Sales Performances, Innovative Solutions and Transformative Strategies of Big 6 in LATAM

The agricultural sector in Latin America, particularly Brazil, faced significant challenges in 2023, which had notable impacts on major agribusiness companies. The market was characterized by high channel inventories, leading to reduced demand and lower sales volumes. Brazil specifically faced drought conditions, affecting crop production. Economic factors played a role as well, with Argentina continuing to face difficulties including hyperinflation and currency controls. Credit availability was constrained in some areas. These conditions affected the performance of companies in various ways. However, the region remains a crucial market for major agrochemical companies, with opportunities for growth and product innovation despite the cyclical challenges.

The Latin American crop protection market, accounting for 29% of the global market share, experienced a slight decline. Despite declining prices of key agrochemicals like glyphosate and glufosinate, prices remained robust during the product purchasing window. Market growth was driven by expanded planted areas for most major crops and increased pest pressure in northern regions with wetter conditions conducive to disease development. Other significant markets such as Chile, Colombia, and Bolivia generally experienced positive agricultural conditions, while Paraguay and Mexico faced dry conditions.

Performance Analysis of the Big 6

Looking at the performance of the top six multinationas, in fiscal year 2023, these companies all experienced negative growth in revenue in the Latin American region. Except for Bayer Crop Science, the remaining companies showed double-digit negative growth rates, with Corteva and FMC experiencing more significant declines in performance. Although the overall substantial decline in revenue in the Latin American region affected the proportion of some companies' regional business revenue in their overall business, this region remains one of the most important markets for them. The revenue of Syngenta, UPL, and FMC in this region still accounts for the highest proportion among global business regions.

Table 1: 2023 Performance of big six multinationals in Latin America

In 2023, the global crop protection market faced tremendous destocking pressure due to inventory accumulation in previous years and a significant increase in interest rates. The resulting demand contraction led to a decline in global sales volume and prices, especially in the Latin American region. Syngenta reported a 14% sales decline at constant exchange rates, with both prices and volumes affected. Syngenta's crop protection business in the Latin American region saw an 11% decline in sales, mainly due to decreased sales volumes of herbicide products such as GESAPRIM^®, TOUCHDOWN^®, and GRAMOXONE^®. The company's new insecticide PLINAZOLIN^® technology showed strong sales, but it was difficult to offset the impact of weak sales of older products. Syngenta's seed business declined by 16% due to lower corn and soybean sales volumes.

Among the six major companies, Bayer Crop Science experienced the smallest sales performance decline in this region, at only 4.9%. The company's fungicide and insecticide products saw an increase in sales volume. The soybean seed and traits business also grew due to higher licensing income.

FMC experienced a 35% organic revenue decrease in Latin America due to channel destocking and drought in Brazil. BASF saw lower volumes across all indications and negative currency effects, particularly from the Argentine peso. Corteva, however, achieved price increases in corn and soybeans, with volume gains in Latin American corn. UPL noted a strong agricultural economy in Brazil, where price declines were not fully felt during crop protection product purchasing times. 

Differentiated Strategy Driven by New Molecules and Biologicals

Providing innovative, differentiated solutions to target markets has always been an important strategy for multinationals to maintain market leadership. As Bayer mentioned in its annual report: "We are active in regulated and highly profitable businesses that are driven by innovation and in which we have the objective to grow ahead of the competition. In this dynamic environment, the speed and scale of innovation and a focus on sustainable results for our customers are crucial factors for success." From the table compiled by AgroPages below, we can observe that in the Latin American region, the innovative and differentiated products launched by these companies are reflected in two main directions: new molecules and biological products.

Table 2: Products introduced recently by big six multinationals in Latin America

In terms of promoting products based on new molecules, Syngenta is quite a representative. The company mentioned in its annual report that its fungicide business sales grew by 7%, mainly benefiting from its ADEPIDYN technology (pydiflumetofen). The company's another innovative insecticide, PLINAZOLIN^® technology (isocycloseram), achieved strong growth in the Latin American region. From Table 2, we can learn that Syngenta launched MIRAVIS^® Pro, a combination product based on ADEPIDYN, in Brazil. Combining the excellent preventive effect of ADEPIDYN^® with the curative effect of protioconazole enhances soybean target spot control in high pressure environments. In addition, the company also launched a series of products based on PLINAZOLIN in Brazil: Joiner, VERDAVIS, and SPONTA. Joiner is an acaricide insecticide for coffee and fruits and vegetables, characterized by high-performance control effects, fast action, and long control periods. SPONTA is an insecticide specifically designed for cotton cultivation, using a high-concentration modern formulation based on PLINAZOLIN technology, and brings the 'More Weevil' concept, reaching a new level of control for weevils, mites, and thrips. VERDAVIS is a combination product of PLINAZOLIN and high-efficiency lambda-cyhalothrin, specially used for difficult-to-control pests in corn and soybean crops. PLINAZOLIN is a product that Syngenta has high hopes for, with plans to promote it to more than 40 countries and regions, applying to more than 40 crops, and its annual peak sales are expected to exceed $500 million.

Compared to the rare new pesticide molecules, new products in the biological field show a flourishing scene, with various companies launching some new products in the Latin American market. UPL is focusing on two categories: bioinsecticides and bionematicides, launching Zebu and Tackler. The Metarhizium anisopliae strain in the Zebu product was developed by a research institution and has excellent application effects on pasture. Its target pests include root froghopper, pasture froghopper and grassland froghopper. Tackler is a product based on Beauveria bassiana, mainly recommended for combating whitefly, corn leafhopper, wireworm, coffee borer and sugarcane weevil.

Another product worth paying attention to is Nimaxxa, which UPL claims is the first biostimulant bionematicide approved in Brazil. Nimaxxa is formulated from Bacillus paralicheniformis, isolate CH2970 + Bacillus paralicheniformis, isolate CH0273 + Bacillus subtilis, isolate CH4000. Nimaxxa, once applied, can quickly colonize the roots, forming a biofilm (a biological barrier) that lasts throughout the crop cycle, protecting the plant against major nematodes -- such as cyst nematodes, root-knot nematodes, and lesion nematodes. UPL points out that these biological products greatly enrich the company's Natural Plant Protection (NPP) portfolio.

UPL’s Nimaxxa is the first biostimulant bionematicide approved in Brazil

Similarly, Syngenta has also launched some important biological products in the Latin American market, among which the most notable is RIZOLIQ^® UHC. RIZOLIQ^® UHC benefits from a liquid formulation, enriched with Bradyrhizobium diazoefficiens resistance technology. This product stands out for being the only liquid inoculant capable of offering a pre-inoculation window of up to 90 days while combining the highest concentration on the market with the latest technology, to guarantee superior nodulation and a significant increase in biological nitrogen fixation.

Syngenta liquid inoculant RIZOLIQ^® UHC

Transformative Strategies and Future Priorities

The agricultural industry in Latin America is undergoing a significant transformation, with major multinational companies adopting several key strategic directions to capitalize on emerging opportunities and address evolving challenges.

One of the most prominent trends is the expansion of biological and sustainable solutions. Companies are increasingly focusing on developing and promoting products that are environmentally friendly and align with the growing demand for sustainable agriculture. UPL, for instance, has set an ambitious goal to generate 60% of its revenue from biological products, natural origin solutions, and premium products. This shift reflects a broader industry move towards more sustainable farming practices. Similarly, FMC is strengthening its biological business in Brazil by establishing a dedicated organization and appointing new leadership. This strategic move demonstrates FMC's commitment to expanding its presence in the biological sector, recognizing the growing importance of these solutions in modern agriculture. 

Bayer's Climate FieldView expands rural producers' access to digital tools

Digital agriculture and technology integration form another crucial strategic direction. Companies are heavily investing in digital platforms and technologies to enhance farming efficiency and decision-making. Bayer's Climate FieldView platform is a prime example of this trend. By expanding its compatibility to include Android devices, Bayer is significantly increasing the accessibility of its digital farming tools to a broader range of farmers. This move recognizes the importance of smartphone technology in modern farming and aims to democratize access to advanced agricultural data and analytics. BASF is also at the forefront of this digital revolution with its xarvio FIELD MANAGER platform. The company is focusing on digitalization as a key disruptor in agriculture, promoting tools that allow for more precise and data-driven farming practices. Syngenta's development of AI-powered solutions like Nema Digital for crop management further illustrates the industry's push towards advanced technological integration in agriculture.

Syngenta presents Nema Digital AI solution at Agrishow 2024

Strategic acquisitions and partnerships represent another key direction for these multinational companies. This approach allows them to quickly expand their market presence, access new technologies, and strengthen their distribution networks. Syngenta's acquisition of Produtécnica is a clear example of this strategy, enabling the company to enhance its distribution capabilities in key Brazilian states. UPL's partnership with Bunge and Global Capital Fund to launch Sinova, a new agri-input distributor, demonstrates how companies are collaborating to create more robust and efficient distribution channels. These partnerships allow companies to leverage each other's strengths and create synergies in a competitive market. BASF's collaboration with independent agronomic consultancies through its xarvio Agro Experts program shows how companies are also partnering with local experts to increase the adoption of their technologies and provide better support to farmers.

BASF launches new xarvio Agro Experts program in Brazil

The focus on research and development is another critical strategic direction. Companies are investing heavily in R&D to develop innovative solutions and stay ahead in a rapidly evolving market. UPL's inauguration of a Global NPP Research Center in Mexico underscores the company's commitment to advancing natural solutions through scientific excellence. This state-of-the-art facility serves as a hub for researchers and fosters collaborations with universities and research centers, driving innovation in sustainable agriculture. Similarly, FMC is investing in research programs across Latin America, including partnerships with universities and research institutions. These collaborations allow companies to tap into local expertise, conduct field trials in relevant environments, and develop solutions tailored to the specific needs of Latin American agriculture.

UPL Ltd announced the opening of its Global NPP Research Center in Ramos Arizpe, Mexico

These strategic directions reflect the agricultural industry's response to changing market demands, regulatory environments, and technological advancements. By focusing on biological solutions, digital integration, strategic partnerships, and robust R&D, these multinational companies are positioning themselves to lead the transformation of agriculture in Latin America towards a more sustainable, efficient, and technologically advanced future.

Outlook

The end grower market in 2024 is expected to remain soft as the full impacts of falling agrochemical prices are felt in Latin America. Lower areas of certain key crops, such as maize in Brazil, are expected to impact the market. Weather conditions are affecting Brazil, although rust pressure is higher than the previous year.

The global crop protection market is poised for a modest recovery in 2024, with steady low single-digit growth expected in the second half of the year as channel inventories normalize. However, destocking pressures and high channel inventory levels are anticipated to weigh on market performance in the first half of 2024. Over the longer term (2023-2028), the crop protection market in Latin America is projected to grow at an annual average rate of 2.4%.

Key factors affecting the 2024 grower market include: low agrochemical prices, declining commodity prices and grower incomes and logistical issues in certain key shipping locations.

Despite challenges, the gradual mitigation of excess channel inventory is expected to lead to better sell-in to the distribution market for manufacturers, improving as the year progresses. Companies are aligning their inventory levels with market demand and stimulating growth by introducing new products. However, the market is expected to remain price competitive with new Chinese entrants.

Syngenta expects the impact of channel inventory reduction to be less significant in 2024 compared to 2023. They note that prices of non-selective herbicides are expected to be more stable in 2024. Field crop seed sales prices and costs are anticipated to have stabilized. Traded prices of key crop commodities, which affect farmer profitability and product usage, have decreased from mid-2022 peaks but are around early 2021 levels for corn and soybean.

BASF anticipates that agricultural production growth in South America will slow slightly overall in 2024. They note significant variation by country, expecting growth in Brazil to weaken after a strong previous year, while growth is anticipated to pick up in other countries in the region.

This story was initially published in the 2024 Latin America Focus. Download the magazine to read more stories.

Please contact Christina Xie at christina@agropages.com if you would like to share your company story, contribute articles or advertising with AgroPages.