14th in 2018 up to 10th in 2019. In 2019, Yangnong Chemical implemented a major asset restructuring by using CNY 913 million in cash to purchase a 100% stake in Sinochem Crop Care and a 100% stake in Shenyang Sinochem Agrochemicals R&D Co., Ltd, both held by Sinochem International. This restructuring put the company in a much stronger position to innovate pesticides, promote preparations, operate in an integrated manner (research, production, and sales), and to compete in the market. In addition, Yangnong Chemical, building on its strength of solid capabilities for supply security, tries to satisfy the demand of valued customers and potential customers at home, thus expanding pesticide sales. The company is proactive in developing markets for its new product pyraclostrobin, to create a new growth point. It continues to deepen its collaboration with Sinochem Crop Care, drastically boosting the sales of preparations. It consistently increases the depth of its strategic cooperation with agrochemical multinationals in new projects and new products. Meanwhile, the company effectively conducts product registration to lay a solid foundation for business expansion.

Benefitting from steady progress of the “fast market access platform” globally as well as from a deep commitment to its proprietary brands, Shandong Weifang Rainbow Chemical Co., Ltd. saw its sales hit US$ 880 million in 2019, up by 8.8% year-on-year. Following Rainbow Chemical, Beijing Nutrichem posted its pesticide sales of US$ 757 million, a sharp decline of 19% year-on-year. This decline in sales mainly pointed to weak exports of the industry amid complicated international trade situations during the reporting period, said the company. Against this backdrop, the company deepened its business structure and shrank its trading business. However, due to suspension of production of its subsidiary Yancheng Southchem, its self-production business saw a fall in revenue, resulting in less operating profit. What’s more, because of the industry downturn, the associates saw fewer investment returns for this period, and earnings from the foreign exchange were also in the decline.

In 2019, Nanjing Red Sun, which ranked 13th in the list, saw its pesticide sales sharply decline by 22.4%, to US$ 691 million. Adversities and pressures both at home and abroad posed challenges to its operating results, the company noted. In the face of these adversities and pressures, the firm saw the price of its major products such as paraquat go down amid volatility and saw its comprehensive operating costs go up, thereby leading to a substantial decline in operating results. In response, the company commits itself to a business approach of “concentrating on the main business, refining the industrial chains of strength, and diversifying the core product line-up”. Under this approach, the company builds on its strengths in green pesticide technology arising from its transformation of traditional pesticides using “digitalization + biochemical technology”, as well as on its strengths in products and industrial chains. It works closely with its partners to stabilize the production and supply of core products. In particular, the company pressed hard to promote and sell Aquacide, its workhorse, whose sales and market share rose significantly compared with their year-ago levels. Not only did this curb the decline in the firm’s performance for the current period, but it also laid a solid foundation for the company to become the first mover in the market to reap greater benefits.

In 2019, Lier Chemical saw its pesticide sales fall by 3.3% year-on-year, to US$ 586 million. Several factors were to blame for the decline in sales. First, the company’s major products contributed less profit, due partly to drastic declines in the price of its major products arising from heightened market competition, and partly to price hikes of some raw materials. Second, the company had to have its products registered before they came to international markets. Third, the company’s operating costs rose as it invested more in product research and development.

Hubei Xingfa Chemicals, which ranked 20th in the list, was the first new company put onto the list and in 2019 saw its sales moderately rise by 2.8%, to US$ 523 million. According to the company, in the first half of 2019, owing to a host of reasons—including improved production rate of the industry, increased market supply, elevated market inventory, as well as reduced purchase from the United States, an important consumer of glyphosate, having suffered from prolonged dreadful weather events—the glyphosate market was sluggish, and its prices declined amid volatility. During July and August, because of tough regulations imposed on the yellow phosphorus industry in Southwest China, the price of yellow phosphorus went up, providing stronger cost support for glyphosate and resulting in a rally in the market price of glyphosate. From September to December, due to the decline in yellow phosphorus price as well as the rise in the operation rate of the industry, the market demand of glyphosate turned sluggish again. All these factors affected the sales performance of the firm.

Kumiai Chemical, which ranked 15th in the list, in 2019 saw its US$-denominated sales drastically decline by 24.7% but saw its JPY-denominated sales rise by 6.6%, to JPY 72.623 billion. According to the company, for farmland products in the Japanese market, although full-scale sales of Effeeda herbicide for rice paddy fields commenced, sales of established products such as Top Gun and GanGan declined. As a result, sales of herbicide for rice paddy fields declined overall year on year. On the other hand, sales of insecticide for rice pest management increased year on year because new compound agents containing Pyraxalt were launched, and shipments of compound agents containing Isotianyl expanded. Thus, the sales of agents for rice paddy fields overall were higher than in the previous fiscal year. Sales of horticulture products were higher than in the previous fiscal year as sales of pesticides such as Cyazypyr remained steady.

Sales of specialty products overall increased year on year. For sales of active ingredients developed in house, Effeeda, a herbicide for rice paddy fields, and Fantasista, a pesticide for horticulture, maintained steady growth, and sales of consigned production and sales to golf courses and other non-agricultural facilities also outperformed the previous fiscal year.

Sales to markets outside Japan increased from the previous fiscal year. Sales of mainstay Axeev, a herbicide for dry field farming, remained robust in the U.S. despite a decline in acreage dedicated to soy beans, an important target product, due to prolonged early spring rain and U.S. – China trade friction. The herbicidal action of Axeev continued to be rated highly in Argentina and Australia also, and sales expanded steadily there.

Nissan Chemical, which ranked 16th in the list, in 2019 saw its US$-denominated sales increase by 14.7% to US$ 655 million and saw its JPY-denominated sales rise by 2.1% to JPY 64.038 billion. In domestic agrochmicals market, sales of "GRACIA”(insecticide) launched in May in Japan were strong. "ROUNDUP"(non-selective leaf treatment herbicide)revenues increased from the previous year due to natural disasters in the first half of the previous fiscal year, and remained steady in the second half of this fiscal year. In overseas agrochemicals market, sales of "TARGE" (herbicide) decreased, but sales of "GRACIA" for the Korean market and "QUINTEC" (fungicide) acquired in the third quarter contributed to sales.

Still to be expected despite greater challenges

Since 2020 unfolded, the sudden outbreak of COVID-19 has made unprecedented impacts on the global agrochemical industry. According to the FY2020 Q2 financial results posted by top 5 agrochemical titans—Bayer, BASF, Corteva, FMC, and ADAMA, four of these five companies saw different levels of declines in their Q2 results, except ADAMA, which registered a modest rise in its sales. COVID-19 has temporarily impacted the performance of these companies. But beyond that, the pandemic is prompting these firms to transform and upgrade all the elements across their value chains. What’s more, COVID-19 stands to make the industry innovate faster as a whole. Notwithstanding the diverse pressures in the global agrochemical market for the time being, as the population continues to increase and as people need more and more agricultural products, the agrochemical market remains something to look forward to.