Syngenta CEO: First quarter sales in China increased by 41%, MAP model has been a surprising success

According to the first quarter fiscal report of the Syngenta Group, its sales increased by 20% year-on-year to reach $7.1 billion, including $2.2 billion in business income in China attributable to the satisfactory business performance of the Chinese market.

“First quarter sales in the Chinese market increased by 41% compared to the same period last year, which is the highest growth rate among all countries. This is unbelievable,” Fyrwald said, during an interview with a Chinese media outlet.

End-to-End Tracing: The Future of Agriculture

Fyrwald stated that as far as the global market is concerned, Syngenta’s primary business has developed rapidly, where its crop protection, seed and crop nutrition businesses achieved a growth rate of 20%. Among them, the modern agriculture platform (MAP) showed the most dynamic growth, with a rate of 300% in the first quarter of this year, reaching sales of $286 million.

Concerning MAP, Fyrwald stressed that this business unit did not exist four years ago but has now grown into 360 MAP centers in China. This rapid roll-out would not have been possible without the support of local Chinese governments. This service platform enables soil sampling and analysis, which form the basis of the selection of seeds, crops and fertilizers, whilst crop protection solutions and response measures to natural disasters are being developed.

In China, the MAP model is a “surprising success.” Because of improved soil quality and the reduction in the use of fertilizers and insecticides, yields have increased, eventually resulting in greater income and reducing pollution.

To Fyrwald's surprise, this approach in the Chinese market has attracted the attention of many retailers and consumers from the start. Syngenta later attempted the introduction of fresh fruits and vegetables into the prime food e-platform of FreshHema. For example, a map is displayed on a strawberry box and scanning a QR code will show the origin of products and the name of relevant farms, as well as the product’s sustainability data.

“This is a great business model, and end-to-end tracing and data control can only happen in China. Currently, there are no other places that can completely process end-to-end data like what can be done in the Chinese market,” Fyrwald said.

According to Fyrwald, this could be more successful because Chinese consumers are keen to acquire the digital information of products and are familiar with using digital technology. Therefore, Chinese retailers are willing to use front-end digital tools to track the whole supply chain, connecting consumers and farmers. 

Green Business Opportunities in Chinese Agriculture

Fyrwald noted that climate change will inevitably create more and more natural disasters, which agriculture needs to combat using advanced technologies. 

As witnessed last year alone, climate change created many natural disasters, such as floods in China, droughts and successive floods in Australia, and 380C temperatures in Siberia that triggered massive wildfires. The temperature was also unprecedently high in the Arctic Circle. This year, Europe experienced a cold wave after several years of floods and droughts.

Fyrwald bluntly commented that the frequent occurrence of natural disasters sharply increased seed prices, whilst the price rises of corn, wheat and soybean have led to the overall price rises of food items.

However, in his view, the situation has created many “green and innovation opportunities.” For example, Syngenta launched a corn seed product four years ago better adapted to drought. As a result, due to frequent droughts, the seed product, which is positioned as a niche product, recorded sales of $1.2 billion. Another example is a similar agricultural biological vitamin product, which enables grains to better adapt to extreme weather. This product has also become a major seller. In addition, pest resistant products are very popular.

“ChemChina has been very supportive to Syngenta's R&D and innovation activities. Syngenta began the development of products related to sustainable agriculture seven years ago. At that time, it realized that sustainability would be increasingly important to agricultural development. Today, Syngenta is focusing more on research and development activities and has launched many seed and crop nutrition products. The main change in the past two years is the fact that farmers are more accepting of such products,” Fyrwald added.

Global Economy Back to Normal

“Although China has already contained the pandemic for some time, the problem still exists in other parts of the world, such as Brazil and Argentina, which are major agricultural countries. Many products are manufactured in China and shipped to other global markets, so the Chinese government is prioritizing logistical services,” Fyrwald added, stressing that the challenges caused by the pandemic to business operations will never go away. 

From a supply chain perspective, agricultural products are regarded as strategic products, which are safeguarded in all countries as priority supplies for their peoples. Therefore, when the global supply chain faces considerable pressure, the Chinese government, like all other governments, will prioritize the transportation of agricultural products.

According to Fyrwald’s judgement, business in China has returned to normalcy, whilst the United States, Israel and the United Kingdom are also on the way to normalcy. It is also evident that people are eager to go out and spend, so when these countries return to normal, their economies will rebound quickly. In contrast, Europe, Brazil and Argentina are falling behind somewhat, but hopefully, in the next few months during the second half of this year, these regions can survive the public health crisis and achieve economic recovery.