Articles from Auriga Magasinet No. 3, November 2005
North America a key market for Cheminova
Biotechnology is gaining ground in the USA and Canada. This has a bearing on sales of glyphosate where Cheminova has a strong position in both markets.
“We continue to enjoy a strong position in the North American market.We have had several good years with satisfactory sales of malathion, methyl parathion and dimethoat, while sales of glyphosate in recent years have grown significantly. We see new opportunities in the product flutriafol, which is used to fight the much-feared Asian rust fungal infection in soybeans. Several new products are in the pipeline at Cheminova, and all these factors mean that we are well-geared to tackle the intensifying competitive situation which currently characterises the industry,” says Steve Greenfield, President of the American subsidiary. He emphasises the fact that it is decisive for Cheminova’s continued success in North America that the company has a strong product programme and an effective organisation with close contact to end-users.
“We see increasing concentration with ever larger companies in the agrochemical industry. Cheminova therefore needs to be in a position to supply the required products fast and in the right quality – and farmers often want to have several different products at their disposal when pests attack their crops. Over the years, we have established good contacts via the different sales channels to end-users, and I see this factor as being extremely important in the current situation where several generic manufacturers of, for example, glyphosate are active in the market,” says Steve Greenfield.
Food production in North America involves the individual farmer using various plant
protection products against many pests. Biotechnology is becoming increasingly
widespread, in soybeans in particular.
A broad platform
With the advance of biotechnology, sales of glyphosate increase, and this happens at the expense of the so-called selective herbicides. Sales of certain conventional insecticides are also being impacted, but there will still be a need for both selective herbicides and insecticides for a variety of purposes.
“GMO crops tolerate glyphosate. Today, almost 95 per cent of all soybeans in the USA are grown as GMO crops, and the trend is becoming the same for maize and cotton. It makes the work in the fields and cultivation far easier as the farmer sows the crops straight into the stubble field after it has been treated with glyphosate. The treatment is repeated one or two times during the growing season, making cultivation far simpler,” explains Terry Baker, Business Development Director at Cheminova Inc. In terms of volume, glyphosate has therefore become a major product with several suppliers, and the growing competition puts pressure on prices.
“Cheminova is a unique manufacturer offering a range of high-quality products. It is important to develop new and improved products, but also to stick to the good and familiar business areas. In farming circles in the USA everyone knows Cheminova – and people understand what we stand for. This gives us a strong platform and puts us in a good position for the future. In light of the increased competition, we must act better and faster in responding to changes. This places considerable demands on everyone in the organisation – both at the company headquarters in Denmark and here in the USA,” says Terry Baker.
The main crops in North America can roughly be split up into three belts – with large
cotton-growing areas in the south, soybeans and maize in the Midwest and various
grain types in the north. Additionally, speciality crops are grown in California and
along the East Coast. The USA is the world’s largest agricultural producer.
The most important crops
Cheminova Inc. has its head office in Wayne, New Jersey – and it is from there Cheminova manages its activities both in the USA and Canada. The products are supplied from the factory in Denmark to end-users via storage facilities located at various sites in America. Most of the products are transported in large trucks, with logistics being monitored from the office in New Jersey.
“The main crops in North America are cotton in the south, soybeans and maize in the Midwest and the wheat-growing areas further north. Then there are the vegetable-growing areas as well as those with sugar cane and smaller crops such as wine and tobacco etc. Measured by volume, glyphosate is undoubtedly the biggest product on the US market, the world’s largest, with sales worth about 7 billion USD. Even though the prices for glyphosate are under pressure, we can still sell all the volumes we stock,” informs Marketing Manager Chris Bowley.
Sales of glyphosate from Cheminova have seen a sixfold increase in just 5 years.
He mentions malathion as another important product for Cheminova, drawing attention to its use in the boll weevil eradication programme, where for many years it was used extensively, while the programme is now approaching a successful conclusion.
Chlorpyrifos is used to fight insect attacks in, for example, soybeans, maize and cotton, and is another example of an important insecticide in Cheminova’s product programme. The product has also proved effective against pests in special crops such as citrus, peanuts and tobacco. Finally, I would like to mention flutriafol, which might well prove to be an important product if the USA suffers a major attack of Asian rust in soybeans, as we have seen in Brazil. It is basically about having a variety of different products available in our portfolio so we can supply just what the individual farmer demands. Competitive prices, products in stock at the right time and a varied portfolio are the most important parameters for Cheminova being able to maintain its strong position in North America in future,” concludes Chris Bowley.
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