Global Seed Treatment Market 2012Global Seed Treatment Market 2012Analysis and Opportunities
A Presentation to:
AgroChemEx 2012Shanghai Everbright Convention & Exhibition Centre
October 20, 2012
www.KlineGroup.com
© 2012 Kline & Company
Today’s presentation
What is the current situation of the global seed treatment market?
What are some important trends driving the global seed treatment market?What are some important trends driving the global seed treatment market?
What is the outlook for the global seed treatment market?
© 2012 Kline & Company 1
Kline is a leading management consulting and market research firm specializing in the chemicals materials and energy sectorsfirm, specializing in the chemicals, materials, and energy sectors
Kline KlineKline Management Consulting
Kline Published Market
Research
Working with individual clients to resolve tough
issues and help implement solutions
Generating information and insights for multiple
clients through syndicated research
Managed flow of people, ideas and
data
© 2012 Kline & Company 2
Specialty pesticides is part of our Chemicals practice
Kline’s Seed Treatment 2012 Global Series is based on in-depth i t i ith t i i t t i d tinterviews with experts in nineteen countries and across ten crops
Region/country n/m
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NORTH AMERICACanada X XMexico X XUnited States X X X X X X X X
EUROPEFrance X X X X X XGermany X X X XItaly X XHungary X X XHungary X X XPoland X XRussia X X XSouth Africa X X X XUkraine X X XUnited Kingdom X X X X
SOUTH AMERICAArgentina X X X XBrazil X X X X
ASIA-PACIFICAustralia X X XJapan X
© 2012 Kline & Company 3
Japan XChina X X X X X XThailand XIndia X X X X X X
Today’s presentation
What is the current situation of the global seed treatment market?
What are some important trends driving the global seed treatment market?What are some important trends driving the global seed treatment market?
What is the outlook for the global seed treatment market?
© 2012 Kline & Company 4
Globally, North America is the largest seed treatment market by sales, and the US the largest single market
Global Overview
and the US the largest single marketSeed Treatment Sales by Region
Share of sales(Value)
Seed Treatment Sales by Country
Share of value
North
Asia-Pacific,
10% 40%
50%
( a ue)
America, 43%Europe-a,
23%
20%
30%
SouthAmerica,
24% 10%
20%
0%
© 2012 Kline & Company 5
a-Includes South Africa
Corn accounts for the largest share of global seed treatment sales
Global Overview
Corn/maize, wheat, and soybeans are the most widely planted crops in terms of
Seed Treatment Sales by Crop
All th
Comments
Share of valuemost widely-planted crops in terms of acreage – accounting for over 70% of acreageAll other crops include rice sunflower potatoes and sugar beets
Cotton, 5%
All others, 8%
rice, sunflower, potatoes, and sugar beetsCorn, 34%
Canola, 6%
Soybeans, 24%
Wheat, 23%
, 24%
© 2012 Kline & Company 6
Fungicides account for the largest share of acreage, but the smallest share of sales
Global Overview
share of salesSeed Treatment Sales by Pesticide Type
Share of sales Share of acreage
Fungicides, F i idInsecticides, or insecticide/Fungicides,
35%
Insecticides, or insecticide/fungicide combo,
Fungicides, 69%
insecticide/fungicide combo, 31%
65%
© 2012 Kline & Company 7
Carbendazim is the leading active ingredient sold, measured by i ht
Global Overview
weight
Share of sales(Quantity of active ingredient)
Seed Treatment Sales by Active Ingredient
Many active ingredients are sold in combination with other active ingredients
Comments
30%
40%
(Qua t ty o act e g ed e t) combination with other active ingredientsSeven active ingredients account for two-thirds of salesThe top four active ingredients account for o er 50% of sales
20%
over 50% of sales
10%
0%
© 2012 Kline & Company 8
Leading suppliers to the market are concentrated, with two players accounting for more than 50% of sales combined
Global Overview
accounting for more than 50% of sales combined
Syngenta and Bayer have maintained their traditional leadership positions
Seed Treatment Sales by Company Comments
Share of valuetraditional leadership positionsThe top four players account for over 80% of sales in 2011All others include nine other named pla ers incl ding N farm D pont andSyngenta,
All others, 18%
players, including Nufarm, Dupont, and others, and account for 6-7% of sales
y g ,31%
Monsanto, 10%
Bayer, 31%
BASF, 11%
© 2012 Kline & Company 9
Today’s presentation
What is the current situation of the global seed treatment market?
What are some important trends driving the global seed treatment market?What are some important trends driving the global seed treatment market?
What is the outlook for the global seed treatment market?
© 2012 Kline & Company 10
Increasing interest in risk protection is a key driver of demand in seed t t t d i i l t b hi h i t t l l
Market Drivers and Trends
treatment, driven in large part by higher investment levels …Driver Description Impact
Prices of seeds increasing in individual crop segmentsSeeds a major input cost
Farmers reducing seeding ratesIncreasing importance of seed treatment to prevent plant loss
Higher seedcosts Seeds a major input cost to prevent plant loss
Weather and crop prices increasingly volatileFarmers increasingly risk averse
Growing interest in practices to reduce risk, e.g., adapting to weather conditions after sowing that make seedlings more
costs
Volatility in prices and Farmers increasingly risk averse g g
vulnerable to soil diseases and insects
Steady increase in farm sizes leads to new management practicesFarmers planting earlier to sow all their
Increasing seedling damage potentialmakes risk management increasingly important
Increasing farm sizes
pweather
Farmers planting earlier to sow all their acreage, but conditions not optimal (e.g. cool, wet conditions)
importantYoung seedlings need protection against pathogen and insect attack
Crop rotation has been the traditional means of reducing soil pathogens
Greater build-up of pathogens increasing the risk of seedling loss
farm sizes
Shortening g p gIncreased pressure on crop land, and greater focus on prices of crops
g gShortening crop rotations
© 2012 Kline & Company 11
… and increasingly enabled by suppliers and other players along the l h i
Market Drivers and Trends
value chainDriver Description Impact
One product (multi-component) to coverwider range of insects and diseasesTrend to buy hybrid seeds better suited
Opportunity to include, or offer seed treatment as an optionIncreasing
use of multi Trend to buy hybrid seeds – better-suited to treatment – in Europe, US, and Brazil
Seed companies adding value with Increasing application of overtreatments
use of multi-component
Seed companies adding value withunique treatmentsTreaters and retailers investing in seed treatment equipment
Increasing application of overtreatmentsfor control of broader spectrum, or higher level and longer-lasting control in high infestation situationsIncreasing application of base treatments and overtreatments by local
New seed revenuestreams
ytreaters
© 2012 Kline & Company 12
Seed application point differs by crop and is still evolving for top 6 global seed treatment crops
Market Drivers and Trends
global seed treatment crops
Crop seed Traditional seed where applied
Trend in where applied Expected change
Corn Seed company Seed company -Corn Seed company Seed company
Wheat Bin run seed; treated by grower if treated
More certified seed; treated by seed channel
More certified seed, so more channel treating
Soybeans Not treated; nematode resistant seed purchased
Seed companies treating More seed company treatment
Canola Seed channel Seed channel -
Cotton Seed company Seed company plus overtreatment by channel
-
Rice Grower and seed channel Grower, seed companyand channel
-and channel
Potatoes Grower Grower Grower, channel
© 2012 Kline & Company 13
2011 saw a number of new products launches, but basically no new active ingredients
Market Drivers and Trends
active ingredientsCompany Product Description
Adds control of nematodes to existing CruiserMaxx Beans product
New fungicide, part of new class of succinatedyhydrogenase inhibitorsBroad spectrum activity, and particularly effective against Rhizoctoniaeffective against Rhizoctonia
Launches combination product for corn in 2011 – for soybeans and cotton in 2012Clothianidin plus biological combination offers control of early season insects and broadcontrol of early season insects and broad range of nematodesAddition of Votivo increased corn yields by 7.1 bushels/acre
Introduces seed treatment products with pactive ingredients licenced from different manufacturers for use in proprietary combinations in their own seed brands
Expanded to include corn, sorghum, and other
© 2012 Kline & Company
cereals, in addition to barley and wheat
14
Today’s presentation
What is the current situation of the global seed treatment market?
What are some important trends driving the global seed treatment market?What are some important trends driving the global seed treatment market?
What is the outlook for the global seed treatment market?
© 2012 Kline & Company 15
Under our most likely forecast, global sales will grow by 3% per year from 2011 to 2016
Global Outlook
from 2011 to 2016
Baseline growth a result ofE di f d t t t b f
Seed Treatment Market Scenarios
10%4 000Value CAGR
Comments
− Expanding use of seed treatment by farmers, channel and seed companies
− Increased crop acreage− Increased use of higher-value insecticides− Move from generic products to proprietary
10%
3 000
4,000
Move from generic products to proprietary chemistries
Pessimistic cased grounded in− A shift away from biofuel support – lower grain
and oilseed prices lead to reduced planted areaR d i i i l l i d
5.9%
5%2 000
3,000
− Reductions in agricultural price support due economic difficulties in major crop producing countries – farming becoming more cyclical, and lower investment in inputs, by some farmers
Optimistic case driven by3.0%
5%
1 000
2,000
− Faster growth in area planted in lesser developed regions
− Faster uptake of seed treatments in grain crops, especially insecticide seed treatments
− Increased use of high-cost/high-value products0.3%0%0
1,000
© 2012 Kline & Company
Increased use of high cost/high value products (e.g., combinations and/or nematicides)
− Continued strong grain and oilseed markets in the developed regions
16
0%0Pessimistic Likely Optimistic
Canola will experience the fastest sales growth to 2016, while corn will remain the largest crop in terms of sales
Global Outlook
remain the largest crop, in terms of sales
Canola
Seed Treatment Sales Growth by Crop
8% 8%100%
Seed Treatment Sales by Crop
Soybeans
Canola
6% 7%5% 5%
8% 8%
80%
Wh t
Cotton
24%
23% 23%
60%
Corn
Wheat 24% 24%40%
0% 1% 2% 3% 4% 5% 6%
All others34% 32%
0%
20%
© 2012 Kline & Company 17
0% 1% 2% 3% 4% 5% 6%
Sales CAGR 2011-16(Value)
2011 2016
North America will remain the largest region by sales in 2016, but will experience the slowest growth
Global Outlook
experience the slowest growth
10 4% 11 0%100%
Seed Treatment Sales by Region Seed Treatment Sales Growth by Reg.
23.1% 23.0%
10.4% 11.0%
80%
South America
23.5% 25.2%
60%Asia Pacific
43 0%
40% Europe-a
43.0% 40.8%
0%
20%
0% 1% 2% 3% 4% 5%
North America
© 2012 Kline & Company 18
2011 20160% 1% 2% 3% 4% 5%
Sales CAGR 2011-16(Value)
a-Includes South Africa
India will experience the fastest growth, while the Brazilian market will grow its share of sales and the US’s declines
Global Outlook
grow its share of sales, and the US s declinesSeed Treatment Sales Growth by Cty.
India
Seed Treatment Sales by Country
Share of sales(Value)
South Africa
d a
Russia, 3.7% All others,
16%
( a ue)
Canada
Brazil US, 35.8%
China
Canada, 4.0%
Germany,3.5%
Argentina
RussiaBrazil, 22.4%
France, 10.3%
China, 4.7%
0% 5% 10% 15%
France
© 2012 Kline & Company 19
0% 5% 10% 15%
Sales CAGR 2011-16(Value)
Today’s presentation
Thank you for attending today’s presentationThank you for attending today s presentation
© 2012 Kline & Company 20
D t i thi t ti i d fData in this presentation is sourced from:“Seed Treatment 2012 Global Series”
Regional coverage:− North America− Europe and Africa− South America− Asia-Pacific
The report includes:− Estimates of market sizes and outlook for key seed
treatment crops in 19 countries − A highly reliable and independent assessment of the
competitive positions of the major seed treatment suppliers in terms of product sales and market share
− Management-level insights into the reasons for treatment, the key insects and diseases being treated, and the leading products in each segment
− An assessment of strengths and weaknesses for current products and a tabulation of unmet needs provided by our respondents
− An overview of the cultural practices used by
© 2012 Kline & Company
p ygrowers to produce their crops, the role of seed treatment, and opportunities to establish or increase market penetration
21
Kline’s emphasis on primary research and rigorous analysis methodology lt i hi h lit d i i htf l tresults in high quality and insightful reports
PRIMARY RESEARCHUnstructured interviews with:
DealersConsultantsCrop advisorsSeed companiesSeed companiesGrowersDistributorsGovernment agencies
SECONDARY RESEARCHTrade journalsAnalysis of public dataCorporate financial reports and literature Non-confidential data from Kline’s databases
RIGOROUS ANALYSIS/CROSS CHECK
© 2012 Kline & Company
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