Over recent years, the global agriculture industry has gone through unprecedented challenges and uncertainties, where energy prices have stayed at high levels, raw material and intermediate costs have soared, shipping and logistics costs continue to rise, and the COVID-19 pandemic is making significant changes. These factors have all together profoundly affected the development of the agricultural industry, particularly the food industry supply chain, and have threatened global food security, leading to many worries across the world.
Under such backdrop, as a global leader in agricultural technology, how has Syngenta Group performed? What kind of impact will Syngenta Group’s advanced technologies and products, practical experience and management model bring to Chinese agriculture and Chinese farmers? What strategic measures will Syngenta Group take to help address global food crisis? With these questions in mind, let’s have a deep dive into Syngenta Group to get a clearer and better understanding.
Eye-catching business performance and predominant technologies
Sales of Top 4 Global Agricultural Solutions Companies in FY 2021 (Million Dollars)
FY 2021 Sales1
FY 2020 Sales1
BASF Agricultural Solutions
1. Based on the average dollar exchange rate in the initial report of the fiscal year
2. YOY rate of change sales in dollar
3. Bayer CropScience’s EBITDA refers to EBITDA margin before special items; Corteva’s EBITDA is operating EBITDA.
The world’s top four agricultural companies achieved double-digit growth in sales in the fiscal year 2021 against many challenges and adverse situation, with Syngenta Group ranking top with sales of US$28.2 billion up 23% year on year, followed by Bayer CropScience ranking second with sales of US$23.912 billion, Corteva and BASF ranked third and fourth with sales of US$15.655 billion and US$9.659 billion respectively. In terms of growth, Syngenta Group topped with a growth rate of 23%. In terms of EBITDA, Syngenta and Corteva achieved double-digit growth by 14% and 23.4% respectively.
Notably, Syngenta Group has performed exceedingly good to lead the industry in both sales and EBITDA. Its growth is mainly attributed to strong market demand for products and services that could increase agricultural output. Among the four business units of Syngenta Group, Syngenta Group China performed particularly well, with an operating income of US$7.4 billion as an important driver to the overall growth of Syngenta Group. The MAP (Modern Agricultural Platform) business revenue was doubled to US$1.8 billion. MAP provides farmers with modern agricultural technology and service to improve crop quality and increase farmer’s income while reducing greenhouse gas emission. Syngenta Group managed its supply chains in the face of difficult procurement and ongoing logistics challenges to meet grower needs. Synergy-driven sales increased by more than 60 % to more than US$0.7 billion, with a profit contribution of US$300 million.
In addition, Syngenta Group’s leading market share is part of the main drivers behind its fast sales growth. The crop protection business, as the main source of revenue, is the cornerstone and mainstay of Syngenta Group and currently accounts for 24% of the global crop protection market, ranking first in the world. In 2021, Syngenta Group’s crop protection revenue increased by 19% year on year reaching US$13.5 billion. Crop protection sales grew 11% in Europe, Africa and the Middle East, 14% in North America, 26% in Latin America, 19% in Asia Pacific (excluding China) and 27% in China. ADAMA’s sales increased by 24% year on year, reaching US$5.8 billion. Sales increased 4% in Europe, 18% in North America, 17% in Latin America, 14% in India, the Middle East and Africa, 16% in Asia Pacific (excluding China) and 59% in China. The sales increase was attributable to the acquisition of Huifeng Crop Protection completed in the second quarter of 2021. In 2021, Syngenta’s seed business increased by 24% year on year, reaching US$4.1 billion. The field crop sales increased by 8% in Europe, Africa and the Middle East, 5% in North America, 26% in Latin America and 6% in Asia Pacific (excluding China).
The world’s top four agricultural giants have also announced earnings performance of the first quarter of 2022, during which they maintained strong growth momentum. Syngenta Group’s first-quarter sales was US$8.9 billion, up 26% year on year, while EBITDA was US$1.9 billion, up 25% year on year. Its growth was mainly attributed to the high demand for products and services as well as the strong growth of Syngenta Group China, including the growth of the innovative solutions that help farmers increase crop yield and combat climate change. Bayer CropScience’s sales increased 21.6% (exchange rate adjusted and assets restructured) in the first quarter, reaching EUR 8.447 billion, while EBITDA grew 49.9%, reaching EUR 3.669 billion. Its growth was mainly attributed to the substantial price rise and volume increase, especially the robust growth of herbicides and fungicides. Corteva’s first-quarter sales increased 10%, reaching US$4.601 billion, while EBITDA was US$1.04 billion, up 15% year on year. Its growth was mainly attributed to the substantial price rise and volume increase as well as the restructuring within the company and the growth of new products. BASF agricultural solutions’ sales in the first quarter of 2022 increased 19.4%, reaching EUR 3.397 billion. Its sales increased in all regions except North America, as driven by the increased prices and the positive exchange rate.
In the first quarter of this year, Syngenta Group maintained good performance. In particular, Syngenta Group China achieved sales of US$2.4 billion, up 25% year on year. Sales from MAP and digital agriculture was doubled, reaching US$650 million. By the end of the first quarter of 2022, the total number of MAP centers nationwide reached 514 (an increase of 149 over the first quarter of 2021), whilst the average operating income increased by 57% year on year.
In the same period, Syngenta Crop Protection sales increased by 25% year on year, reaching US$4.2 billion. Sales in Europe, Africa and the Middle East grew 8% and 5% in Asia Pacific (excluding China). Driven by exceptional demand, sales in Latin America increased 70%; North America 43%; and China 46%.
ADAMA sales grew 28% in the first quarter to US$1.8 billion, helped by early demand. Sales in Europe grew 6%; North America 47%; Latin America 28%; India, Middle East and Africa remained flat; Asia Pacific (excluding China) grew 25%. In China, sales doubled. Higher selling prices offset raw material, logistics and energy cost increases as well as negative currency effects.
In the first quarter of 2022, Syngenta Seeds sales grew 15% to US$1.4 billion. Field crop sales in Europe, Africa and the Middle East grew by 10%; North America 5%; Asia Pacific (excluding China) 65%; and China 53%. Sales in Latin America doubled, driven by higher corn sales across the region.
Syngenta Group China, consisting of seeds, crop protection, crop nutrition, MAP and digital agriculture in China, achieved sales of US$2.4 billion in the first quarter of 2022, up 25% compared the first quarter in 2021. Syngenta Group China, adjusting for a new way of nitrogen distribution, saw an underlying growth of 42%. Syngenta Group China’s crop protection business sales increased 20%. Sales of seeds in China, including vegetables, grew 53% driven by the launch of new rice varieties. Crop nutrition sales were 7% lower, due to focus on higher margin specialty products. Adjusting for the new way of nitrogen distribution, crop nutrition saw growth of 23%. MAP sales more than doubled. In March, MAP published its second green development annual report, highlighting that the green development index of MAP farmers in China was 53% higher than for non-MAP farmers in 2021. ADEPIDYN® technology received an award from China’s Ministry of Agriculture and Rural Affairs for helping farmers in China. It requires about 30% lower quantity while increasing yields by 18% on average. Syngenta Group China’s innovative smart fertigation solution strengthened its position. The solution reduces labor up to 90% while improving the efficiency of both irrigation and fertilization by up to 50%.
Mergers and acquisitions create an ″agricultural giant″ to promote transformation and upgrading of Chinese agriculture
In 2017, ChemChina (now merged with Sinochem and formed a new company Sinochem Holdings Corporation Ltd) completed the acquisition of Syngenta. This is not only of great significance to Syngenta but is also an important milestone in China’s agricultural modernization. Syngenta Group, known as the ″agricultural giant″, achieved sales of US$23.1 billion in 2020, of which the two business units (Syngenta Crop Protection + Syngenta Seeds) achieved sales of US$14.287 billion, accounting for roughly 62% of the total sales of Syngenta Group.
Syngenta Group has a rich product and business portfolio and is an industry leader in the global agricultural industry, possessing distinctive resources and advantages in the Chinese market with great potentials of growth. Syngenta Group ranks first in the global crop protection sector and ranks third in the seed industry, whilst its digital agricultural operation is in a leading position within the industry. In China, Syngenta ranks first in the crop protection sector, ranks second in the seed industry and ranks first in crop nutrition, being China’s modern agricultural service leader. In the field of crop protection, the company owns a broad active compound and off-patent compound portfolio, with a most extensive product line and a leading capacity for production and supply of technicals; in the field of seeds, Syngenta Group owns rich germplasm resources and patent reserves, cutting-edge breeding technology and innovative research and development strength. The company’s seed business complements effectively to its other businesses, which may create new opportunities in the Chinese seed market, and thus, will continue to increase the competitiveness and market share of the company.
Although China’s agricultural production is already mechanized, the development model is inefficient, with unbalanced industrial structure, non-standardized production and marketing order, where the agricultural economic benefits and production efficiency are low while resource distribution and ecological protection are not good enough. At present, agricultural modernization still faces lots of challenges. For China to realize the objective of switch from a big agricultural country to a strong agricultural country, it is necessary to make continuous improvement to the supply capacity and the competitiveness in agriculture, the capability of technical innovation and sustainable development of agriculture. Moreover, the advanced agricultural technology, management concept and the digital agriculture practices are undoubtedly desired tools to solve the pain points of agricultural production. Syngenta Group has its rich practical experiences in agricultural innovation, digital agriculture, green and low-carbon development, being undoubtedly a pioneer in China’s agricultural reform, while assuming responsibilities for promotion of China’s agricultural modernization and rural revitalization.
It is expected that Syngenta Group’s strengths in technical innovation, the rich and differentiated product line and the digital agriculture, as well as the company’s plenty of advanced and practical management experiences accumulated from various regions of the world, will help China effectively improve the agricultural production efficiency and help farmers increase yield and earnings, which will contribute to safeguarding China’s food security, agricultural modernization and sustainable development.
With innovative technologies to empower agriculture, Syngenta Group joining hands with all parties to cope with the challenges of global food security
In addition to empowering the transformation and upgrading of Chinese agriculture, Syngenta Group plays a pivotal role in the development of global modern agriculture. The global food supply chain is now affected by the continuous spread of the COVID-19, the frequent occurrences of extreme weather, the conflict between Russia and Ukraine, the energy crisis and other factors. Today, trade protectionism becomes increasingly apparent, international food prices continue to soar and global food security is confronted with serious challenges, having aroused great concerns of all parties. Hence, joint safeguard of global food security has become a key task in the global economic governance. Recently, the World Bank estimated that for every 1% increase in global food prices, nearly 10 million people will get trapped in ″extreme poverty.″ In particular, the dependence rate of nearly 30 countries in West Asia and North Africa on supply of wheat from Russia and Ukraine exceeds 50%. The Food and Agriculture Organization of the United Nations and the World Food Programme recently released a warning on the global food insecurity. According to the report, the current global agriculture and food system are being impacted, with dozens of countries facing instability and millions of people being trapped in poverty and hunger. The report calls for urgent humanitarian action to save lives, livelihoods and to prevent famine in 20 focal regions around the world where hunger is likely to worsen from June to September this year.
In face of the challenges to the global food security, at the World Economic Forum in Davos-Klosters, Switzerland, from 22 to 26 May, Syngenta Group CEO Erik Fyrwald called for multi-organizational and cross-sectoral collaborative actions. Meanwhile, Erik said that climate change is one of the factors that triggers the food security crisis, and agriculture can provide effective solutions to both, to help cope with some of the challenges through science, technology and regenerative agriculture.
Moreover, Erik shared Syngenta’s specific initiatives and outstanding achievements in safeguarding food security.
Syngenta Group helps farmers grow crops scientifically, such as to cover cropland in winter with straw (other than burning of straw) to keep carbon inside the soil and to maintain soil fertility while reducing greenhouse gas and ploughing. Syngenta Group owns 1,600 demonstrative plots of cropland, using such kind of planting methods and technologies. In a few years, significant output increase has become evident, with a 33% reduction in greenhouse gas emission and significant reduction in the use of fertilizers and pesticides. Facts and figures have proven that this approach not only protects soil health and ensures the nutritional value of crops, but also helps mitigate climate change and reduce carbon emission.
In the meantime, Syngenta Group is promoting this regenerative farming mode, especially in China, to help Chinese agriculture transform and upgrade rapidly, which will become good examples for the rest of the world as how to ensure food security. Syngenta Group’s demonstrative farms have demonstrated the benefits of winter fallow and land fertility to the soil and for safeguarding food security and fighting climate change.
Syngenta Group’s MAP centers are typical cases, where the company collaborates with more than 100 organizations to help farmers achieve modernized cropland management via new and sustainable solutions, such as the selection of the most suitable seed, fertilizer and crop protection product. Through the process, carbon is sequestrated in the soil using scientific agricultural tools and technologies, which can increase yield while maintaining crop nutrition and soil health. Syngenta also connects farmers with reputed farm product buyers, helping farmers earn money and buyers get their favorite farm product.
Furthermore, Syngenta launched its MAP beSide traceability platform, where consumers, by simple scanning of the QR code on the outer packing of premium products like the tomatoes and potatoes, can see photos of farmer’s growing activities and access to information with respect to the sustainable growth of the products, as well as how these products contribute to mitigation of climate change and reduction of greenhouse gas emission.
In light of the importance and urgency of safeguarding the global food security, the top management of Syngenta Group calls for governments, non-profit organizations, retailers, growers and food companies, the entire industry supply chain, to join hands and work together to help farmers increase production and provide the world with enough food to combat the two major challenges - food crisis and climate change.