Agr Ow' S Complete Guide To Generic Pesticides: V Olume III - Business Strategies (2007 Edition)

Agr
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s Complete
s Complete
Guide to Generic
Guide to Generic
Pesticides:
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V
V
olume III
olume III
Business Strategies
Business Strategies
(2007 Edition)
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Executive Summary Generic Pesticides: Volume III Business Strategies
EXECUTI VE SUMMARY
This report is the third in a set of three investigating the current state of the
generic pesticide industry and market.
This first report contains profiles of 100 of the most important generic
pesticide companies in the world today. The second report contains profiles
of 100 of the most important generic pesticide ais. The third report provides
a detailed analysis of the generic pesticide market and industry, and
explores the forces that will drive the development of the generic pesticide
industry over the next few years. These three reports are updated editions
of reports on the generic pesticide industry that Agrow published first in
1998 and then, as new editions, in 2001 and 2005.
This third report contains an analysis of the generic pesticide market and
industry, building on the information presented in the first two reports. It
includes a complete update on significant changes in the global market since
the previous publication in 2005. It provides a review of the major national
generic pesticide markets and a discussion of the various business strategies
adopted by generic pesticide companies, both in terms of competing with
each other and with the major R&D-based agrochemical companies. The
report also contains an analysis of the ways in which the major agrochemical
companies try to maintain their market share after an ai has come off-
patent, including finding ways to delay the manufacture of the ai by generic
pesticide companies. The report also contains a review of future generic
pesticide targets.
The report explores the current and future forces driving the development of
the generic pesticide industry. Such forces include: the consolidation of the
agrochemical industry and the associated divestment of pesticide products
and businesses; patent issues, especially data protection; ai re-registration
initiatives in the EU and US, and the forced withdrawal of certain generic ais
in these markets; and the efforts of industry associations.
Executive Summary Generic Pesticides: Volume III Business Strategies
Table of Contents Generic Pesticides: Volume III Business Strategies
Informa UK Ltd, December 2007 1 www.agrowreports.com
CONTENTS
CHAPTER 1 OVERVIEW 7
1.1 Background to reports 7
1.2 Outline of Companies report 7
1.3 Outline of Products and Markets report 9
1.4 Outline of Market and Industry Analysis report 10
1.5 Information sources 10
1.6 Introduction to Market and Industry Analysis report 11
1.7 Current state of the global generic pesticide market and industry 12
1.8 Future prospects for the generic pesticide industry 13
CHAPTER 2 INDUSTRY DEVELOPMENTS 200507 15
2.1 Pesticide markets 15
2.2 Mergers & acquisitions 16
2.3 New products 19
2.4 Regulatory issues 20
CHAPTER 3 GENERI C PESTICIDE COMPANIES 27
3.1 Origins of generic companies 27
3.2 Development and growth of generic companies 30
3.2.1 Generic company business strategies 31
3.3 R&D-based company business strategies 38
3.4 Strategies to counter generic competition 38
3.4.1 Patents 38
3.4.2 Legal challenges 40
3.4.3 Price reductions 40
3.4.4 New formulations and mixtures 41
3.4.5 New ais and single isomers 42
3.4.6 Manufacturing processes 43
3.4.7 Controlling raw material supplies 43
3.4.8 Acquiring or forming generic businesses 44
3.4.9 Selling off-patent products 44
3.4.10 Regulatory restrictions 44
3.5 Competition between generic and R&D-based manufacturers 45
3.6 Competition between generic companies 46
CHAPTER 4 GLOBAL GENERI C AGROCHEMICAL MARKET 51
4.1 North America 54
4.1.1 United States 54
4.1.2 Canada 56
4.2 Europe 56
4.2.1 France 59
4.2.2 Germany 60
4.2.3 Italy 60
4.2.4 Spain 60
4.2.5 UK 60
4.2.6 Eastern Europe 61
4.3 Asia-Pacific 61
4.3.1 J apan 61
4.3.2 China 63
4.3.3 India 68
Table of Contents Generic Pesticides: Volume III Business Strategies
4.4 4.4 South America 71
4.4.1 Brazil 72
CHAPTER 5 FUTURE GENERIC PESTICIDE TARGETS 75
5.1.1 Future herbicide targets 75
5.1.2 Future insecticide targets 77
5.1.3 Future fungicide targets 79
CHAPTER 6 ROLE OF INDUSTRY ASSOCIATIONS 83
6.1.1 ECCA 84
6.1.2 CPDA 86
6.1.3 PMFAI 87
6.1.4 CCPIA 88
6.1.5 AENDA 89

List of Tables Generic Pesticides: Volume III Business Strategies
LI ST OF TABLES
Table 1.1 List of profiled generic pesticide companies 8
Table 1.2 List of 100 generic pesticide ais 9

Table 2.1 Country pesticide markets by value ($ million) 15
Table 2.2 Company acquisitions made by generic pesticide companies since 2000 17
Table 2.3 Number of producers in 2005 and 2007 20
Table 2.4 Generic ais approved by European Commission 22
Table 2.5 Generic ais withdrawn by European Commission 23

Table 3.1 Origins of the 100 companies profiled in the first report 28
Table 3.2 Main business strategies adopted by 100 companies profiled in the first
report 32
Table 3.3 Pesticide businesses acquired by generic pesticide companies from R&D-
based agrochemical companies since 2000 36
Table 3.4 Most popular post-patent ais by number of generic manufacturers 48

Table 4.1 Global pesticide sales by region, 2006 ($ million) 51
Table 4.2 Geographical spread of companies profiled in the first report 52
Table 4.3 Top 50 generic pesticide companies by sales 52
Table 4.4 US pesticide sales by crop, 2006 ($ million) 55
Table 4.5 List of European manufacturers profiled in Volume 1 by country 57
Table 4.6 List of Asia-Pacific manufacturers profiled in Volume 1 by country (not
including China and India) 61
Table 4.7 J apanese agrochemical sales by crop, 200506 62
Table 4.8 Pesticide usage in China, 2002 64
Table 4.9 List of Chinese manufacturers profiled in Volume 1 65
Table 4.10 Top five Chinese and foreign pesticide manufacturers by sales ($ million) 66
Table 4.11 List of Indian manufacturers profiled in Volume 1 69
Table 4.12 Top five Indian pesticide producers 70
Table 4.13 List of South American manufacturers profiled in Volume 1 71

Table 5.1 Significant new herbicides reported and commercialised, 19952006 76
Table 5.2 Significant new insecticides reported and commercialised, 19952006 79
Table 5.3 Significant new fungicides reported and commercialised, 19952006 81

Table 6.1 ECCA member companies 84
Table 6.2 List of companies profiled in Volume 1 that are members of the PMFAI 88
List of Tables Generic Pesticides: Volume III Business Strategies

Abbreviations Generic Pesticides: Volume III Business Strategies
ABBREVI ATI ONS
ai active ingredient
BCPC British Crop Protection Council
CFL Coromandel Fertilisers
CPT Chemical Products Technologies
DPPQS Directorate of Plant Protection, Quarantine and Storage (India)
ECCA European Crop Care Association
ECPA European Crop Protection Association
EFSA European Food Safety Authority
EPA US Environmental Protection Agency
FAO UN Food and Agriculture Organization
FIFRA Federal Insecticide, Fungicide and Rodenticide Act
FQPA Food Quality Protection Act
GLP Good Laboratory Practice
GM Genetically modified
ICAMA Institute for the Control of Agrochemicals (China)
ISI Isagro Sipcam International
OECD Organisation for Economic Co-operation and Development
OPP EPAs Office of Pesticide Programs
PMFAI Pesticides Manufacturers and Formulators Association of India
SCFCAH European Commissions Standing Committee on the Food Chain and
Animal Health
TRIPs Trade-Related aspects of Intellectual Property rights
UPL United Phosphorus
WTO World Trade Organization
Abbreviations Generic Pesticides: Volume III Business Strategies
Chapter 1: Overview Generic Pesticides: Volume III Business Strategies
CHAPTER 1
OVERVI EW
1.1 Background to reports
Generic pesticides and the companies that produce them are becoming an
increasingly important part of the agrochemical industry. A combination of
the general decline in the discovery of new pesticide active ingredients (ais)
and the steady loss of patent protection on existing ais means that the
generic pesticide industry is growing faster than the R&D-based
agrochemical industry.
This growth is in terms of both numbers of available ais and total sales.
There are no authoritative figures available for the size of the generic
pesticide industry, but in 1996 it was estimated to account for around 10%
of the global agrochemical industry. Now it is likely to account for 2030%
of the global agrochemical industry, which means that it generates annual
sales of $6,400$9,600 million.
This report is the first in a set of three investigating the current state of the
generic pesticide industry and market. This first report contains profiles of
100 of the most important generic pesticide companies in the world today.
The second report contains profiles of 100 of the most important generic
pesticide ais. The third report provides a detailed analysis of the generic
pesticide market and industry, and explores the forces that will drive the
development of the generic pesticide industry over the next few years.
These three reports are updated editions of similar reports on the generic
pesticide industry that Agrow published first in 1998 and then, as new
editions, in 2001 and 2005.
In this current edition, a generic pesticide company is defined as a company,
or a division of a company, that undertakes as part of its business the
manufacture of pesticide ais for which the patents have expired. In the last
edition of this report, this definition was extended to cover Monsanto, as it
generates the majority of its pesticide sales from post-patent ais, albeit ones
that it developed. However, as almost all the major R&D-based crop
protection companies now generate a great deal of their sales from post-
patent ais, in this edition only pesticide companies producing post-patent ais
that they did not originally develop are included.
1.2 Outline of Companies report
The 100 companies profiled in the first volume are listed in Table 1.1. In
deciding which generic pesticide companies to profile, the main criterion
used was generic pesticide sales, and for the top 50 companies this proved
to be the only necessary criterion.
However, less than 20 generic pesticide companies currently generate
annual sales of over $100 million, while hundreds of companies generate
sales under $100 million (most have sales below $20 million). Deciding
which of these companies to profile proved much more difficult, especially as
sales figures for many of these companies were unavailable. The author
chose the bottom 50 companies based on criteria such as strength of a
companys product portfolio, number of employees, production capacity and
the quality and quantity of information available. Information was obtained
from company web sites, stories that have appeared in Agrow and by
contacting companies directly. As such, the author is confident that the 100
profiled companies provide an accurate picture of the current state of the
generic pesticide industry
Table 1.1: List of profiled generic pesticide companies
Company name Country Company name Country
AgriGuard Ireland Isagro Italy
Agripec Brazil J iangshan Agrochemical China
Agro-Chemie Hungary J iangsu Suhua Group China
AgroDragon China J iangsu Yangnong Chemical China
AH Marks UK J ingma Chemicals China
Aimco Pesticides India Kangmei Chemical China
Albaugh US Kenso Malaysia
Amvac US Lanxi Agrochemical China
Atabay Turkey LG Life Sciences South Korea
Atul India Limin Chemical China
Baocheng Chemical
Industry
China Luxembourg Industries Israel
Baoling Chemical China Makhteshim-Agan Israel
Barclay Chemicals Ireland Meghmani Organics India
Bharat Group India Nagarjuna India
CAC China Nanjing Agrochemical China
CCI Group China Nufarm Australia
Cequisa Spain Nutrichem Laboratory China
Cerexagri US Oltchim Romania
Changqing Agrochemical China Organika-Sarzyna Poland
Changxing Zhongshan China PI Industries India
Chemet Chemicals India Pilarquim Canada
Chemia Italy Pinus Slovenia
Cheminova Denmark PT Petrosida Gresik Indonesia
Coromandel Fertilisers India Punjab Chemicals India
Dacheng Pesticide China Qingfeng Agrochemical China
Dhanuka Pesticides India Quimica Lucava Mexico
Dongbu Fine Chemicals South Korea Rallis India
Excel Crop Care India Red Sun China
Feixiang Chemical China Reposo Argentina
Fersol Brazil Rotam Hong Kong
Fujian Sannong China Sabero Organics India
Gharda Chemicals India Sanonda China
Good Harvest China Shandon Qiaochang
Chemical
China
Green Agrosino China Shandong Vicome Greenland China
Greenchem Industries China Shenghua Biok China
Heben Pesticide China Sinochem Ningbo China
Hektas Turkey Sinon Taiwan
Henglong Pesticide China Sipcam-Oxon Italy
Heranba India Suzhou Worldbest China
Herbos Croatia Taminco Belgium
Hikal India Tecnomyl Paraguay
Hindustan Insecticides India Tekchem Mexico
Hisun Chemical China Tide Group China
Huaxing Chemical China United Phosphorus India
Hui Kwang Taiwan Wangs China
India Pesticides India Xinan Chemical China
Indofil India Yancheng Limin China
Inquiport Venezuela Yongnong Chemical China
Iprochem China Zagro Singapore
IQV Spain Zibo Nab Agrochemicals China
Note: Country refers to location of headquarters of main pesticide business.
Each company profile contains contact details for the company, followed by
a one paragraph overview of the company and its activities. The profile then
consists of: a more detailed description of the company and its background;
a figure for its annual pesticide sales; a list of the main generic pesticide ais
that it manufactures; details on its manufacturing and R&D facilities; a list of
its major joint ventures and agreements with other companies; and a short
section on the companys strategy and outlook. Not all of these sections will
appear in every company profile.
1.3 Outline of Products and Markets report
The 100 ais profiled in the second volume are listed in Table 1.2. The criteria
for selecting these included the number of generic companies manufacturing
each ai, annual sales and usage figures, and how recently the ai lost its
patent protection.
Table 1.2: List of 100 generic pesticide ais
Active ingredient Activity Active ingredient Activity
2,4-D Herbicide ioxynil Herbicide
abamectin Insecticide isoproturon Herbicide
acephate Insecticide kresoxim-methyl Fungicide
acetamiprid Insecticide lambda-cyhalothrin Insecticide
acetochlor Herbicide linuron Herbicide
alachlor Herbicide malathion Insecticide
ametryn Herbicide mancozeb Fungicide
amitraz Insecticide maneb Fungicide
atrazine Herbicide MCPA Herbicide
benomyl Fungicide metalaxyl Fungicide
bensulfuron-methyl Herbicide metamitron Herbicide
bentazone Herbicide methamidophos Insecticide
bifenthrin Insecticide methomyl Insecticide
bromoxynil Herbicide metolachlor Herbicide
buprofezin Insecticide metribuzin Herbicide
butachlor Herbicide metsulfuron-methyl Herbicide
captan Fungicide molinate Herbicide
carbendazim Fungicide monocrotophos Insecticide
carbofuran Insecticide myclobutanil Fungicide
carbosulfan Insecticide nicosulfuron Herbicide
chlorothalonil Fungicide oxyfluorfen Herbicide
chlorpyrifos Insecticide paraquat Herbicide
chlorsulfuron Herbicide parathion-methyl Insecticide
clomazone Herbicide pendimethalin Herbicide
cyfluthrin Insecticide permethrin Insecticide
cyhexatin Insecticide phorate Insecticide
cymoxanil Fungicide phosphamidon Insecticide
cypermethrin (and
alpha-cypermethrin)
Insecticide pretilachlor Herbicide
deltamethrin Insecticide prochloraz Fungicide
dicamba Herbicide profenofos Insecticide
dichlorvos Insecticide prometryn Herbicide
diclofop-methyl Herbicide propamocarb Fungicide
dicofol Insecticide propanil Herbicide
dimethoate Insecticide propargite Insecticide
diuron Herbicide propiconazole Fungicide
emamectin Insecticide pyrazosulfuron ethyl Herbicide
endosulfan Insecticide pyridaben Insecticide
epoxiconazole Fungicide quinalphos Insecticide
ethion Insecticide quinclorac Herbicide
fenoxaprop-P-ethyl Herbicide quizalofop-P Herbicide
fenthion Insecticide simazine Herbicide
fipronil Insecticide tebuconazole Fungicide
fluometuron Herbicide terbufos Insecticide
fluroxypyr Herbicide thiamethoxam Insecticide
fosetyl-aluminium Fungicide thiophanate-methyl Fungicide
glufosinate Herbicide thiram Fungicide
glyphosate Herbicide triadimefon Fungicide
hexaconazole Fungicide trichlorphon Insecticide
imazethapyr Herbicide trifluralin Herbicide
imidacloprid Insecticide ziram Fungicide

Each profile begins with a box detailing the activity and general uses for that
specific ai. The profile then continues with: information on the registration
status of the ai in major markets such as the US and the EU; details on the
generic companies that currently manufacture the ai; and information on the
size of the global market, both in terms of volume manufactured and sales
value. Not all of these sections will appear in every ai profile.
1.4 Outline of Market and Industry Analysis report
The third volume contains an analysis of the generic pesticide market and
industry, building on the information presented in the first two volumes. It
provides a review of the major national generic pesticide markets and a
discussion of the various business strategies adopted by generic pesticide
companies, both in terms of competing with each other and with the major
R&D-based agrochemical companies.
The report then goes on to provide an in-depth analysis of the ways in
which the major agrochemical companies try to maintain their market share
after an ai has come off-patent, including finding ways to delay the
manufacture of the ai by generic pesticide companies.
New in this edition is a chapter exploring the developments that have
occurred in the generic pesticide industry since the publication of the
previous edition of this report in 2005. Topics discussed include mergers and
acquisitions, ais that have lost their patent protection and regulatory
developments.
Other chapters outline ais that are due to come off-patent over the next few
years, highlighting those with the greatest potential for the generic industry,
and give an overview of the activities of the main industry associations for
generic pesticide manufacturers.
1.5 Information sources
A variety of sources of information have been utilised to produce the three
reports. These include: the previous editions of the reports; the internet,
especially the profiled companies web sites; stories that have appeared in
Agrow; and other Agrow Reports. The author has also obtained a great deal
of information and personal opinion from a large number of people working
in the generic pesticide industry throughout the world.
In this way, the author has built up an accurate and detailed picture of the
generic pesticide market and industry, and the challenges that it will face
over the coming few years.
1.6 Introduction to Market and Industry Analysis report
This report contains an analysis of the global generic pesticide market and
industry, including detailed descriptions of the current state of the industry,
the major regional markets and potential future trends and developments.
Chapter 2 contains a review of the important developments that have
occurred in the generic pesticide sector since the last edition of this report
was published in 2005. It also tries to predict what changes and
developments might occur over the next few years. The changes are
grouped into four sections Pesticide markets, Mergers & acquisitions, New
products and Regulatory issues and include topics such as the rise of
United Phosphorus, the generic ais that have received the most interest
from manufacturers over the past two years and the proposed amendments
to the EU pesticide registration directive.
Chapter 3 contains an analysis of the global industry. It starts with an
explanation of the different ways in which generic pesticide companies are
established and then continues with a description of the similar ways in
which they subsequently develop. This tends to involve the companies
gradually evolving from producing bulk technical ais to selling own-brand
formulated products, some of which contain proprietary ais. This is followed
by a detailed discussion of the various business strategies adopted by
generic pesticide companies and also of the various strategies adopted by
the R&D-based agrochemical companies to try to prevent generic companies
from entering the market for a specific ai.
Chapter 4 contains detailed profiles of the major country and regional
pesticide markets, including the US, the EU, China and India. These profiles
contain information on: the size of the pesticide market, including the
market share taken by generic producers; the growth prospects for the
market; the major crops grown and pesticide products used; the major
pesticide companies, both domestic and foreign, that operate in the market;
how pesticide products are marketed and sold in the market; and the
regulatory environment.
Chapter 5 contains details of ais due to come off-patent over the next few
years, including lists of those ais that should prove of most interest to the
generic pesticide industry. These lists were taken from Agrows New
Generics 2007, but they are not identical because some of the ais identified
as new generics were profiled in Volume 1 of this report. This is because
certain fairly new ais are already being manufactured by more than one
generic producer, even though their patents remain in force in most major
markets.
Chapter 6 provides an overview of the main industry associations for generic
pesticide manufacturers, including their structure, membership and main
functions. These comprise: the European Crop Care Association; the US
Chemical Producers and Distributors Association; the Pesticide
Manufacturers and Formulators Association of India; the China Crop
Protection Industry Association; and the Brazilian generic agrochemical
industry association.
1.7 Current state of the global generic pesticide market and
industry
The global pesticide market is essentially made up of sales of two types of
pesticide ais proprietary pesticides and off-patent pesticides. Proprietary
pesticides are those that still have patent protection and so are only sold by
the developing company or approved licensees. Off-patent pesticides are
those that have lost their patent protection and can be sub-divided into two
classes: proprietary off-patent pesticides, which are produced and sold by
the original developing company; and generic pesticides, which are off-
patent pesticides that are produced and sold by companies other than the
original developing company.
Although off-patent products account for the majority of global pesticide
sales (6070%), in many countries, especially developed ones, the R&D-
based agrochemical companies still dominate the market for off-patent
pesticides. This means that generic pesticide producers probably generate
2030% of global pesticide sales, valuing the global generic pesticide market
at $6,400$9,600 million.
However, this share of the global pesticide market, although still minor, has
grown over the past decade, mainly as a result of the generic section of the
pesticide market growing faster than the proprietary section, especially in
countries such as India and China. Indeed, the generic pesticide market is
highly skewed around the world, accounting for a much greater share of the
total pesticide market in developing countries than in developed countries.
For instance, pesticide products manufactured by generic companies
account for around 75% of all pesticide sales in China, but have practically
no market share in J apan.
Markets for both off-patent and proprietary pesticides are also growing
faster in developing countries than in developed ones. This is both because
agricultural practices in developing countries are becoming more advanced,
with growers demanding more and newer pesticides, and because
developed world countries are trying to limit pesticide use, due to increasing
concerns about the effect of pesticides on human health and the
environment. The worlds largest country markets for pesticides, in order of
size, are the US, Brazil, J apan, China and France, with China having recently
overtaken France and, at current growth rates, set to pass J apan within the
next few years.
The largest generic pesticide companies are still mainly based in the
developed world. The one exception is United Phosphorus, which has grown
very rapidly over the past couple of years, mainly as a result of acquisitions,
and is now the worlds fifth largest generic pesticide company based on
sales. It should now rise even further up the list of top generic pesticide
companies as a result of its purchase of Cerexagri in February 2007.
Numerous other companies based in the developing world are also
beginning to take their place among the largest generic pesticide companies.
Both Agripec (Brazil) and Red Sun (China) have recently broken into the top
10 generic pesticide companies by sales, while eight of the 10 companies
taking the places from 11 to 20 are from either India or China. Indeed, a
Chinese company could soon find itself in second position on the list, if
China National Chemical Corporation (ChinaChem) succeeds in its bid to
acquire Nufarm.
Nevertheless, even the largest generic pesticide companies are still much
smaller than the major R&D-based agrochemical companies. For instance,
the top two generic pesticide companies MAI and Nufarm each have a
less than 5% share of the global agrochemical market, while the top two
major R&D-based agrochemical companies Bayer CropScience and
Syngenta each have 1520% shares.
Glyphosate remains by far the largest selling pesticide ai in the world, with
annual sales of around $5,000 million, and is manufactured by a large
number of generic companies. Nevertheless, of the top 10 most
manufactured ais, five of them are insecticides. This reflects the fact that a
large number of generic pesticide producers are based in countries with hot
regions, such as India, where insects are the main crop pest and the
demand for insecticides is great. The other herbicides in the top 10 are 2,4-
D and paraquat, which are both widely used throughout the world, and the
top 10 also contains two of the largest selling fungicides, carbendazim and
mancozeb.
1.8 Future prospects for the generic pesticide industry
Even though it has been an eventful couple of years for the generic pesticide
sector, none of the developments have come completely out of the blue.
Indeed, the major development has simply been a continuation of
something that has been happening for the past few years: the gradual shift
in the focus of the generic pesticide sector away from the developed world
towards the developing world, especially India and China.
This is clearly evident in terms of the generic pesticide industry, with the
rapid rise of United Phosphorus and the bid made by ChinaChem for
Nufarm. But it is increasingly also the case for the generic pesticide market,
which is growing much faster in developing world countries than in the
developed world. Part of this growth is being driven by the fact that many of
these pesticide markets are modernising, with products based on older,
cheaper ais being replaced by those based on newer, more expensive ais.
Much of this modernisation is being driven by the regulatory authorities in
these countries, which are banning or restricting the use of many older
pesticide ais. These moves are likely to have a dramatic impact on the global
generic pesticide industry and on the products that they sell. For many of
these older ais had already been banned in Western markets and so
developing world markets were their only remaining outlets. Now that these
outlets are disappearing, generic pesticide companies in both Western and
developing countries are going to have to make major changes to their
product portfolios.
For instance, Cheminova used to be a major Western producer of
organophosphorus insecticides, but has recently stopped producing many of
these ais. As such, in J anuary 2007, it submitted a plan to the UN Food and
Agriculture Organization proposing to wind down the sale of parathion-
methyl and monocrotophos in developing countries between 2007 and 2010.
Meanwhile, the organophosphorus insecticides methamidophos,
monocrotophos, parathion-ethyl and parathion-methyl accounted for 18% of
the Chinese pesticide market in 2004, but this proportion had fallen to 3%
by 2006 in anticipation of the phase-out of these ais in 2007.
Over the past 10 years, there have been numerous waves of consolidation
within the top tier of the R&D-based agrochemical industry. This has
resulted in a number of pesticide products being divested, many of which
were acquired by generic pesticide companies. There is not much scope for
any further consolidation at the top end of the pesticide industry, but there
is scope for further consolidation in the generic pesticide industry, where
there are a lot of small and medium-sized companies.
Up until 2007, this consolidation had mostly involved the larger, developed
world generic companies, such as MAI and Nufarm, acquiring smaller
competitors from around the world. But this consolidation process has now
led to the acquisition of some of the larger generic pesticide companies, with
United Phosphorus purchasing Cerexagri and ChinaChem making a bid for
Nufarm.
Furthermore, consolidation is also beginning to impact the highly
fragmented Indian and Chinese pesticide industries, with the larger
companies just beginning to make moves on some of the smaller ones. In
both India and China, this consolidation is being partially driven by the move
from older ais to newer ones making life difficult for those smaller
companies that specialised in producing the older ais. But in China this
process is also being driven by the state, which is actively trying to create
large pesticide champions.
So although the future looks fairly healthy for the generic pesticide sector,
with a number of big-selling ais such as kresoxim-methyl and thiamethoxam
just beginning to lose their patent protection, the precise make-up of the
sector looks like it might be changing. More and more developing world
companies are becoming major players, at the same time that developing
world markets are becoming increasingly important. As such, over the next
few years, the generic pesticide industry as a whole will probably start to
place greater emphasis on developing world markets and the kind of
products they demand.
However, with the modernisation of these developing world markets, these
pesticide products could well turn out to be very similar to those that are
already popular in developed world markets.
Chapter 2: Industry Developments 2005-2007 Generic Pesticides: Volume III Business Strategies
CHAPTER 2
I NDUSTRY DEVELOPMENTS 2005 07
Two years may not seem like a long period of time, but it has still been an
eventful one for the global generic pesticide industry. Since the last edition
of this report was published in 2005, the industry has seen: the first generic
pesticide company from the developing world to be included in Agrows
annual list of the top 20 global agrochemical companies; a number of
important pesticide ais, such as the insecticide imidacloprid, lose their patent
protection in major markets; and the introduction or revision of pesticide
regulations in a whole host of countries and regions, including the EU, the
US, China, India and Brazil.
All of these changes are creating both opportunities and dangers for generic
pesticide companies. This chapter will therefore highlight the most important
changes that have occurred over the past two years and assess their
implications for the generic pesticide industry. It will also try to predict what
changes and developments might occur over the next few years. The
changes will be grouped into four sections: Pesticide markets; Mergers &
acquisitions; New products; and Regulatory issues.
2.1 Pesticide markets
Global, regional and country pesticide markets are discussed in detail in
Chapter 4, but this section will look specifically at how the major country
markets have changed over the past two years. The most obvious change is
that China has now overtaken France to become the worlds fourth largest
pesticide market (see Table 2.1).
Table 2.1: Country pesticide markets by value ($ million)
1

Country Market value Year
2

US 6,026 2006
Brazil 3,912 2006
J apan 2,850 2006
China 2,421 2006
France 2,305 2006
Germany 1,373 2005
Canada 1,184 2006
Italy 922 2005
India 880 2006
UK 720 2004
Spain 443 2006
Sources: Various (see Chapter 4).
Note: 1. Only comprises those countries profiled in Chapter 4; 2. Refers to year in which
companys fiscal year ended.
That Chinas pesticide market would overtake that of France has long been
predicted, based on the fact that Chinas pesticide market was growing at a
rate of 79% a year, while Frances has been gradually declining over the
past decade. If Chinas pesticide market continues this growth rate, it looks
set to overtake J apans within the next few years.
In actual fact, the growth rate of Chinas pesticide market could well
increase over the next few years, as a result of the Chinese governments
efforts to encourage growers to switch form older, toxic pesticide ais to
newer, safer ones. For products based on older ais, such as
organophosphorus insecticides, tend to be cheaper than those based on
newer ais, such as pyrethroid or neonicotinoid insecticides.
Indias pesticide market tends to be more variable than Chinas, due to the
countrys erratic weather, but it should still achieve an annual growth rate of
1015% between 2005 and 2010, according to the Pesticides Manufacturers
and Formulators Association of India (PMFAI). There is certainly scope for an
increase in the size of the market: India is one of the largest agricultural
producers in the world and the only country apart from China with a
population over 1 billion, but its pesticide market is currently worth less than
Italys.
This is because agriculture in India is still very old-fashioned, comprising lots
of small farm-holdings that dont use much modern technology, including
pesticides. And the pesticide products they do use tend to be based on older
and cheaper ais. However, this is now beginning to change, partly as a
result of the Indian government encouraging the use of products based on
newer, safer ais and restricting or banning certain older ais, such as the
herbicide simazine, the insecticide monocrotophos and the fungicide
carbendazim.
If the Indian pesticide market does grow at a rate of around 10% a year,
then it should overtake Italys more stagnant market in 2007 and could
surpass Germanys within five years.
The positions of the other main country pesticide markets have remained
the same over the past two years with the US, Brazil and J apan still
making up the top three and this should be the case for the next few
years. However, the Western markets will probably continue to decline
slowly in value, due to a combination of changes in agricultural practices,
regulatory pressures and the uptake of genetically-modified (GM) crops.
The Brazilian market has had a torrid time since 2005, losing an eighth of its
value due to a combination of falling prices, smaller soybean areas, lower
incidences of Asian soybean rust and increased uptake of GM herbicide-
tolerant soybeans. Nevertheless, Brazil remains the second largest pesticide
market in the world and the situation does now look to be improving, with
the Brazilian Institute of Agribusiness predicting that pesticide sales will
increase by 10% in 2007.
2.2 Mergers & acquisitions
As usual, the larger generic pesticide companies have been busy buying
smaller rivals over the past two years (see Table 2.2).
Makhteshim-Agan Industries (MAI) has been concentrating on gaining
greater control of its distribution network, by buying stakes in companies
that distribute its products in foreign markets. In 2005, it acquired a 49%
stake in Mabeno, a Dutch agrochemical distributor, and a 70% stake in
Biomark Tradinghouse, a Hungarian agrochemical distributor. Then, in 2006,
it acquired a 75% stake in Agrovita, a Czech agrochemical distributor. It has
also been actively expanding its non-crop pesticide business. In April 2006, it
acquired a 30% stake in Alligare, a US agrochemical company that
specialises in herbicides for the non-crop weed control market. A month
later, it acquired 60% of the Italian non-crop pesticide company Kollant.
Meanwhile, Nufarm acquired the Colombian agrochemical company
Agroquimicos Genericos in 2005 and the Italian agrochemical company
Agrosol in 2006, in order to increase its presence in these countries. Then, in
May 2007, it gained complete control of Agripec, by acquiring the 50.1%
stake that it didnt already own.
Table 2.2: Company acquisitions made by generic pesticide
companies since 2000
Company Year Acquisition Country
Albaugh 2004 Atanor Argentina
Cheminova 2001 Headland Agrochemicals UK
Cheminova 2001 Servicios Qumicos Integrales Mexico
Cheminova 2003 Flexagri (from Bayer
CropScience)
France
Cheminova 2006 CropTech Colombia
Cheminova 2006 Ospray Australia
Cheminova 2007 Kerolagro Hungary
CFL 2006 Ficom Organics I ndia
Isagro 2001 Caffaro Italy
Isagro 2001 RPG Life Sciences India
I SI 2006 Barpen International (75%) Colombia
I SI 2006 AgroMax (51%) Argentina
MAI 2002 Feinchemie Schwebda Germany
MAI 2004 Control Solutions (60%) US
MAI 2004 FarmSaver.com US
MAI 2004 Farmoz Australia
MAI 2005 Mabeno (49%) Netherlands
MAI 2005 Biomark Tradinghouse
(70%)
Hungary
MAI 2006 Agrovita (75%) Czech
Republic
MAI 2006 Alligare (30%) US
MAI 2006 Kollant (60%) I taly
Nufarm 2001 Agtrol International US
Nufarm 2001 Davison Industries Australia
Nufarm 2002 Crop Care Australasia Australia
Nufarm 2002 Agro Permutadora Portugal
Nufarm 2004 Agripec (49.9%) Brazil
Nufarm 2005 Agroquimicos Genericos Colombia
Nufarm 2006 Agrosol I taly
Nufarm 2007 Agripec (100%) Brazil
UPL 2004 AgValue US
UPL 2005 Cequisa Spain
UPL 2005 SWAL Corporation I ndia
UPL 2005 Reposo Argentina
UPL 2006 Cropserve South Africa
UPL 2006 Advanta Netherlands
UPL 2007 Cerexagri US
Note: Acquisitions since 2005 in bold.
Cheminova has been continuing its efforts to expand its overseas sales by
both establishing foreign subsidiaries and acquiring foreign companies. In
2006, it acquired major stakes in two pesticide distribution and marketing
companies: CropTech in Colombia and Ospray in Australia. Most recently, in
April 2007, it acquired a controlling interest in Kerolagro, a Hungarian plant
protection and nutrition company.
Isagro and Sipcam-Oxon are also looking to expand their overseas sales,
specifically by acquiring distribution networks in South America. To this end,
through their Isagro Sipcam International (ISI) joint venture, they recently
acquired a 75% stake in Barpen International, a Colombian agrochemical
distributor, and a 51% stake in AgroMax, an Argentine pesticide distributor.
But one of the two major developments to have occurred in the generic
pesticide industry over the past two years has been the rapid growth of
United Phosphorus (UPL). Since 2005, it has acquired: the Spanish producer
Cequisa for Euro 11.5 million; the Argentine producer Reposo for $11
million; the Indian agrochemical company SWAL Corporation for $5 million;
the South African agrochemical distributor Cropserve for $3 million; and the
Dutch seed company Advanta. Most recently, in February 2007, it made its
biggest ever acquisition by purchasing the US company Cerexagri, which
was the pesticide business of the French chemical company Arkema, for
Euro 111 million. A few of these companies, such as SWAL, have been
directly absorbed into UPL, but most of them, including Cequisa, Reposo and
Cerexagri, still operate as separate entities.
These acquisitions resulted in massive sales growth for UPL, such that a
company that recorded revenues of $140 million for the year ending March
2002 had increased its sales to $350 million just four years later. This was
sufficient to see UPL become the first developing world pesticide company to
enter Agrows list of the top 20 agrochemical companies in 2006 (at number
18). For the year ending March 2007, it recorded sales of $477 million,
pushing it up to 13
th
place in the Agrow top 20. For the year ending March
2008, UPL will be able to include sales from Cerexagri for the first time,
which should give its revenues another substantial boost.
Other Indian companies are now beginning to follow UPLs lead. For
example, Coromandel Fertilisers (CFL) acquired a majority stake in Ficom
Organics, an Indian producer of technical pesticide ais, in 2006. This
indicates that not only are Indian generic companies beginning to step up
onto the world stage, but that the Indian generic pesticide industry, which
currently comprises around 600 companies, may be starting to consolidate.
Not to be left behind, the Chinese industry, which comprises around 2,500
companies, is also starting to consolidate. At the moment, however, this
consolidation is being almost entirely driven by the Chinese government,
which is concerned that the domestic pesticide industry suffers from too
many companies, production overcapacity and outdated technologies and
products. As a result, the government fears that the domestic industry could
begin to lose out to more innovative Western companies both at home and
abroad. It has therefore launched a five-year development plan (200610)
to reduce the total number of pesticide companies, create a few large
national champions with assets of Yuan 5,00010,000 million and
encourage a greater focus on developing novel products.
This transformation of the pesticide industry forms part of a larger effort to
modernise the whole Chinese chemical sector. In May 2004, the Chinese
government formed the China National Chemical Corporation (ChemChina)
to drive this modernisation. In March 2005, ChemChina announced that over
the next five years it would build up a giant state-owned pesticide group
with annual sales of over Yuan 10,000 million (almost 10 times larger than
the annual sales of Red Sun, which is currently Chinas largest pesticide
company). As a first step, in J une 2005 it took control of Sanonda and then
in October 2006 took a 30% stake in the Chinese company Shandong
Dacheng Pesticides.
But its most radical move came in November 2007 and is the second major
development to have occurred in the generic pesticide industry over the past
two years. In conjunction with the US private equity firms Fox Paine
Management III and the Blackstone Group, it made a Aus$3,000 million
($2,760 million) bid for Nufarm, which is the second largest generic pesticide
company in the world.
Prior to this move, in August 2007, rumours had abounded that MAI was
interested in acquiring Nufarm, but nothing came of it. The Nufarm board
has recommended acceptance of ChemChinas bid, which, if successful,
would result in the first Chinese ownership of a leading agrochemical
multinational.
2.3 New products
Nine of the ten new ais profiled in Volume 2 of this report have only become
generic within the past two years: the fungicides epoxinconaole and
kresoxim-methyl; the herbicides fenoxaprop-P-ethyl, nicosulfuron,
pretilachlor and quizalofop; and the insecticides and acaricides emamectin,
fipronil and thiamethoxam. The exception is the herbicide glufosinate, which
is rather older than the other ais and seems to have become more popular
with generic manufacturers mainly because of the uptake of glufosinate-
tolerant GM crops in an increasing number of countries.
In this case, generic means that they are either beginning to lose their
patent protection or are being produced by generic manufacturers based in
countries where the ai is not protected. Indeed, for ais such as the fungicide
kresoxim-methyl and the insecticide thiamethoxam, the originating
companies are still actively enforcing their patents in most markets. For
example, in J une 2004, Syngenta launched a lawsuit against two Chinese
companies, Yancheng Lvye Chemical Co and its subsidiary Yancheng Yongli
Chemical Co, for illegally producing and selling thiamethoxam. Meanwhile,
both Syngenta and BASF have launched injunctions against generic
companies offering thiamethoxam and kresoxim-methyl, respectively, during
recent British Crop Protection Council (BCPC) conferences.
All of these ais generate substantial sales, which explains why generic
manufacturers are keen to start producing and selling them as soon as
possible. Indeed, the insecticides fipronil and thiamethoxam and the
fungicide kresoxim-methyl have all crashed into the top 10 best selling
generic ais, at numbers three, five and eight respectively. Meanwhile, the
herbicides nicosulfuron and fenoxaprop-P-ethyl and the fungicide
epoxiconazole all generate annual sales of over $200 million.
Meanwhile, the number of generic companies producing certain other fairly
new ais has increased substantially over the past two years, as the ais have
lost their patent protection in more and more markets and generic
companies have developed the necessary production technologies. For
example, the number of generic companies profiled in Volume 1 of this
report that manufacture the insecticide imidacloprid doubled between 2005
and 2007 (from 20 to 40). Other ais that are now manufactured by more
companies include the herbicide imazethapyr, the fungicides propincazole
and tebuconazole, and the insecticides abamectin, acetamiprid and
bifenthrin (see Table 2.3).
Table 2.3: Number of producers in 2005 and 2007
Active
ingredient
Category No. of producers
2005
No. of producers
2007
Imazethapyr Herbicide 7 11
Propiconazole Fungicide 11 23
Tebuconazole Fungicide 5 23
Abamectin Insecticide 7 23
Acetamiprid Insecticide 9 23
Bifenthrin Insecticide 7 12
Imidacloprid Insecticide 20 40
Note: Number of producers taken from the 2005 and 2007 editions of Agrows Complete Guide
to Generic Pesticides.
The trend for some of the larger generic pesticide companies to purchase
licences to certain proprietary ais or to acquire rights to ais that will soon
lose their patent protection has continued to strengthen over the past few
years. For instance, MAI and Nufarm have both acquired licences to the
insecticide imidacloprid from Bayer CropScience, while MAI has also acquired
a license to the fungicide tebuconazole.
Entering into this kind of licensing deal ensures that a generic company
doesnt fall foul of any patents that remain in force. It also often allows the
company either to gain access to the original developers proprietary
manufacturing technology, rather than have to re-engineer the technology
from scratch, or to get the original developer to manufacture the ai for it.
Since 2005, the larger generic pesticide companies have acquired the rights
to a number of ais. For instance, Amvac acquired three pesticide businesses
from BASF: the cereal herbicide Avenge (difenzoquat) and BASFs global
phorate insecticide business in 2005, and its global Counter (terbufos)
insecticide/nematicide business in 2006. These last two acquisitions were
the largest ever made by Amvac. Nufarm acquired BASFs imazamethabenz
herbicide business outside of Europe in 2005, while Cheminova acquired the
remaining global rights to Bayer CropSciences pyrethroid
acaricide/insecticide acrinathrin in 2007 (it had acquired the European rights
in 2003).
But, once again, it is UPL that has been the most extravagant purchaser
over the past couple of years. Since 2005, it has acquired: the systemic
carbamate herbicide asulam and the insecticides oxydemeton-methyl and
trichlorfon from Bayer CropScience for a total of Euro 43.5 million; rights to
DuPonts sulfonylurea rice and aquatic weed herbicide bensulfuron-methyl in
all markets except Asia/Pacific; Dow AgroSciences global propanil herbicide
business for $25 million; and DuPonts fenbutatin-oxide miticide and
triphenyl hydroxide fungicide businesses. These product acquisitions have
clearly helped to fuel its impressive sales growth over the past couple of
years.
2.4 Regulatory issues
As usual, the most important regulatory developments to have occurred over
the past two years have involved the registration of new pesticides and the
ongoing reviews of existing pesticides. In important Western markets such
as the EU and the US the current review programmes are drawing to a close
and regulatory authorities are busy finalising the details of their
replacements. In the developing world, some countries, such as Brazil, have
introduced brand new pesticide registration regulations, which companies
have been trying to get to grips with. In others, such as India and China, the
regulatory authorities have introduced new review programmes under
existing regulations, with the aim of encouraging growers in their countries
to switch from older, toxic pesticides to newer, safer ones.
In the EU, the review programme instigated by the adoption of the pesticide
registration directive (91/414/EEC) in 1991 is still ongoing. This programme
has involved reviewing the registrations for over 800 ais then being sold in
pesticide products throughout Europe, which were divided into four lists, and
was initially meant to have been completed by 2003. But delays and
generally slow progress meant that the deadline for completion had to be
extended to 2008. Even this date may be tricky to meet, seeing as the
European Commission has not yet started making decisions on the ais that
comprise the third and fourth lists.
Of the 100 ais profiled in Volume 2 of this report, 38 have been approved
(not including alpha-cypermethrin and S-metolachlor), 31 have had their
registrations withdrawn and 31 still await decisions (see Table 2.4 and Table
2.5). For 16 of the ais, this exclusion happened after they had been through
the entire review process, because the Commission judged that they posed
too large a risk to human health or the environment. The other 15 ais were
excluded because the sole notifying company decided to stop supporting the
ai. These ais were withdrawn in two tranches: 225 ais from the third list had
their registrations withdrawn on J uly 2003; and a further 106 ais had their
registrations withdrawn in March 2004.
Table 2.4: Generic ais approved by European Commission
1

Active ingredient Activity Date approved
2

2,4-D Herbicide October 2002
Acetamiprid Insecticide J anuary 2005
Alpha-cypermethrin Insecticide March 2005
Bentazone Herbicide August 2001
Bromoxynil Herbicide March 2005
Captan Fungicide October 2007
Carbendazim Fungicide J anuary 2007
Chlorothalonil Fungicide March 2006
Chlorpyrifos Insecticide J uly 2006
Cyfluthrin Insecticide J anuary 2004
Cymoxanil Fungicide March 2005
Cypermethrin Insecticide March 2006
Deltamethrin Insecticide November 2003
Dichlorvos Insecticide J une 2007
Dimethoate Insecticide October 2007
Fipronil Insecticide October 2007
Fluroxypyr Herbicide December 2000
Glufosinate Herbicide October 2007
Glyphosate Herbicide J uly 2002
Ioxynil Herbicide March 2005
Isoproturon Herbicide J anuary 2003
Kresoxim-methyl Fungicide February 1999
Lambda-cyfluthrin Insecticide J anuary 2002
Linuron Herbicide J anuary 2004
Mancozeb Fungicide J uly 2006
Maneb Fungicide J uly 2006
MCPA Herbicide May 2006
Methamidophos Insecticide J anuary 2007
Metribuzin Herbicide October 2007
Metsulfuron-methyl Herbicide J uly 2001
Molinate Herbicide August 2004
Paraquat Herbicide November 2004
Pendimethalin Herbicide J anuary 2004
Propamocarb Fungicide October 2007
Propiconazole Fungicide J une 2004
S-metolachlor Herbicide April 2005
Thiamethoxam Fungicide March 2006
Thiophanate-methyl Fungicide March 2006
Thiram Fungicide August 2004
Ziram Fungicide August 2004
Notes: 1. Limited to those generic ais profiled in Volume 2; 2. Date that ai was formally
included in Annex 1 of Directive 91/414/EEC.
The European crop protection industry has raised concerns about the
number of ais that have had their registrations withdrawn, claiming that
some farmers, especially in the Mediterranean area, are being left without
adequate protection against pests. This loss is being exacerbated by efforts
to speed up the approval process, which some claim is leading to ais being
excluded rather than properly assessed. Hans Mattaar, European regulatory
strategy manager for Bayer CropScience, has warned that the current review
programme could end up removing 7080 per cent of pesticide products
from the European market.
Table 2.5: Generic ais withdrawn by European Commission
1

Active ingredient Activity Date withdrawn
2

Acephate Insecticide March 2003
Alachlor Herbicide December 2006
Ametryn Herbicide J uly 2003
Amitraz Insecticide February 2004
Atrazine Herbicide March 2004
Benomyl Fungicide November 2002
Butachlor Herbicide J uly 2003
Carbofuran Insecticide J une 2007
Carbosulfan Insecticide J une 2007
Diuron Herbicide J anuary 2007
Endosulfan Insecticide December 2005
Ethion Insecticide J uly 2003
Fenthion Insecticide February 2004
Hexaconazole Fungicide November 2006
Imazethapyr Herbicide March 2004
Malathion Insecticide J une 2007
Metalaxyl Fungicide May 2003
Methomyl Insecticide September 2007
Metolachlor Herbicide J uly 2003
Monocrotophos Insecticide J uly 2003
Parathion-methyl Insecticide March 2003
Permethrin Insecticide December 2000
Phosphamidon Insecticide J uly 2003
Profenofos Insecticide J uly 2003
Prometryn Herbicide J uly 2003
Quinalphos Insecticide J uly 2003
Quinclorac Herbicide March 2004
Simazine Herbicide March 2004
Terbufos Insecticide J uly 2003
Triadimefon Fungicide March 2004
Trichlorphon Insecticide May 2007
Notes: 1. Limited to those generic ais profiled in the second report; 2. Date that Annex 1 non-
inclusion came into force.
In addition to the ongoing pesticide review programme, the Commission has
been busy drawing up proposed amendments to 91/414. These include:
implementing a scheme to ban ais based on hazard criteria, which means
that if an ai exceeds just one hazard cut-off value than it would be excluded;
removing any protection for new data generated for the review of existing
ais and products; approving pesticide products for geographical zones rather
than individual countries; and introducing measures to speed up the
approval process.
The Commission produced the final version of its proposed amendments in
J uly 2006 and this was then debated by the European Parliament at the end
of October 2007. The Parliament approved the data protection and hazard-
based criteria proposals but rejected the zonal approval system. The
amendments will now progress to the EU Council of Ministers for
consideration and should come into force in 2008 after the current review
programme for existing ais has been completed.
In the US, pesticides are registered under the Federal Insecticide, Fungicide
and Rodenticide Act (FIFRA), which was amended in 1988. This amendment
instigated a programme requiring all ais registered before November 1984 to
have their registrations reviewed. This applied to 1,150 ais in 45,000
formulated products, with the review programme to be carried out by the
Office of Pesticide Programs, which is part of the US Environmental
Protection Agency (EPA).
In 1996, the Food Quality Protection Act (FQPA) came into force; this
widened the scope and considerations that needed to be applied regarding
pesticide safety. As part of the FQPA, the EPA now has to assess the
cumulative risks of certain pesticide groups with a common mechanism of
toxicity, such as organophosphorous insecticides.
This review programme was essentially completed in 2006 and did not result
in as many generic ais being removed from the market as in the EU.
However, in 2007, the OPP started a new 15-year review programme, which
aims to review pesticide registrations every 15 years. The OPP has already
detailed which ais it plans to review from 2007 to 2010 and has also
released work dockets for the first nine ais entering the programme.
This review programme is already troubling the US crop protection industry,
with the US industry association CropLife America particularly concerned
about the EPAs plans to incorporate new requirements, including
endangered species assessments, into the registration review programme in
due course. This means that different risk assessment criteria could be
applied to pesticides reviewed later in the 15-year cycle than to those earlier
in the cycle. It thinks, instead, that the review programme should function
solely as a safety net to resolve issues overlooked by the original
registration and re-registration processes.
In China and India, the regulatory authorities have recently begun to review
the registrations of some older, more toxic ais, such as organophosphorus
insecticides, leading to a certain number of restrictions and withdrawals.
This forms part of efforts to encourage Chinese and Indian growers to
switch to pesticide products based on newer and safer ais, such as
pyrethroid and neonicotinoid insecticides.
For example, the Chinese Ministry of Agriculture banned the use of the
insecticides methamidophos, monocrotophos, parathion-ethyl, parathion-
methyl and phosphamidon from 1 J anuary 2007. In addition, the Ministrys
Institute for the Control of Agrochemicals (ICAMA) is reviewing 379 pesticide
ais that received a provisional registration before 23 J uly 1999, which
includes a large number of generic pesticide ais. The ICAMA has split the ais
into four groups and is currently working with pesticide manufacturers to
generate the required registration data. It plans to complete this review
programme by the end of 2008. However, the ICAMA has already started to
phase out registrations for older pesticide ais such as phorate, carbofuran,
aldicarb and methomyl.
In February 2006, the Indian Ministry of Agriculture proposed restricting the
use of 31 pesticide ais, all of which were sold in India before 1971 when the
Insecticides Act came into force, and to cancel the registrations for seven
ais, including the herbicide simazine.
At the same time, the Ministry's Directorate of Plant Protection, Quarantine
and Storage (DPPQS) initiated a review of the toxicity, persistence, safety in
use and availability of alternatives for 37 ais, all of which had been restricted
in some other countries. These included: the insecticides acephate,
bifenthrin, carbosulfan, deltamethrin, dichlorvos fenthion, monocrotophos,
propargite, quinalphos and trichlorfon; the fungicides chlorothalonil,
mancozeb and thiophanate-methyl; and the herbicides atrazine, butachlor,
linuron, pendimethalin and trifluralin. The review will be used to make
recommendations for continued use, restricted use or phase-out of the ais.
The first of these recommendations came in February 2007, when the
Ministry called on pesticide registrants to amend labels and provide certain
study data for 10 ais. These included: the insecticides dichlorvos,
monocrotophos and quinalphos; the fungicides carbendazim and mancozeb;
and the herbicides atrazine, butachlor, and pendimethalin (see individual ai
profiles in Volume 1 for details of the required amendments and study data).
Then, in August 2007, the Ministry banned all agricultural uses of the
insecticide fenthion, except locust control in desert areas and public health.
In Brazil, the problems caused by the introduction of new registration
regulations for generic pesticide ais in 2002 seem to be resolved, with the
Ministry of Agriculture finally approving the first generic ai under the new
regulations in September 2005 and the first formulated product in J une
2006.
The new regulations were supposed to make it easier to register generic
pesticide products, but there was general confusion over exactly what data
were required for generic products and how they should be obtained. This
meant that no generic registrations were granted for three years, producing
a backlog of around 350 applications.
To help clear this backlog, the Brazilian government passed a Decree in
December 2006 to speed up the registration of generic pesticides. This new
Decree removed the need for certain unnecessary tests and studies and
specified that the registration process should take a maximum of 150 days.
By J une 2007, 17 pesticide ais, including the herbicides glyphosate and
paraquat and the fungicide tebuconazole, and 20 formulated products had
received generic registrations.
Chapter 3: Generic Pesticide Companies Generic Pesticides: Volume III Business Strategies
CHAPTER 3
GENERI C PESTI CI DE COMPANI ES
Generic pesticide companies have numerous different origins, but once
trading they tend to develop in similar ways. This usually involves gradually
progressing from producing bulk technical ais to selling own-brand
formulated products, some of which contain proprietary ais. As generic
producers grow, the business strategies they adopt and the way in which
they compete necessarily change. They also begin to come up against the
major R&D-based agrochemical companies; sometimes this interaction can
be beneficial, but in other cases it can create a number of problems and
challenges.
3.1 Origins of generic companies
There are numerous routes by which a generic pesticide company can come
into existence (see Table 3.1), with certain routes more likely in certain
areas of the world.
The simplest route is for a company to be established specifically as a
generic pesticide producer. This route is currently most likely in developing
world companies, especially China and India. This is because the barriers to
entering the pesticide market in these countries can be fairly low, especially
if the protection of intellectual property has historically been fairly lax.
However, the accession of China and India to the World Trade Organization
(WTO) and their subsequent adoption of the TRIPs (Trade-Related aspects
of Intellectual Property rights) agreement have enhanced the level of patent
protection in these countries. This was demonstrated by Syngentas
successful lawsuit against two Chinese companies that were manufacturing
the patent-protected neonictinoid insecticide thiamethoxam (see Chapter 2).
This development should make it more costly to establish small generic
pesticide producers in these countries.
Some of the generic companies in developing countries, especially the larger
companies, were either established by the state or protected in the
beginning by tariffs on imported pesticides, as part of the governments
desire to encourage the development of a home-grown pesticide industry.
For example, Red Sun was established, and is still owned, by the Chinese
government, while Punjab Chemicals was established as a public/private
initiative between the Punjab State Industrial Development Corporation and
Excel Industries. However, the accession of some of these countries to the
WTO is now stimulating more competition in their domestic pesticide
markets, as foreign companies begin to gain more of a foothold.
Nevertheless, the state can still play a large role in the development of a
countrys pesticide industry, as exemplified by the Chinese governments
efforts to build national chemical champions, including within the pesticide
sector (see Chapter 4).
Many of the generic producers based in the Western world, which tend to be
larger and older than those in the developing world, have different origins.
They tend to have developed from earlier, less specialised incarnations,
which were either suppliers of broad agricultural equipment or general
chemical manufacturers. In some cases, the generic businesses are still part
of a larger company. Alternatively, they may have been spun-off from the
larger entity to become a stand-alone company or the non-generic pesticide
parts of the business may have been sold or spun-off.
Table 3.1: Origins of the 100 companies profiled in the first report
Company Country Origins
North America
Albaugh US Established as a generic pesticide producer
Amvac US Established as a generic pesticide producer
Cerexagri US Generic business developed as part of larger chemical company
Europe
Taminco Belgium Generic business spun-off from larger chemical company
Cheminova Denmark Established as a generic pesticide producer (but diversified into
other chemicals)
Agro-Chemie Hungary Generic business spun-off from larger chemical company
AgriGuard Ireland Established as a generic pesticide producer
Barclay Chemicals Ireland Established as a generic pesticide producer
Luxembourg Industries Israel Generic business developed as part of larger chemical company
MAI Israel Generic business developed as part of larger chemical company
Chemia Italy Established as a generic pesticide producer
Isagro Italy Generic business developed as part of larger chemical company
Sipcam-Oxon Italy Established as a generic pesticide producer (but diversified into
other chemicals)
Organika-Sarzyna Poland Generic business developed as part of larger chemical company
Oltchim Romania Generic business developed as part of larger chemical company
Pinus Slovenia Generic business spun-off from larger chemical company
Cequisa Spain Established as a generic pesticide producer
IQV Spain Established as a generic pesticide producer
Atabay Turkey Generic business developed as part of larger chemical company
Hektas Turkey Established as a generic pesticide producer
AH Marks UK Generic business developed as part of larger chemical company
Asia-Pacific
Nufarm Australia Generic business developed from general agricultural supplier
(and diversified into other chemicals)
AgroDragon China Established as a generic pesticide producer
Baocheng Chemical China Generic business developed as part of larger chemical company
Baoling Chemical China Generic business developed as part of larger chemical company
CAC China Generic business developed as part of larger chemical company
CCI Group China Generic business developed as part of larger chemical company
Changqing
Agrochemical
China Established as a generic pesticide producer
Changxing Zhongshan China Established as a generic pesticide producer
Dacheng Pesticide China Established as a generic pesticide producer (but diversified into
other chemicals)
Feixiang Chemical China Generic business developed as part of larger chemical company
Fujian Sannong China Established as a generic pesticide producer (but diversified into
other chemicals)
Good Harvest China Established as a generic pesticide producer
Green Agrosino China Established as a generic pesticide producer (but diversified into
other chemicals)
Greenchem Industries China Established as a generic pesticide producer
Heben Pesticide China Established as a generic pesticide producer
Henglong Pesticide China Established as a generic pesticide producer
Hisun Chemical China Established as a generic pesticide producer
Huaxing Chemical China Established as a generic pesticide producer
Iprochem China Established as a generic pesticide trader and then became a
producer
J iangshan
Agrochemical
China Generic business developed as part of larger chemical company
J iangsu Suhua Group China Generic business developed as part of larger chemical company
J iangsu Yangnong China Established as a generic pesticide producer
J ingma Chemicals China Established as a generic pesticide producer
Kangmei Chemical China Established as a generic pesticide producer (but diversified into
other chemicals)
Lanxi Agrochemical China Generic business developed as part of larger industrial
conglomerate
Limin Chemical China Established as a generic pesticide producer
Nanjing Agrochemical China Established as a generic pesticide producer
Nutrichem Laboratory China Established as a generic pesticide producer
Qinfeng Agrochemical China Established as a generic pesticide producer
Red Sun China Generic business developed as part of larger industrial
conglomerate
Sanonda China Generic business developed as part of larger chemical company
Shandong Qiaochang
Chemical
Shandong Vicome
Greenland
Sinochem Ningbo China Generic business developed as part of larger chemical company
Shenghua Biok China Generic business developed as part of larger chemical company
Suzhou Worldbest China Generic business developed as part of larger chemical company
Tide Group China Established as a generic pesticide producer (but diversified into
other chemicals)
Wangs China Generic business developed as part of larger chemical company
Xinan Chemical Generic business developed as part of larger chemical company
Xinyi Pesticide China Established as a generic pesticide producer
Yancheng Limin China Established as a generic pesticide producer
Yongnong Chemical China Established as a generic pesticide producer
Zibo Nab
Agrochemicals China
Established as a generic pesticide producer
Rotam Hong Kong Generic business developed as part of larger chemical company
Aimco Pesticides India Established as a generic pesticide producer
Atul India Generic business developed as part of larger industrial
conglomerate
Bharat Group India Established as a generic pesticide producer
Chemet Chemicals India Established as a generic pesticide producer
Coromandel Fertilisers India Generic business developed from general agricultural supplier
Dhanuka Pesticides India Established as generic pesticide producer
Excel Crop Care India Generic business spun-off from larger chemical company
Gharda Chemicals India Generic business developed as part of larger chemical company
Heranba India Established as a generic pesticide producer
Hikal India Generic business developed as part of larger chemical company
Hindustan Insecticides India Established as a generic pesticide producer
India Pesticides India Established as a generic pesticide producer (but diversified into
other chemicals and now part of larger industrial conglomerate)
Indofil India Generic business developed as part of larger chemical company
Meghmani Organics India Generic business developed as part of larger chemical company
Nagarjuna India Generic business developed from general agricultural supplier
(now part of larger industrial conglomerate)
PI Industries India Generic business developed as part of larger chemical company
Punjab Chemicals India Generic business developed as part of larger chemical company
Rallis India India Generic business developed as part of larger industrial
conglomerate (now main business)
Sabero Organics India Generic business developed as part of larger chemical company
United Phosphorus India Generic business developed as part of larger chemical company
(now main business)
PT Petrosida Gresik Indonesia Generic business developed from general agricultural supplier
Kenso Malaysia Established as a generic pesticide producer
Zagro Singapore Generic business spun-off from larger chemical company
Dongbu Fine
Chemicals
South
Korea
Generic business developed as part of larger industrial
conglomerate
LG Life Sciences South
Korea
Generic business developed as part of larger chemical company
Hui Kwang Taiwan Established as a generic pesticide producer (but diversified into
other chemicals)
Pilarquim Taiwan Established as a generic pesticide producer
Sinon Taiwan Established as a generic pesticide producer (but diversified into
other chemicals)
South America
Reposo Argentina Generic business developed as part of larger chemical company
(now main business)
Agripec Brazil Established as a generic pesticide producer
Fersol Brazil Established as a generic pesticide producer (but diversified into
other chemicals)
Quimica Lucava Mexico Established as a generic pesticide producer
Tekchem Mexico Established as a generic pesticide producer
Tecnomyl Paraguay Established as a generic pesticide producer
Inquiport Venezuela Established as a generic pesticide producer

Indeed, the larger generic pesticide businesses do in general seem to have
their origins in chemical companies or industrial conglomerates, rather than
being specifically established as generic pesticide producers. This may be
because these diversified companies have had access to the funds required
to grow their generic pesticide businesses, or it could just be that these
generic businesses are often older and therefore have had more time to
grow.
In any case, there are numerous companies that go against this broad
trend. Two generic companies in the US Amvac and Albaugh were
specifically established as pesticide companies, while a number of Chinese
and Indian generic businesses such as Lanxi Agrochemical, Xinan Chemical
and Indofil were developed from larger companies.
Perhaps most interesting are those companies that began as generic
pesticide companies and have since diversified into other areas. For
instance, Cheminova has expanded into food preservatives, flotation agents
and insulation products, while Fujian Sannong now also manufactures
pharmaceuticals and other fine chemicals. This demonstrates that operating
a generic pesticide business can provide the basis both by generating
funds and providing general chemical expertise for expanding into other,
usually related, business areas.
Also interesting are those companies that started off as general chemical
companies, but over the years have increasingly focused on generic
pesticides, such that pesticides now form the largest part of their business.
This has happened with some of the largest companies in the industry, such
as Nufarm and United Phosphorus, as well as smaller operations, such as
Reposo.
The generic pesticide business is generally considered fairly staid and
unexciting. However, it is still capable of generating substantial revenues for
successful companies and has offered better growth prospects than many
other areas of the chemical industry over the past few years, including the
R&D-based agrochemical industry. This growth looks set to continue for at
least the next few years.
3.2 Development and growth of generic companies
The growth of the generic pesticide industry over the past few years has, to
a large extent, been driven by factors outside of the industrys control. As
with the global pharmaceutical industry, the rate of discovery of new
pesticide ais has fallen over the past 10 years. This means that the ratio of
generic to proprietary pesticide ais is growing, as ais are losing their patent
protection faster than novel proprietary pesticides are being developed. This
is underscored by the fact that a number of major pesticide ais have
recently lost (for example, the herbicide glyphosate and the fungicide
tebuconazole) or are in the process of losing (for example, the insecticide
imidacloprid and the fungicide kresoxim-methyl) their patent protection in
many of the major markets around the world.
Generic pesticide companies are doing their best to take advantage of this
increase in the number of generic ais, but the original developers of many of
the ais are also keen to ensure that they keep a firm foothold in the market.
Indeed, in many cases the original developers of a generic ai still hold the
largest market share in that ai. For instance, Monsanto still manufactures
and sells almost half of the worlds supply of glyphosate, while Bayer
CropScience is still the single largest manufacturer of imidacloprid.
There are a number of business strategies that generic companies can adopt
to try to enhance their sales growth and thereby drive their development,
with the precise strategy adopted usually dependent on the size of the
company and on the location of its major markets. There are also a number
of strategies that R&D-based agrochemical companies can adopt to try to
retain a major share of the market in an ai that is about to lose, or has
recently lost, its patent protection. These strategies are detailed in the
following two sections.
3.2.1 Generic company business strategies
There are five broad business strategies that are generally adopted by
generic pesticide companies.
Selling technical ais and competing mainly on price.
Selling technical ais and formulated products, and competing mainly on
price.
Selling technical ais and branded formulated products, but still
competing mainly on price.
Selling mainly branded formulated products and developing novel
mixtures and formulations, and competing on effectiveness, reputation
and assistance to growers.
Selling both generic and proprietary pesticide products, and competing
on effectiveness, reputation and assistance to growers.
Smaller generic pesticide companies tend to adopt one of the first two
strategies, whereas the larger companies adopt one or more of the latter
three (see Table 3.2). Indeed, generic pesticide companies often move
through these five strategies in order as they develop and grow.
Table 3.2: Main business strategies adopted by 100 companies
profiled in the first report
Company Country Main business strategy
North America
Albaugh US Selling technical ais and branded formulated products
Amvac US Selling both generic and proprietary pesticide products
Cerexagri US Selling mainly branded formulated products and
developing novel mixtures and formulations
Europe
Taminco Belgium Selling technical ais and branded formulated products
Cheminova Denmark Selling mainly branded formulated products and
Agro-Chemie Hungary Selling both generic and proprietary pesticide products
AgriGuard Ireland Selling mainly branded formulated products and
Barclay Chemicals Ireland Selling mainly branded formulated products and
Luxembourg Industries Israel Selling mainly branded formulated products and
MAI Israel Selling both generic and proprietary pesticide products
Chemia Italy Selling mainly branded formulated products and
Isagro Italy Selling mainly branded formulated products and
Sipcam-Oxon Italy Selling mainly branded formulated products and
Organika-Sarzyna Poland Selling technical ais and branded formulated products
Oltchim Romania Selling technical ais and branded formulated products
Pinus Slovenia Selling mainly branded formulated products and
Cequisa Spain Selling technical ais and formulated products
IQV Spain Selling mainly branded formulated products and
Atabay Turkey Selling technical ais and formulated products
Hektas Turkey Selling technical ais and formulated products
AH Marks UK Selling mainly branded formulated products and
Asia-Pacific
Nufarm Australia Selling both generic and proprietary pesticide products
AgroDragon China Selling technical ais and formulated products
Baocheng Chemical China Selling technical ais and formulated products
Baoling Chemical China Selling technical ais and formulated products
CAC China Selling technical ais and formulated products
CCI Group China Selling technical ais
Changqing Agrochemical China Selling technical ais and formulated products
Changxing Zhongshan China Selling technical ais and formulated products
Dacheng Pesticide China Selling technical ais and formulated products
Feixiang Chemical China Selling technical ais and formulated products
Fujian Sannong China Selling technical ais and formulated products
Good Harvest China Selling technical ais and formulated products
Green Agrosino China Selling technical ais and formulated products
Greenchem Industries China Selling technical ais and formulated products
Heben Pesticide China Selling technical ais and formulated products
Henglong Pesticide China Selling technical ais and formulated products
Hisun Chemical China Selling technical ais and formulated products
Huaxing Chemical China Selling technical ais and formulated products
Iprochem China Selling technical ais
J iangshan Agrochemical China Selling technical ais and formulated products
J iangsu Suhua Group China Selling technical ais and formulated products
J iangsu Yangnong China Selling technical ais and formulated products
J ingma Chemicals China Selling technical ais and formulated products
Kangmei Chemical China Selling technical ais and formulated products
Lanxi Agrochemical China Selling technical ais and formulated products
Limin Chemical China Selling technical ais and formulated products
Nanjing Agrochemical China Selling technical ais and formulated products
Nutrichem Laboratory China Selling technical ais and formulated products
Qinfeng Agrochemical China Selling technical ais and formulated products
Red Sun China Selling technical ais and formulated products
Sanonda China Selling technical ais and formulated products
Shandong Qiaochang
Chemical
China Selling technical ais and formulated products
Shandong Vicome
Greenland
China Selling technical ais and formulated products
Sinochem Ningbo China Selling technical ais and branded formulated products
Shenghua Biok China Selling technical ais and formulated products
Suzhou Worldbest China Selling technical ais and formulated products
Tide Group China Selling technical ais and formulated products
Wangs China Selling technical ais and formulated products
Xinan Chemical China Selling technical ais and formulated products
Xinyi Pesticide China Selling technical ais
Yancheng Limin China Selling technical ais and formulated products
Yongnong Chemical China Selling technical ais and formulated products
Zibo Nab Agrochemicals China Selling technical ais and branded formulated products
Rotam Hong
Kong
Selling mainly branded formulated products and
Aimco Pesticides India Selling technical ais and branded formulated products
Atul India Selling technical ais and branded formulated products
Bharat Group India Selling technical ais and formulated products
Chemet Chemicals India Selling technical ais and branded formulated products
Coromandel Fertilisers India Selling technical ais and branded formulated products
Dhanuka Pesticides India Selling mainly branded formulated products and
Excel Crop Care India Selling technical ais and formulated products
Gharda Chemicals India Selling mainly branded formulated products and
Heranba India Selling technical ais and formulated products
Hikal India Selling technical ais
Hindustan Insecticides India Selling technical ais and formulated products
India Pesticides India Selling technical ais
Indofil India Selling mainly branded formulated products and
Meghmani Organics India Selling technical ais and branded formulated products
Nagarjuna India Selling technical ais and formulated products
PI Industries India Selling technical ais and formulated products
Punjab Chemicals India Selling technical ais and formulated products
Rallis India India Selling both generic and proprietary pesticide products
Sabero Organics India Selling technical ais and branded formulated products
United Phosphorus India Selling both generic and proprietary pesticide products
PT Petrosida Gresik Indonesia Selling technical ais and formulated products
Kenso Malaysia Selling mainly branded formulated products and
Zagro Singapore Selling technical ais and formulated products
Dongbu Fine Chemicals South
Korea
Selling mainly branded formulated products and
LG Life Sciences South
Korea
Selling both generic and proprietary pesticide products
Hui Kwang Taiwan Selling technical ais and formulated products
Pilarquim Taiwan Selling technical ais and branded formulated products
Sinon Taiwan Selling mainly branded formulated products and
South America
Reposo Argentina Selling technical ais and branded formulated products
Agripec Brazil Selling mainly branded formulated products and
Fersol Brazil Selling mainly branded formulated products and
Quimica Lucava Mexico Selling technical ais and branded formulated products
Tekchem Mexico Selling technical ais and formulated products
Tecnomyl Paraguay Selling mainly branded formulated products and
Inquiport Venezuela Selling technical ais and branded formulated products

Most of the companies that are specifically established as generic pesticide
producers, especially those in the developing world, begin by just
manufacturing technical grade ais. These companies compete mostly on
price, and, to a lesser extent, on the quality and purity of the ai that they
produce.
Although this remains the most basic business strategy for a generic
pesticide company to adopt, it can also be reasonably lucrative. A number of
generic pesticide companies have actually grown quite large by focusing
solely on manufacturing technical ais, and many of the largest pesticide
companies, such as Nufarm, find that it makes financial sense to buy ais
from these companies rather than conduct the manufacturing themselves.
Nevertheless, most generic pesticide companies progress to developing both
technical grade ais and unbranded formulations, which they then sell to
companies, both domestic and foreign, for them to transform into their own-
brand pesticide products. Common formulations include granules, wettable
powders and concentrated suspensions. The majority of the generic
pesticide companies in the developing world adopt this strategy, as can be
seen by looking at the entries for China and India in Table 3.2.
There is a large customer base for companies producing just technical ais or
unbranded products. Although all the companies profiled in Volume 1
manufacture some technical ais, the vast majority of generic pesticide
companies are purely formulators. For example, in India there are only
around 80 manufacturers of technical ais but around 500 formulators, and
there are around 2500 pesticide companies in China, but only around 500 of
these actually manufacture technical ais. There are also numerous pesticide
formulators in the developed world, and these tend to obtain their technical
ais from the cheaper producers in India and China.
The companies that adopt the strategy of producing technical ais and
unbranded products tend to compete mainly on price, although they can
also compete on the range and quality of the ais and formulations that they
sell. Most companies only manufacture a fairly small range of technical
grade ais and some try to gain a competitive advantage by specialising in
certain ais. For example, Baoling Chemical claims to be the largest Asian
producer of the insecticide profenofos and the fungicides metalaxyl and
propamocarb, while PI Industries is one of the worlds largest producers of
insecticide ais such as ethion and phorate.
Chinese companies have an alternative way of competing, which involves
them offering to supply a huge range of pesticide ais. They can do this
because many Chinese companies form huge networks of linked businesses.
Thus, although each company only produces a few technical ais, by taking
advantage of this network they can offer to supply any of the ais
manufactured by the other members of the network.
Many of the generic pesticide companies in developing countries are happy
to stick with this business strategy because their sales are currently under
no real threat. This is due to both the high rates of growth in the pesticide
markets in many developing countries, especially China and South American
countries, and by the fact that these companies can still produce technical
ais and formulated products cheaper than companies based in the
developed world.
Developed world companies, on the other hand, usually have to find ways to
compete other than price. Most of the generic pesticide companies in
developed countries have therefore progressed to producing branded
pesticide products, which they usually market directly to the end-user. They
try to build up a reputation for these products and their brands, and are
usually engaged in developing novel formulations and ai mixtures to try to
enhance the efficacy of their products.
These companies tend to develop their products for the more affluent
pesticide markets in the developed world, where effectiveness, rather than
price, is often the most important consideration for the end-user. Growers in
these countries, where regulations on pesticide residues are usually quite
strict, tend to prefer pesticide products that are convenient to apply and
specifically target the disease or pest in question. As such, they are willing to
pay more to purchase more effective mixtures and formulations, such as
micro-encapsulation.
Some developing world companies have also begun to produce their own-
brand pesticide products, which are often for sale only in their domestic
market, while still selling technical grade ais into foreign markets. However,
these companies still tend to compete mainly on price and therefore focus
on selling the standard formulations. Some of the larger developed world
companies, such as Dhanuka Pesticides and Gharda Chemicals, have moved
on to developing their own ai mixtures and formulations, and have stopped
selling technical grade ais. As such, they can now compete on reputation
and effectiveness, rather than price. This allows them to charge more for
their products and provides a more stable business platform from which to
operate.
Many of the companies that sell branded products also run schemes
providing assistance to growers. These schemes may involve advising
growers on the best combination of products to use and training them in the
best way to use the products.
Some of the largest generic pesticide companies in both the developed and
developing worlds have moved beyond the confines of the generic pesticide
industry by acquiring and developing proprietary products. This process has
been fuelled in recent years by the general consolidation of the global
agrochemical industry, which has caused many of the merged companies to
sell some of their proprietary products and businesses, or the rights to those
products in certain regions. This is either because the products no longer fit
in with the rest of the merged portfolio or because selling the product was a
requirement of the merger being approved by anti-trust authorities.
In addition, the major R&D companies are increasingly selling rights to ais
that are either no longer big sellers or are about to lose their patent
protection. Many of these products and businesses, which also include some
generic products, were acquired by some of the largest generic pesticide
companies, such as MAI, Nufarm and United Phosphorus (see Table 3.3).
Table 3.3: Pesticide businesses acquired by generic pesticide
companies from R&D-based agrochemical companies since 2000
Generic
company
R&D-based
company
Year Product/ business
1

Amvac Zeneca Agrochemical
(now Syngenta)
2000 Dacthal (chlorthal-dimethyl)
Amvac BASF 2001 Phosdrin (mevinphos)
Amvac Bayer CropScience 2002 Folex (tribufos)
Amvac Syngenta 2002 US rights to Ambush (permethrin)
Amvac Syngenta 2003 US rights to Evital (norflurazon)
Amvac BASF 2005 North American rights to Avenge (difenzoquat)
Amvac BASF 2005 Phorate insecticide business
Amvac BASF 2006 Counter (terbufos)
Cheminova Syngenta 2001 Flutriafol cereal fungicide business
Cheminova Bayer CropScience 2003 European rights to acrinathrin
Cheminova Bayer CropScience 2003 European rights to phosalone
Cheminova Bayer CropScience 2007 Global rights to acrinathrin
MAI Syngenta 2000 Agil (propaquizafop)
MAI Syngenta 2000 Mavrik (tau-fluvalinate)
MAI Syngenta 2000 Nimrod (bupirimate)
MAI Syngenta 2001 Scandinavian cereal fungicides business
(fenpropimorph, fenpropidin, propiconazole)
MAI Aventis CropScience
(now Bayer
CropScienece)
2001 Panoctine (guazatine)
MAI Aventis CropScience
(now Bayer
CropScienece)
2001 Apollo (clofentezine)
MAI Syngenta 2002 Racer (flurochloridone)
MAI Bayer CropScience 2002 Goltix (metamitron)
MAI
Bayer CropScience 2002 German and Belgian rights to Herold (flufenacet +
difluenican)
MAI Bayer CropScience 2002 UK rights to Bayton (triadimenol + fuberidazole)
MAI Bayer CropScience 2002 Greek and Portuguese rights to Thiodan
(endosulfan)
MAI Bayer CropScience 2002 Non-exclusive German rights to Folicur
(tebuconazole)
MAI Bayer CropScience 2002 European rights to Gusathion (azinphos-methyl)
MAI Bayer CropScience 2002 Afalon (linuron)
MAI Bayer CropScience 2002 European rights to Bulldock (beta-cyfluthrin) and
Baythroid (cyfluthrin)
MAI Bayer CropScience 2002 European rights to Metasystox (oxydemeton-
methyl)
MAI Bayer CropScience 2002 European rights to Nemacur (fenamiphos)
Nufarm Monsanto 2002 Australasian selective herbicide business, including
Monza (sulfosulfuron) and Ramrod (propachlor)
Nufarm BASF 2002 Phenoxy herbicide business (2,4-D, MCPA,
mecoprop, mecoprop-P, dichlorprop and
dichlorprop-P)
Nufarm Bayer CropScience 2002 German and Belgian rights to two fenoxaprop-
based herbicides
Nufarm BASF 2005 Imazamethabenz herbicide business outside of
Europe
United
Phosphorus
Dow AgroSciences 2003 Non-EU rights to Surflan (oryzalin)
United
Phosphorus
BASF 2003 Ultra Blazer, Storm and Volt (acifluorfen)
United
Phosphorus
Bayer CropScience 2006 Asulox and Asilan (asulam)
United
Phosphorus
Bayer CropScience 2006 Metasystox (oxydemeton-methyl)
United
Phosphorus
Bayer CropScience 2006 Trichlorfon insecticide business
United
Phosphorus
DuPont 2006 Londax and Mariner (bensulfuron-methyl) all
markets except Asia/Pacific
United
Phosphorus
Dow AgroSciences 2006 Propanil herbicide business
United
Phosphorus
DuPont 2007 Fenbutatin-oxide miticide and triphenyl hydroxide
fungicide businesses
Note: 1. Global rights unless otherwise specified.
This strategy could be viewed as evidence that some of the larger generic
pesticide companies want to leave the generic pesticide industry behind and
transform themselves into R&D-based companies. However, with certain
exceptions (such as Amvac, which considers itself a proprietary pesticide
company that happens to sell some generics), these larger companies plan
to continue focusing on generic pesticides. They have tended to buy only
those proprietary pesticides that fit in with their generic product portfolio
and most have no plans to start developing their own proprietary ais.
A related strategy adopted by some generic producers, both large and small,
is to enter into deals with the major R&D-based agrochemical companies to
distribute their products in the country where the generic company is based.
For example, Rallis India sells certain pesticide products produced by Bayer
CropScience, FMC, Nihon Nohyaku and Syngenta in India, and Herbos sells
products produced by various R&D-based companies, including Dow
AgroSciences, Isagro and Sygnenta, in Croatia. Some of the largest generic
companies have even negotiated exclusive distribution agreements in certain
regions. For example, in 2002 Monsanto appointed Nufarm as the exclusive
distributor for its Roundup (glyphosate) herbicide in Australia and New
Zealand, and in 2004 BASF appointed Nufarm as the exclusive distributor for
all its agricultural pesticide products in Australia.
Many companies move through these different strategies as they develop,
although progressing from one strategy to the next usually requires that the
company has developed to a certain size and is therefore able to fund the
development. Each successive business strategy offers more scope for
growth, but is also more expensive to implement, because of the ancillary
costs of developing new mixtures and formulations and setting up a
distribution network for branded products.
Lots of generic pesticide companies conduct some form of research activity.
Initially, this is often focused on developing production processes for specific
generic ais, but as the companies progress to producing branded products
they often also start to develop new ai mixtures and formulations. This
allows them to start competing on factors such as effectiveness and
reputation, with the associated business benefits.
Developing a distribution network, especially a global one, can be even more
expensive, although there are a numbers of ways that this can be
accomplished. The simplest way is to enter into distribution agreements with
foreign generic companies. For example, Isagro has agreements with Arysta
LifeSciences for it to distribute Isagros products in J apan and with Valent
USA for it to distribute Isagros product Domark (tetraconazole) in the US.
More expensive, but offering more control, is for a company to establish its
own overseas distribution network, which can be achieved by either setting
up overseas offices or subsidiaries or by acquiring foreign companies. For
example, Gharda has established offices in the UK and the US to sell
products into the European and North American markets, while much of
Nufarms growth over the past few years has been driven by its acquisition
of overseas companies.
3.3 R&D-based company business strategies
The major R&D-based agrochemical companies adopt many of the same
business strategies as the largest generic pesticide producers. However,
they also adopt a number of unique strategies, many of which involve trying
to prevent generic pesticide companies from gaining a foothold in the
market for their proprietary ais.
Like the largest generic pesticide companies, the R&D-based companies sell
branded products and compete on effectiveness, reputation and assistance
to growers rather than price (although that can change for generic products,
see section 3.4.3). Unlike generic companies, however, they develop novel
ais, which gives them additional ways to market and differentiate their
products. For instance, they can market their novel ai as a more effective
pesticide treatment in certain situations than an existing, perhaps generic,
ai, and there are numerous examples of a novel pesticide taking much of the
market share from an older ai (see section 3.4.5). Indeed, whole classes of
pesticides can be replaced by newer versions, such as the gradual loss of
market share by organophosphorus insecticides to pyrethroid insecticides
and now neonicotinoid insecticides.
These companies also tend to focus their activity on developed countries
with more affluent agricultural industries, where farmers are willing to pay
for pesticides that are more effective and can be applied at lower rates.
However, the R&D-based companies, which have their own global
distribution and marketing networks, are beginning to pay more attention to
developing countries, especially those where the domestic pesticide market
is growing, such as China and many countries in South America. Indeed, in
recent years, many of the largest R&D-based companies have begun to
expand their sales networks into countries where they previously only had
limited access, such as China. This is bringing them into direct contact with
the generic pesticide industries in these countries.
3.4 Strategies to counter generic competition
The entry of generic producers into the market for a specific ai has the
potential to greatly reduce the developing companys share of the market
and thereby hit its revenues and profits, especially with a major ai such as
glyphosate. There are numerous ways in which the original developing
company can protect its share of the market from generic competitors and
the fact that developing companies often manage to retain a major share in
the market for an ai demonstrates the potential effectiveness of these
strategies.
3.4.1 Patents
The initial and most obvious way in which R&D-based agrochemical
companies protect their pesticide business against generic producers is
through patents, which have been essential to the successful and rapid
development of the modern agrochemical industry. This protection has
allowed the leading agrochemical companies to commit large proportions of
their sales revenues to R&D, with the assurance that any discoveries and
subsequent pesticide products will be protected from any competition for a
considerable time.
However, obtaining and maintaining a patent is not cheap, with patent-
related costs accounting for around 4% of the major agrochemical
companies R&D expenditure, according to a recent study by UK consultants
Phillips McDougall.
Furthermore, the extent to which patents are protected varies from country
to country and continent to continent. As a general rule, R&D-based
companies have a greater share of the pesticide market in countries with
strong patent protection legislation. Patent protection has traditionally been
strong in the US, J apan and most of Western Europe. In contrast, it has
historically been weak in India, China, Eastern Europe, the former Soviet
Union and South America, allowing generic pesticide producers to play a
more significant role in these countries. However, patent protection in some
of these countries has recently grown stronger as a result of countries such
as China and India joining the WTO, and subsequently adopting the TRIPs
agreement.
Patent protection for a novel crop protection agent typically lasts for 1620
years. In some exceptional cases an additional period of protection is
allowed, such as in the EU (see below). As well as the patents on a new
pesticide ai, the effective protected life of a pesticide can be prolonged by
patents relating to areas such as product formulations, manufacturing
technology, chirality and key chemical intermediates (see sections 3.4.4 and
3.4.5).
In the US, the only change to patent legislation in recent years is that all
patents now run for 20 years from the date of application, rather than the
previous 17 years from date of issue. An additional provision for
pharmaceuticals and pesticide products covers the situation where the
government patent examiner unnecessarily delays (or neglects) a patent
application, in which case a company may apply for a patent extension for
the time it was delayed (however, this extension is not automatic).
In Europe, the European Commission proposed in 1994 to extend the
effective patent life on pesticides by up to five years. At the time, the
Commission estimated that the protection of a pesticide patent, typically 20
years, had in practice been reduced to 10 years. This was mainly attributed
to the long development and registration periods required before sales could
commence. The level of protection also varied in individual member states,
creating barriers to the free movement of products and distorting
competition.
The Commissions proposal involved granting a complementary certificate
of protection, similar to one adopted for pharmaceuticals in 1992. Once
commercialised, all novel pesticides would, in effect, receive protection for
up to 15 years. The certificate, which would be granted by the national
patent offices of member states and be based on precise reference dates,
would give the same rights and impose the same obligations as the basic
patent.
According to the proposal, the regulation would be applied to all products
authorised in the EU after 1 J anuary 1985 for which a patent was still in
force, with a transitional regime for products already on the market. The
regulation (EC Regulation 1610/96) eventually came into force in 1996 and
has now been adopted in the national legislation of member states.
In the UK, owners of patents for plant protection products could extend their
protection for up to a further five years, with effect from February 1997. The
Patents (Supplementary Protection Certificate) Rules 1997 gave practical
effect to EC Regulation 1610/96 in the UK. Under the Patents Act 1977, a UK
patent can be renewed for up to 20 years after filing.
3.4.2 Legal challenges
Most R&D-based companies are quite happy to defend their patent position
in the courts, especially as an ai nears the end of its patent protection.
Sometimes generic producers knowingly try to flout a companys patent, but
on other occasions it can be difficult to know whether all the patents on an
ai have expired. This is because companies can not only patent the ai itself,
but also the manufacturing processes used to produce it and specific
formulations.
Many generic producers, especially those in India and China, have actually
become quite adept at developing alternative production routes for specific
ais, but others have fallen foul of manufacturing patents. In addition,
patents tend to expire at different times in different countries. So, a generic
company may be perfectly within its rights to manufacture and sell an ai in
its home country, but will have problems if it offers to sell the ai in countries
where the patent is still in force. At recent BCPC exhibitions, a number of
major agrochemical companies have filed injunctions against Chinese
generic producers for advertising pesticide ais that were still protected under
UK patents, such as BASFs kresoxim-methyl.
Some R&D-based companies, with access to a large amount of funds, have
used the threat of legal action to try to ward off generic producers.
Monsanto is one pesticide company that has been accused of over-stepping
the mark while defending its ai patents. In 2001, it launched a lawsuit
against the US generic producer Chemical Products Technologies (CPT) for
allegedly infringing Monsanto's glyphosate patents. CPT claimed that
Monsanto's suit had been filed specifically to harass a small generic
company and to try to dissuade it from offering farmers a lower-priced
version of glyphosate.
3.4.3 Price reductions
As the patent expiry date for an ai approaches, R&D-based companies may
decide to reduce prices in specific markets to make the product less
commercially attractive for any new entrant. This was one of the strategies
that Monsanto adopted for glyphosate. It can be a relatively painless
strategy for a company that already has well-established production plants
and existing distribution networks. The pain can be reduced still further by
improving the efficiency of the manufacturing process, as Monsanto did with
glyphosate. This may result in a new entrant to the market finding that
start-up costs, coupled with the relatively high cost of making smaller
quantities of the product, make it impossible to compete.
Care must be taken to avoid this strategy backfiring. In 1993, the Australian
Anti-Dumping Authority (ADA) imposed duties on imports of the herbicide
trifluralin, which was developed by DowElanco (now Dow AgroSciences), for
a five-year period. This followed complaints from Nufarm that DowElanco
was selling the herbicide in Australia at half the US retail price.
3.4.4 New formulations and mixtures
By developing sophisticated formulation technologies and novel product
mixtures, leading to product benefits in areas such as efficacy, ease of
handling and environmental characteristics, a company can differentiate its
product from generic competitors. The same also applies to generic
companies, which can gain an advantage over the original patent holder by
developing their own novel formulations and mixtures. This strategy can be
so effective that R&D-based companies have sometimes applied new
formulation technologies to generic ais that they didnt originally develop if
they can see a market opportunity.
These strategies can also offer the developing company another form of
patent protection. Novel formulation technologies can be patented and, if
the formulation offers sufficient advantages over older formulations and is
therefore preferred by growers, may allow the developing company to retain
its dominant position in the market for an ai for the length of the formulation
patent.
For example, Monsanto launched a number of new formulations of
glyphosate as the ai lost its patent around the world.
Roundup Hi-Load launched in J apan in 1999, this product contains
glyphosate-ammonium, which is taken up more quickly than the
propylamine salt of glyphosate.
Roundup UltraMax launched in the US in 2000, this product contains
25% more glyphosate than other Roundup products and employs
Transorb technology for enhanced uptake, translocation and
rainfastness.
Roundup Turbo launched in Germany in 2002, this product is a dry
formulation of glyphosate.
Roundup WeatherMAX launched in the US in 2003, this product
provides consistent weed control in a variety of weather conditions. By
utilising Monsanto's proprietary Transorb II technology, Roundup
WeatherMAX is able to penetrate a weed leaf within minutes, thereby
minimising the chance that the herbicide will be washed away by rain.
The company now holds 250 patents worldwide on formulations of
glyphosate.
This approach can also be used by generic companies wanting to enter a
market. By offering a new formulation with advantages over existing ones a
generic pesticide company can give its product a distinct identity that can
help it to stand out from the competition.
The company that originally developed a pesticide ai may even try
fragmenting the market with a wide range of different product formulations
for different crop and non-crop uses. The approach usually involves
developing different product formulations for different market sectors, often
in mixtures with different ais. This strategy also allows the company to
charge different prices in different sectors, such as charging high prices for
fungicides used on top fruit and lower prices when used on vines and
cereals. In addition, it can discourage competitors who do not want to incur
the extra expenses involved in developing additional mixtures. With
registration costs generally increasing, however, this may not always be in
the best interests of the developing company.
Marketing an off-patent product in mixtures with other ais that are still
protected by patent (either in-house or licensed from another R&D-based
company) can be another effective strategy. Not only will the combination
product presumably have an improved spectrum of activity, the presence of
a patented ingredient will protect it from competition. This mixture strategy
can also work well in advance of patent expiry, by reducing mixing
opportunities for both R&D-based companies and generic companies.
3.4.5 New ais and single isomers
R&D-based companies may develop new ais to try to replace the ai that has
lost, or is about to lose, its patent protection, especially in more developed
and affluent markets. For example, Dow AgroSciences launched its new
herbicide aminopyralid with the expectation that it would replace some of its
older cereal herbicides, such as fluroxypyr.
A related strategy is to develop pesticide products that only contain the
active isomer of an ai. Many chemical compounds can exist in a number of
different structural forms, known as isomers, which possess the same
composition and molecular weight. Many pesticide ais consist of mixtures of
different isomers (usually two symmetrical forms, known as enantiomers),
only one of which is responsible for the pesticidal activity. This is either
because the developing company doesnt know which enantiomer is the
active one or, more likely, is only able to produce a mixture of all the
enantiomers.
It is usually more difficult and expensive to produce single enantiomers of a
compound, because most manufacturing processes produce equal amounts
of all possible enantiomers. However, companies can obtain a separate
patent for the single enantiomer of an ai and also for the specific
manufacturing process that usually has to be developed to produce it. This
patent protection and the increased efficiency of a pesticide product based
solely on the active enantiomer usually allow the developing company to
take market share away from the original ai.
For example, Syngenta introduced single enantiomer versions of two of its
top-selling active ingredients, the herbicide metolachlor and the fungicide
metalaxyl, both of which are now off-patent. This was made possible by the
company developing new technology to manufacture the biologically more
active enantiomers on a much larger scale than previously possible, thus
making wide-scale production economically viable.
Syngenta is now supporting the single enantiomer versions, known as S-
metolachlor and metalaxyl-M or mefenoxam, at the expense of the older ais.
It claims that S-metolachlor provides equivalent weed control to metolachlor
but at an application rate 35% lower and that metalaxyl-M is effective at half
the application rate of metalaxyl.
This has resulted in S-metolachlor and metalaxyl-M being approved for sale
in the EU, but metolachlor and metalaxyl being withdrawn from the
European market. Syngenta has also tried to prevent the US EPA from
registering generic versions of metolachlor, arguing that S-metolachlor is a
much safer product than metolachlor, because of the reduced application
rate, and that re-introducing metolachlor would undermine the EPAs
reduced risk initiative.
Not surprisingly, both metolachlor and metalaxyl have lost market share to
the single enantiomer versions. Around 10 years ago, the global markets for
metolachlor and metalaxyl were worth around $400million and $200 million,
respectively, but they are now probably worth around $100 million and
under $50 million. In contrast, the global markets for S-metolachlor and
metalaxyl-M are probably worth $300 million and $240 million, respectively.
3.4.6 Manufacturing processes
The entry of generic competitors into the market for an ai obviously results
in greater competition, which acts to force down the price of the ai. Some
R&D-based agrochemical companies anticipate this price reduction and
develop cheaper and more efficient manufacturing processes for an ai that is
about to lose its patent. This means that the developing company can retain
its profit margin in the face of a falling price and even try to price potential
competitors out of the market (see section 3.4.3).
For instance, by investing in new technology, Monsanto managed to reduce
unit production costs for Roundup (glyphosate) by 29% between 1996 and
2005. The centrepiece of this effort was a new $550 million manufacturing
and formulation plant at Camaari in Brazil, which exceeded targets for
efficiency, yield and quality in its first year of operations. In 2002, as a result
of the Camaari plant coming on-stream, Monsanto was able to close some
of its higher-cost facilities.
Manufacturing processes can also be patented and these process patents
can be of considerable commercial value because they can help to prolong
the period of patent protection for a pesticide ai. This means that even if an
ai has lost its patent protection, generic companies can be prevented from
producing the ai if the specific manufacturing process for it is still protected.
This has resulted in many generic pesticide companies becoming experts at
developing alternative manufacturing processes for generic ais. For instance,
Gharda developed a novel process for the production of isoproturon, which
avoids the use of isocyanate intermediates.
Even if the patents on a manufacturing process have expired, the
technology required may still be beyond the reach of many generic pesticide
companies, especially the smaller ones. This constraint may prevent the
companies from manufacturing the ai at all or result in them producing a low
quality product.
3.4.7 Controlling raw material supplies
The original developer of an ai may try to prevent generic competitors from
entering the market by controlling the existing supply of a key intermediate
compound or raw materials. This is obviously easier to do if the production
capacity for the intermediate is fairly small or the raw material fairly rare.
3.4.8 Acquiring or forming generic businesses
Some R&D-based agrochemical companies have decided to deal with generic
competitors by entering the industry. They usually do this by acquiring an
existing generic business, which then markets the agrochemical companys
generic products. Examples include: DuPonts joint venture with Griffin,
which led to DuPont buying the company outright in 2003; Dow
AgroSciences acquisition of the South African company Sentrachem and its
generic pesticide subsidiary Sanachem in 1997; and BASFs acquisition of
Micro Flo, a US generic formulator and distributor, in 1998 (although BASF
subsequently sold Micro Flo to Arysta LifeScience in 2006).
3.4.9 Selling off-patent products
Instead of trying to compete with the generic producers, some companies
decide to sell off a post-patent ai. This divestment can include global rights
to the ai, or just rights to certain markets, and may also include production
plants. Products usually chosen are those that are no longer of sufficient
interest or profitability to the developing company. However, they may still
be of interest to generic companies, which work on lower margins and may
be able to put more effort into marketing products based on the ai.
Amvac has built up much of its business by acquiring unwanted, niche
pesticide products from some of the major R&D-based agrochemical
companies (see Chapter 2). Amvac claims that it can improve the sales of
these niche products by actively marketing them and seeking new markets.
3.4.10 Regulatory restrictions
Many generic pesticide companies consider that the pesticide registration
regulations in many regions and countries, specifically data protection
regulations, put them at a disadvantage compared with the R&D-based
agrochemical companies.
Theoretically, the cost of registering a generic pesticide should be less than
a novel pesticide, because the ai has already been approved. But generic
pesticide companies often find it difficult gaining access to registration data
produced by the original developing company, even if they are willing to pay
for it (see Chapter 3 for more details on the data protection position in
different countries and regions).
For example, the European Crop Care Association (ECCA) has long
complained that the data protection provisions in the EU pesticide
registration directive placed generic companies at a severe disadvantage.
The problem is that generic pesticide companies can find it difficult to
discover which of the studies used to provide the original registration data
are protected and which are older unprotected studies. They also can
have problems gaining access to any protected studies. ECCA has long called
for EU member states to provide lists of protected data and to implement a
compensation system for accessing the data, as happens in the US. Without
access to this data, generic companies are forced to conduct their own
studies, with the associated cost.
The proposed amendments to the EU pesticide registration directive should
go some way to assuaging ECCAs concerns. These require member states
to provide interested parties with information on the studies used for Annex
1 listing and on claims for protected data, while also removing any
protection for new data generated for the review of existing ais and
products (see Chapter 4).
Meanwhile, in India, the PMFAI has been arguing against the imposition of a
510 year period of data protection. The PMFAI have asserted that
introducing an additional data exclusivity period would amount to an
extended patent and would go beyond the requirements of TRIPs.
Although the R&D-based agrochemical companies are not deliberately
withholding registration data from generic producers, they obviously want to
see data protection periods last as long as possible. They also benefit from
generic companies finding it hard to access registration data or being forced
to conduct their own studies, which delays generic products from reaching
the market.
In addition, the difficulty and cost of meeting the increasingly stringent
requirements for registering a pesticide product can effectively exclude a
generic company from entering certain regional markets. This is especially
the case in the EU, where it is often simply not cost effective for small
generic producers to try to obtain a registration for a new pesticide product
or defend the registration for an existing product.
Ironically, defending a product registration becomes much more difficult
after an ai has been approved for inclusion in Annex 1 of the EU pesticide
registration directive. This is because generic producers are now required to
show that they have access to a complete data package for that ai.
3.5 Competition between generic and R&D-based manufacturers
Despite the many ways in which R&D-based manufacturers can try to
prevent generic competitors from entering the market for an ai, they will
eventually have to compete with generic producers. Price is the primary
mechanism by which most generic manufacturers compete with the original
developing company and prices for any ai that has recently lost its patent
protection tend to decline sharply. For example, the price of technical grade
glyphosate fell by almost 30% between 2000, when the US patent for
glyphosate expired, and 2004.
Like the R&D-based agrochemical companies, generic producers can also
compete by developing their own formulations and mixtures. Most
reasonably-sized generic companies conduct some form of research into
new formulations and mixtures (see Table 3.2), including some fairly
advanced technologies. For instance, both Agripec and Indofil have
conducted research into micro-encapsulation.
Generic companies also have a formulating advantage over the larger R&D-
based companies, in that they can develop formulations specifically targeted
at their domestic market. Although this market may be fairly small from the
viewpoint of a multinational agrochemical company, generic producers often
generate the majority of their sales in their domestic market. They can
therefore afford to develop a formulation with properties specifically tailored
for the local growing environment. This especially tends to be the case for
generic producers in developing countries, because the R&D-based
companies mainly concentrate on designing products for the more affluent
developed country markets.
A related competitive advantage for generic producers is that they have
often built up a distribution and marketing network for their products in their
domestic market. Foreign R&D-based companies, on the other hand, can
have more difficulty accessing the market, especially if the countrys
government is keen to protect its domestic pesticide industry. For example,
until recently most companies wanting to sell pesticide products in China,
including all foreign companies, had to do so through a state-owned
distribution system known as Agricultural Means and Production of China.
However, certain of the larger Chinese companies were allowed to supply
their products directly to country dealers. This process is now changing,
following Chinas accession to the WTO, and some of the major R&D-based
agrochemical companies have begun to set up their own sales networks to
target country dealers directly.
Nevertheless, the original developing company usually manages to retain a
dominant position in the market for a newly post-patent ai, at least for a few
years after the patent has expired. Occasionally, the tactics they employ for
maintaining this position draw complaints from generic competitors, as well
as from farmers and growers.
For example, in February 2007, the American Corn Growers Association filed
a lawsuit against Monsanto accusing it of using its "monopoly power" to
restrain competition and maintain "supra-competitive pricing" for its
glyphosate-based herbicides. Among other things, the lawsuit accused
Monsanto of maintaining a glyphosate monopoly by "various exclusionary
tying and bundling practices" that penalised dealers who wanted to sell
more than a limited amount of generic glyphosate. These practices were
alleged to have induced growers to buy Roundup "virtually exclusively" even
though cheaper generic herbicides were available.
However, the US Department of J ustice has already conducted an inquiry
into possible anti-competitive conduct in the glyphosate-based herbicide
industry, which it completed in 2004 without requiring Monsanto to take any
action.
3.6 Competition between generic companies
Unsurprisingly, generic companies tend to compete with each other along
similar lines as with the major R&D-based companies, with price,
formulations and mixtures being the primary mechanisms. Competition over
price is obviously fiercest amongst those companies that produce technical
grade ais, because, aside from the quality of the ai, price is the only way to
differentiate between the ais produced by different companies.
In addition to price, companies that develop novel formulations and mixtures
can compete on the basis of the effectiveness of their products, while those
companies that produce branded products can build up a reputation for that
brand. As Brian Benson, Group General Manager of Agriculture at Nufarm,
has said: We do believe that if you offer the customer a way of doing
business if you make the customer promises, then you meet that customer
promise you will establish a reputation with the customer for meeting and
exceeding their requirements and their needs. And if you do that the
customer will develop a relationship with your company, with your company
brand name, and be more likely to buy products from you.
However, generic companies also compete with each other in a fairly unique
way, based on the fact that they have a certain amount of choice over which
ais they actually produce. R&D-based companies tend only to compete with
generic producers over those post-patent ais that they originally developed.
Generic companies, on the other hand, can choose their products from a
whole range of post-patent ais. The specific ais and products that they
decide to manufacture will probably depend on a number of factors, such as
size of the market, the companys chemical expertise, the precise patent
position of the ai and how many other generic companies also manufacture
the ai.
The size of the market is probably the single most important factor, as can
be seen from Table 3.4. Glyphosate is by far the biggest selling pesticide ai
in the world, with annual sales of around $5,000 million, and so it is not
surprising that it is manufactured by a large number of generic companies.
But it is the size of a generic pesticide companys domestic market that
usually has most influence over the ais that it manufactures. Of the top 10
most manufactured ais in Table 2.4, five of them are insecticides. This
reflects the fact that a large number of generic pesticide producers are
based in countries with hot regions, such as India, where insects are the
main crop pest and the demand for insecticides is great. The other
herbicides in the top 10 are 2,4-D and paraquat, which are both widely used
throughout the world, and the top 10 also contains two of the largest selling
fungicides, carbendazim and mancozeb.
Table 3.4: Most popular post-patent ais by number of generic
manufacturers
Active ingredient Activity Number of generic
manufacturers
1

Glyphosate Herbicide 43
Imidacloprid Insecticide 40
Chlorpyrifos Insecticide 37
Cypermethrin (+ alpha) Insecticide 36
Carbendazim Fungicide 27
2,4-D Herbicide 25
Mancozeb Fungicide 25
Acephate Insecticide 24
Paraquat Herbicide 24
Abamectin Insecticide 23
Acetamiprid Insecticide 23
Propiconazole Fungicide 23
Tebuconazole Fungicide 23
Lambda-cyhalothrin Insecticide 21
Dimethoate Insecticide 19
Malathion Insecticide 18
Chlorothalonil Fungicide 17
Carbofuran Insecticide 16
Pendimethalin Herbicide 16
Atrazine Herbicide 15
Deltamethrin Insecticide 15
Endosulfan Insecticide 15
Hexaconzole Fungicide 15
Metsulfuron-methyl Herbicide 15
Butachlor Herbicide 14
Dichlorvos Insecticide 14
Metalaxyl Fungicide 14
Quizalofop-P Herbicide 14
Diuron Herbicide 13
Methamidophos Insecticide 13
Monocrotophos Insecticide 13
Bifenthrin Insecticide 12
Methomyl Insecticide 12
Profenofos Insecticide 12
Propanil Herbicide 12
Trifluralin Herbicide 12
Alachlor Herbicide 11
Amitraz Insecticide 11
Imazethapyr Herbicide 11
Oxyfluorfen Herbicide 11
Parathion-methyl Insecticide 11
Permethrin Insecticide 11
Quinalphos Insecticide 11
Note: 1. Number of generic manufacturers taken from Volume 2.
Indeed, insecticides dominate Table 3.4, accounting for practically half of
the entries. However, their precise placing in the table demonstrates the
influence of factors other than market size, particularly the age of the ai. For
example, the insecticide imidacloprid has been the second largest selling
pesticide ai in the world for a number of years, but in the 2005 edition of
this report it was only the sixth most manufactured pesticide (with 20
generic manufacturers). In this edition, however, it has moved up to second
place behind glyphosate, mirroring the global sales ranking.
This is probably due to the fact that in 2005 imidacloprid had only recently
begun to lose its patent protection and many generic companies had not yet
developed the necessary manufacturing technology. But just two years later,
the number of companies able to produce imidacloprid has almost doubled.
Other ais that are now produced by many more generic companies include
the insecticide abamectin (from 7 in 2005 to 23 in 2007) and the fungicide
tebuconazole (from 5 in 2005 to 23 in 2007).
Similarly, of the 10 new ais profiled in Volume 1 of this report, only the
herbicide quizalofop appears in Table 2.4. Once again this is because most
of these ais have only recently begun to lose their patent protection and so
most generic companies have not yet set up the necessary manufacturing
infrastructure (they also probably dont want to produce an ai that is still
patent-protected in most major markets). For example, the insecticide
fipronil and the fungicide kresoxim-methyl both generate substantial sales
(over $400 million), but they are currently produced by only four and five of
the generic manufacturers profiled in Volume 1, respectively.
This also helps to explain why older pesticide ais such as acephate and
paraquat are quite high up the list, because plenty of companies have the
required manufacturing technology and the demand for them is still quite
high in many countries.
The specific portfolio of pesticide ais that a company produces can be a
competitive advantage. Some generic companies try to supply as many ais
as possible, often by forming networks with other generic companies (as in
China), while others tend to focus on a smaller range of ais or deliberately
target ais that arent manufactured by many other companies.
For example, Excel Crop Care has a fairly small pesticide portfolio, based on
only five ais. But they are some of the worlds best-selling generic ais, such
as the herbicide glyphosate and the insecticides imidacloprid and
chlorpyrifos, and Excel Crop Care is thus one of Indias largest generic
producers. Meanwhile, IQV mainly manufactures copper-based fungicides,
which are not widely manufactured by other generic producers.
Chapter 4: Global Generic Agrochemical Market Generic Pesticides: Volume III Business Strategies
CHAPTER 4
GLOBAL GENERI C AGROCHEMI CAL MARKET
The global pesticide market was worth around $32,000 million in 2006,
exactly the same as in 2004, reflecting the fact that business conditions
have been fairly stagnant since the previous edition of this report. Unlike in
2004, however, when North America and Europe had equal largest shares of
the global market, Europe is now in first place, followed by Asia-Pacific, with
North America in third place (see Table 4.1). This reflects the fact that
although the global pesticide market has been generally stagnant, certain
regional and country markets are growing much faster than others. For
example, the pesticide market in Eastern Europe has experienced healthy
growth rates, which has prevented the overall European market from
contracting, while growth in China has driven much of the growth in the
Asia-Pacific market. In contrast, the markets in North America have been
shrinking.
Table 4.1: Global pesticide sales by region, 2006 ($ million)
Region Total sales
1
%
Europe 8,500 27
Asia-Pacific 7,750 24
North America 7,250 23
South America 6,500 20
Rest of the world 2,000 6
Total 32,000 100
Note: 1. Figures rounded up to the nearest $250m.
The global agrochemical market is essentially made up of sales of two types
of pesticide ais proprietary pesticides and off-patent pesticides. Proprietary
pesticides are those that still have patent protection and so are only sold by
the developing company or approved licensees. Off-patent pesticides are
those that have lost their patent protection and can be sub-divided into two
classes: proprietary off-patent pesticides, which are produced and sold by
the original developing company; and generic pesticides, which are off-
patent pesticides that are produced and sold by companies other than the
original developing company.
Although off-patent products account for the majority of global pesticide
sales (6070%), in many countries, especially developed ones, the R&D-
based agrochemical companies still dominate the market for off-patent
pesticides. This means that generic pesticide producers probably generate
2030% of global pesticide sales, valuing the global generic pesticide market
at $6,400$9,600 million. These sales are spread highly unevenly over the
world, with generic producers generating 75% of the pesticide sales in China
but practically nothing in J apan.
The share of a countrys pesticide market taken by generic products
depends on a number of factors, including: ease of registration for generic
products; presence of the major R&D-based agrochemical companies in the
region; level of patent and environmental legislation; nature of the
agricultural industry; and number of generic pesticide producers. As such,
generic pesticides tend to account for a larger share of the market in
developing countries than in developed countries.
The centre of the global generic pesticide industry seems slowly to be
shifting from the western world to south-east Asia. Hundreds of generic
pesticide companies are now based in China and India, which between them
account for well over half the companies profiled in the first report (see
Table 4.2). These companies sell their products into their rapidly expanding
domestic markets and also export them abroad.
Table 4.2: Geographical spread of companies profiled in the first
report
Regions Number of companies
China 42
India 20
Asia-Pacific 10
Europe (incl. Israel and Turkey) 18
North America 3
Latin America 7
Total 100

In 2005, when the last edition of this report was published, the top nine
generic pesticide companies by sales were all from the developed world,
while Agripec was at number 10. Now United Phosphorus has broken into
the top 10, at number five, while Agripec has progressed to number seven
and Red Sun is at number 10 (see Table 4.3). Nevertheless, the top four
generic pesticide companies are exactly the same and in exactly the same
positions as in the previous edition (not including Monsanto and Griffin).
Table 4.3: Top 50 generic pesticide companies by sales
1

Company Country Annual sales
($m)
1

Year
2

Makhteshim-Agan Israel 1581 2006
Nufarm Australia 1253 2006
Cheminova Denmark 680 2006
Sipcam-Oxon Italy 378 2005
United Phosphorus India 350 2006
Cerexagri US 270 n/k
Agripec
3
Brazil 198 n/k
Isagro Italy 196 2006
Amvac US 194 2006
Red Sun China 153 2005
Xinan Chemical China 138 2005
Rallis India 133 2006
Sanonda China 120 2005
Taminco Belgium 119 2006
Meghmani Organics India 105 2007
Huaxing Chemical China 100 n/k
Rotam Hong Kong 100 n/k
Excel Crop Care India 93 2007
J iangshan Agrochemical China 90 n/k
AH Marks UK 84 n/k
Nagarjuna India 80 2006
Sabero Organics India 75 n/k
Indofil India 70 n/k
J iangsu Suhua Group China 70 n/k
Shenghua Biok China 70 n/k
Changxing Zhongshan China 60 n/k
J ingma Chemicals China 60 n/k
Punjab Chemicals India 60 2006
Shandong Qiaochang Chemical China 60 n/k
IQV Spain 58 2004
Dongbu Fine Chemicals South Korea 53 2004
Sinochem Ningbo China 50 2005
Hektas Turkey 49 2006
Baoling Chemical China 45 2004
Atul India 41 2006
Heben Pesticide China 40 n/k
Hindustan Insecticides India 40 2006
Dhanuka Pesticides India 35 n/k
Good Harvest China 35 n/k
Yongnong Chemical China 35 n/k
Changqing Agrochemical China 33 n/k
Hikal India 33 2006
Zagro Singapore 31 2005
Iprochem China 30 n/k
J iangsu Yangnong Chemical China 30 n/k
Tekchem Mexico 29 2003
AgriGuard Ireland 25 n/k
Baocheng Chemical Industry China 25 n/k
LG Life Sciences South Korea 25 n/k
Luxembourg Industries Israel 25 n/k
Tecnomyl Paraguay 25 n/k
Bharat Group India 24 2004
Fersol Brazil 23 2006
Herbos Croatia 22 2006
Cequisa Spain 19 n/k
Coromandel Fertilisers India 17 n/k
Pinus Slovenia 16 2004
Yancheng Limin China 15 n/k
Quimica Lucava Mexico 13 n/k
Reposo Argentina 13 n/k
Notes: 1 Some entries include non-pesticide sales, see specific company profiles in Volume 1 for
details; 2 Refers to year in which companys fiscal year ended; 3 Estimate based on percentage
reduction from 2005 sales.
The proportion of developing world companies increases as the sales figures
decrease, with Chinese and Indian companies dominating the positions from
11 to 30. Indeed, a large number of Chinese and Indian companies Xinan
Chemical, Rallis, Sanonda, Meghmani Organics, Huaxing Chemical and
Rotam now generate annual sales of $100 million or over.
The major developed world generic pesticide companies are facing
increasing competition from these developing world companies. Many are
responding by shifting their business focus away from generic pesticides
towards proprietary products, which they have been buying from the major
R&D-based agrochemical companies. This process has been fuelled by the
consolidation of the agrochemical industry, which has led many of the
merged multinational companies to sell the rights to some of their
pesticides, often at the instigation of anti-trust authorities.
So, the current largest generic pesticide producers could end up
transforming themselves into more general agrochemical companies, selling
both generic and proprietary products, some of which they might develop
themselves. Meanwhile, the larger Chinese and Indian companies could
grow to become the largest solely generic producers. This will firmly
establish south-east Asia as the centre of the global generic pesticide
industry, both in terms of number of companies and sales.
4.1 North America
The North American market, which encompasses the US and Canada,
generates sales of around $7,250 million a year, with the US accounting for
83%.
Both the US and Canada have a technically-advanced agricultural industry
and generic pesticide manufacturers only account for a minor proportion of
the pesticide market in these countries. This is reflected in the fact that
Volume 1 of this report contains profiles of only three US-based generic
pesticide companies (compared with 42 in China) although two of these
are in the list of top 10 largest generic producers by sales and no
Canadian companies.
4.1.1 United States
The US is the worlds largest national pesticide market, worth $6,026 million
in 2006 according to the industry association CropLife America. However,
the market has recently been contracting, with herbicide sales falling by 6%
in 2006, insecticide sales falling by 10% and fungicide sales falling by 13%.
Herbicides represent the largest section of the US market, at around 65%,
followed by insecticides (20%) and fungicides (10%).
This contraction represents the continuing effect of the uptake of
genetically-modified (GM) crops, especially glyphosate-tolerant soybeans
and insect-resistant maize, by US farmers. GM soybeans the vast majority
of which are tolerant to the herbicide glyphosate accounted for over 90%
of all soybeans grown in the US in 2007. GM maize split fairly equally
between herbicide-tolerant and insect-resistant varieties accounted for
73% of all maize grown in the US in 2007. Nevertheless, soybeans and
maize remain two of the largest crop markets for pesticides in the US (see
Table 4.4).
Table 4.4: US pesticide sales by crop, 2006 ($ million)
Crop Herbicide I nsecticide Fungicide Total
1

Maize 1,140 325 5 1,472
Soybeans 810 60 55 925
Cotton 247 215 4 661
Cereals 375 38 37 454
Rice 96 6 21 125
Sugar beet 72 13 11 97
Sugar cane 30 5 0 35
Sunflowers 30 5 0 35
Oilseed rape 11 2 0 13
Fruit/vegetables 375 446 353 1,223
Others 695 122 138 986
Totals 3,881 1,237 624 6,026
Sources: Philips McDougall/CropLife America/Agrow
Notes: 1. includes other categories.
Despite the recent contraction of the US agrochemical market, it is likely that
the off-patent pesticide market in the US is growing, driven primarily by
increasing sales of glyphosate for use on glyphosate-tolerant GM crops.
Nevertheless, much of the post-patent pesticides sold in the US are still
manufactured by the major R&D-based agrochemical companies, especially
in the case of Monsanto with glyphosate. Generic pesticide companies
probably only account for 1520% of the US pesticide market.
Three US-based generic pesticide companies were profiled in Volume 1 of
this report, two of which are in the global top 10 by sales (Cerexagri, with
annual sales of $270m, and Amvac, with sales in 2006 of $194m). This
reflects the fact that the US pesticide market is large and well developed,
and that US generic pesticide companies have to be of sufficient size to
compete with the major R&D-based agrochemical companies.
In the previous edition of this report, the US companies Monsanto and
Griffin were also profiled, because they are major producers of post-patent
pesticides, albeit ones that they or their parent company originally
developed. However, for this edition, only companies producing post-patent
pesticide ais that they did not originally develop were profiled.
The US market is also well regulated and companies launching new pesticide
products need to have the financial and scientific resources necessary to
complete the registration process. The regulation of pesticides in the US is
covered by FIFRA, which was amended in 1988. This amendment instigated
a programme requiring all ais registered before November 1984 to have
their registrations reviewed. This applied to 1,150 ais in 45,000 formulated
products, with the review programme to be carried out by the Office of
Pesticide Programs (OPP), which is part of the US EPA.
In 1996, the FQPA came into force, widening the scope and considerations
that needed to be applied regarding pesticide safety. As part of the FQPA,
the EPA now has to assess the cumulative risks of certain pesticide groups
with a common mechanism of toxicity, such as organophosphorus
insecticides.
When the EPA completes the review and risk management assessment for a
pesticide that is subject to re-registration, it generally releases a Re-
registration Eligibility Decision. This summarises the risk assessment
conclusions and outlines any risk reduction measures necessary for the
pesticide to continue to be registered in the US. If the ai is also part of a
group undergoing a cumulative assessment, the EPA releases an Interim Re-
registration Eligibility Decision, which is finalised on completion of the
cumulative assessment.
This review programme was essentially completed in 2006 and did not result
in as many generic ais being removed from the market as in the EU (see
Chapter 2). However, in 2007, the OPP started a new 15-year review
programme, which aims to review pesticide registrations every 15 years. The
OPP has already detailed which ais it plans to review from 2007 to 2010 and
has also released work dockets for the first nine ais entering the
programme.
4.1.2 Canada
The Canadian pesticide market was worth Can$1,346 million ($1,184 million)
in 2006, according to the industry association CropLife Canada, with the
agriculture-heavy region of Western Canada accounting for around three-
quarters of sales.
Canada is probably similar to the US in terms of the share of the pesticide
market held by generic pesticide companies (1520%). However, none of
the generic pesticide companies profiled in the first report are Canadian
(although Pilarquim now has its corporate headquarters in Canada).
4.2 Europe
The European pesticide market is worth around $8,500 million a year, with
the market in Western Europe generating the vast majority of these sales
(around 80%). France is by far the largest single country market, with
annual sales of Euro 1,721 million ($2,305 million) in 2006. Other large
markets include Germany ($1,373 million in 2005), Italy ($922 million in
2005), the UK ($720 million in 2004) and Spain ($443 million in 2006).
France is also Europes largest agricultural producer, with over 19 million ha
of cultivated land (arable land and permanent crops) in 2005. Other large
producers include Spain (16.1 million ha), Germany (12.1 million ha), Poland
(10.6 million ha), Italy (9.1 million ha) and the UK (6.1 million ha). The
major crops grown in European countries tend to be fairly similar, with
cereals forming the single largest crop in almost every European country
(see individual country profiles). In Mediterranean countries, such as France,
Spain and Italy, grape vines and fruit are also important crops.
Unsurprisingly, France, Germany, Spain, Italy and the UK also comprise the
largest users of pesticides in Europe (accounting for 75% of all applied
pesticides), although pesticide use does not correspond directly with the size
of the market. France is by far the largest pesticide user, applying over
60,000 tonnes of pesticides in 2003, but it is followed by Spain and Italy
(which both applied over 30,000 tonnes in 2003), with Germany (23,000
tonnes) and the UK (15,000 tonnes) bringing up the rear.
So although Spain and Italy use more pesticide ais than Germany, they
actually have smaller markets. This implies that northern European countries
such as Germany and the UK use more expensive pesticides than southern
European countries such as Italy. This supposition is supported by the fact
that Italian farmers use huge amounts of cheap, sulphur-based fungicides
(with over 9,500 tonnes applied in 2003, mainly to grape vines; although
this was down from over 20,000 tonnes in 2002). Whereas the most popular
pesticide in Germany is the more expensive herbicide isoproturon (with just
over 3,000 tonnes applied to cereal crops in 2003).
Herbicides and fungicides are the most commonly used pesticides in Europe,
accounting for around 50% and 40% of pesticide use respectively, with
insecticides accounting for only around 10%.
On the face of it, the European pesticide market looks fairly healthy.
According to the European Crop Protection Association (ECPA), over the past
five years the crop protection market in Europe has experienced the greatest
growth of any region in the world, at 6.4% a year.
But almost all of this growth has been generated by the former communist
satellite states of Eastern Europe. Between 2000 and 2004, BASF estimates
that the crop protection markets in the 10 countries that joined the EU in
May 2004 (eight of which were from the former Eastern Europe) grew by
36%. In contrast, over the same period, the crop protection markets of the
15 existing west European members fell by 12%.
More recently, pesticide sales grew by 2.4% in Eastern Europe during 2006,
but fell by over 4% in Western Europe, according to the UK consultancy
Cropnosis. While for 2007, Cropnosis has predicted that sales in Western
Europe will grow by just 0.7%, but that sales in Eastern Europe will grow by
almost 7%.
As in the US, exact information on the size of the generic pesticide market is
unknown, although generic pesticide companies probably account for a
similar share of the market (1520%). There are 18 European companies
(including those based in Israel and Turkey) that were profiled in Volume 1
(see Table 4.5), with the largest being MAI (sales of $1,581 million in 2006),
Cheminova ($680 million in 2006), Sipcam-Oxon ($378 million in 2005) and
Isagro ($196 million in 2006).
Table 4.5: List of European manufacturers profiled in Volume 1 by
country
Company Country Company Country
Taminco Belgium Organika-Sarzyna Poland
Cheminova Denmark Sipcam-Oxon Italy
Agro-Chemie Hungary Oltchim Romania
AgriGuard Ireland Pinus Slovenia
Barclay Chemicals Ireland Cequisa Spain
Luxembourg Industries Israel IQV Spain
MAI Israel Atabay Turkey
Chemia Italy Hektas Turkey
Isagro Italy AH Marks UK

In the 27 European countries that are members of the European Union (EU),
which includes all the main agricultural producers, pesticide products are
regulated by the pesticide registration directive (91/414/EEC), which was
introduced in 1991. The main intention of this directive was to harmonise
the registration of new pesticide ais at the EU level, but it also required that
over 800 ais then being sold in pesticide products throughout Europe have
their registrations renewed.
This review programme has resulted in quite a few older generic pesticides,
including atrazine, simazine, acephate and benomyl, being removed from
the European market. It has also taken much longer than was originally
envisaged and the whole review process will probably not now be finished
until 2008.
Much of the delay was caused by the intricacies of the new registration
process, which took a long time to run smoothly. A company wishing to
register a new ai or support an existing ai through the review process must
initially submit an array of scientific studies to the European Commission.
This information is first assessed by one of the member states pesticide
regulatory authorities, which then submit a report on the ai to the European
Food Safety Authority (EFSA). After reviewing the report, EFSA makes a
recommendation to the European Commissions Standing Committee on the
Food Chain and Animal Health (SCFCAH) on whether or not the ai should be
included in Annex 1 of the directive. A final decision on inclusion is then
made by the Standing Committee. Finally, this decision is officially confirmed
by the European Commission, which details any conditions on inclusion or
the time-scale for withdrawal if the ai is to be excluded.
Once an ai has been approved at the European level, it should then be a
fairly simple process for a company to register individual pesticide products
containing the ai at the member state level, although they still have to
register the product separately in each country.
Over the past couple of years, the Commission has been considering a
number of amendments to the pesticide registration directive, in light of its
experience in implementing the directive. One of the most important
potential amendments for the European generic pesticide industry concerns
data protection.
Under 91/414, any proprietary data submitted by a company to support the
registration of a novel ai are protected for 10 years, while any data
submitted to support the review of an existing ai are protected for five
years. ECCA has long claimed that the current data protection provisions
place generic pesticide companies at a severe disadvantage. This is because
companies applying to register generic versions of ais that have been
included in Annex 1 of the pesticide registration directive (91/414/EEC) must
prove that the generic ai is equivalent to the original ai. They must also
prove that they have access to a complete registration data package.
Companies can demonstrate equivalence by submitting a five-batch analysis,
which considers physico-chemical properties and toxicity. But proving that
they have access to a complete data package, which consists of both
unprotected and protected studies, is more problematic. This is because it
can be difficult for generic companies to establish which of the studies used
by the first applicants are protected and which are unprotected.
Furthermore, the original applicants are currently under no obligation to
share this protected data with generic applicants. This means that
companies wanting to register a generic pesticide product often have to
produce a complete data package from scratch, with the associated cost.
In its proposed amendment to 91/414, the Commission attempted to resolve
some of these problems. In April 2005, it issued draft proposals requiring
member states to provide interested parties with information on the studies
used for Annex 1 listing and on claims for protected data. These proposals
also included details on a compulsory data sharing and compensation
system for registering generic products, in which companies would have to
agree on compensation for the use of proprietary registration data
generated by the original applicant. If agreement could not be reached, an
independent arbitrator would set the compensation level. In later proposals,
the Commission also suggested removing any protection for new data
generated for the review of existing ais and products.
Other proposals included introducing a centralised system for approving
individual pesticide products, rather than requiring companies to register the
products separately in each member state. The proposed system would
evaluate and register products at an EU level or on a zonal level for regions
with similar climate or agricultural conditions, with the Commission favouring
registration within three zones: northern, central and southern Europe. The
Commission also proposed a scheme to ban ais based on hazard criteria,
which means that an ai could be excluded from Annex 1 if it exceeds a
single hazard cut-off value.
The Commission produced the final version of its proposals in J uly 2006.
This incorporated the introduction of hazard-based criteria and the zonal
approval system. It also included the requirement for member states to
provide details of protected data and the removal of protection for ai review
data. But the Commission pulled back from introducing a compulsory data
sharing and compensation system, with the proposed regulatory amendment
stating instead that companies should take all reasonable steps to reach
agreement on the sharing of any test and study reports.
At the end of October 2007, the proposed amendment was debated by the
European Parliament, which approved the data protection and hazard-based
criteria proposals but rejected the zonal approval system. The amendment
will now progress to the EU Council of Ministers for consideration and should
come into force in 2008 after the current review programme for existing ais
has been completed.
Pesticides are also affected by a range of other current and proposed pieces
of EU legislation. These include: the proposed thematic strategy on the
sustainable use of pesticides, which includes firm targets for reductions in
pesticide use; the Commissions proposed surface water directive, which
could lead to pesticides detected in surface waters being banned; and
REACH (Registration, Evaluation, Authorisation and Restrictions of
Chemicals), which doesnt apply to pesticide ais but does apply to chemical
intermediates and co-formulants.
4.2.1 France
France has the largest pesticide market in Europe and the fifth largest
pesticide market in the world, worth Euro 1,721 million ($2,305 million) in
2006 according to the French agrochemical industry association, the UIPP.
However, the French market has declined over the past decade, with sales
falling by 20% from 1999 to 2006, and it was recently overtaken by the fast-
growing Chinese market. Herbicides account for the majority of the market,
generating 42% of sales in 2006, followed by fungicides (38%) and
insecticides (9%).
The main crops grown in France by area are wheat, maize and oilseed rape.
Around 60,000 tonnes of pesticide ais were applied in France in 2003, with
the majority of ais applied to cereals and grape vines. Popular ais include:
the herbicides glyphosate and isoproturon on cereals, and trifluralin on
maize; and the fungicides folpet, mancozeb and sulphur on grape vines.
4.2.2 Germany
The German pesticide market was worth Euro 1,098 million ($1,373 million)
in 2005, according to the German agrochemical industry association, the
IVA. This represents an increase of almost 3% on 2004. Herbicides account
for the vast majority of the market, generating 50% of sales in 2005,
followed by fungicides (33%) and insecticides (3%).
The main crops grown in Germany by area are wheat, barley, maize and
oilseed rape. Around 23,000 tonnes of pesticide ais were applied in 2003,
with the majority of ais applied to cereals and grape vines. Popular ais
include: the herbicides isoproturon and glyphosate on cereals; and sulphur-
based fungicides on grape vines.
4.2.3 Italy
The Italian pesticide market was worth Euro 740 million ($922 million) in
2005, up by 1.8% on 2004, according to the industry association Agrofarma.
Fungicides accounted for the largest share of the market (around 40%),
followed by herbicides (33%) and insecticides (26%).
The main crops grown in Italy by area are wheat, maize and grape vines.
Over 30,000 tonnes of pesticide ai were applied in 2003, with the majority of
ais applied to cereals, maize, grape vines, tree fruits and vegetables. Popular
ais include: the fungicides mancozeb and sulphur on grape vines; and
sulphur-based fungicides on tree fruits.
4.2.4 Spain
The Spanish pesticide market was worth Euro 556 million ($443 million) in
2006, according to the Spanish agrochemical association, AEPLA. This
represents a rise of less than 3% on 2005, when the value of the Spanish
market fell by 14% due to a combination of falling prices, agricultural
reforms, higher production costs and adverse weather conditions. Herbicides
accounted for the majority of the market (35%), followed by fungicides
(25%) and insecticides (23%).
The main crops grown in Spain by area are wheat, barley, oil seed rape,
grape vines and fruit trees. Over 31,000 tonnes of pesticide ais were applied
in 2003, with the majority of ais applied to cereals, citrus fruits, grape vines
and vegetables. Popular ais include: the herbicides glyphosate and 2,4-D on
cereals; and sulphur-based fungicides on grape vines and vegetables.
4.2.5 UK
The UK pesticide market was worth 400 million ($720 million) in 2004, an
increase of 11% on 2003. Herbicides accounted for the largest share of the
market (45%), followed by fungicides (38%) and insecticides (7%).
The main crops grown in the UK are cereals, particularly wheat. Around
15,000 tonnes of pesticide ai were applied in 2003, with the majority of ais
applied to cereals and potatoes. Popular ais include: the herbicides
isoproturon and glyphosate on cereals; and the fungicide mancozeb on
potatoes.
4.2.6 Eastern Europe
The Eastern European pesticide market is currently worth around $1,750
million a year, almost four times smaller than the Western European market.
However, unlike the static or declining pesticide markets in Western Europe,
the Eastern European pesticide market has been growing over the past few
years and this growth looks set to continue (see section 3.2).
This should especially be the case for the eight Eastern European countries
that joined the European Union in 2004 Poland, the Czech Republic,
Hungary, Slovakia, Lithuania, Latvia, Slovenia and Estonia and the two
countries that joined in 2007 Romania and Bulgaria. Agriculture is still a
major industry in many of these countries and their farmers should greatly
benefit from the injection of funds from the EUs Common Agricultural
Policy, which should allow them to take greater advantage of pesticides.
4.3 Asia-Pacific
The pesticide market in Asia-Pacific is worth around $7,750 million a year,
with J apan and China accounting for the largest shares of the market in
2006, with 37% and 31% respectively.
In many countries in Asia-Pacific, generic pesticides account for the largest
share of the pesticide market and there are a huge number of generic
producers throughout the region. The first report in this series contained
profiles of 10 companies from the Asia-Pacific region (see Table 4.6), not
including China and India (which between them accounted for over half of
the companies profiled in the report).
Table 4.6: List of Asia-Pacific manufacturers profiled in Volume 1
by country (not including China and India)
Nufarm Australia Dongbu Fine Chemicals South Korea
Rotam Hong Kong LG Life Sciences South Korea
PT Petrosida Gresik Indonesia Hui Kwang Taiwan
Kenso Corp Malaysia Pilarquim Taiwan
Zagro Singapore Sinon Taiwan

Table 4.6 also reaffirms Chinas place as the head of the global generic
pesticide industry (at least in terms of number of companies), as four of the
companies are based in Hong Kong and Taiwan, which are officially Chinese
territories. Unsurprisingly, the largest of the companies in Table 4.6 are
based in two of the regions more developed economies, Australia (Nufarm)
and South Korea (Dongbu Fine Chemicals and LG Life Sciences).
4.3.1 J apan
The J apanese pesticide market is currently the third largest in the world,
after the US and Brazil. However, the J apanese market has been generally
shrinking over the past few years (by 15% between 2000 and 2005), as
consumers grow more concerned about pesticide residues and the J apanese
government implements stricter environmental regulations.
In the year ending September 2006, pesticide sales in J apan increased
slightly (0.5%) to 330,932 million ($2,850 million), according to the J apan
Crop Protection Association. However, in volume terms, sales fell by 2.1% to
230,568 tonnes. In a few years time, if this trend continues, the J apanese
pesticide market will be overtaken by the fast-growing Chinese market (see
section 4.3.2). In the first eight months of 2006/07 (1 October 2006 to 31
May 2007), pesticide sales fell by 0.9% on the same period last year to
247,232 million ($2,079 million), while volume sales fell by 7.4% to
156,733 tonnes.
The vast majority of pesticide products in J apan are supplied by R&D-based
agrochemical companies, whether J apanese or foreign, with products from
generic producers accounting for under 5% of the market. For instance,
J apan should theoretically be an extremely attractive market for Chinese
pesticide manufacturers. However, although Chinese companies can supply
technical ais to J apanese companies, no Chinese producer has yet obtained
a J apanese registration for a formulated product.
The J apanese pesticide market is fairly evenly split between herbicides
(32%), insecticides (36%) and fungicides (29%), with herbicides mostly
used on paddy rice, and insecticides and fungicides predominantly used on
vegetables (see Table 4.7).
Table 4.7: J apanese agrochemical sales by crop, 200506
1

Crop Volume Value
Tonnes % million %
Paddy rice
2
94,858 41 118,220 36
insecticides 23,446 25 15,309 13
fungicides 14,366 15 15,981 13
insecticides/fungicide 23,520 25 31,417 27
herbicides 33,526 35 55,513 47
Vegetables/field crops
2
88,616 38 113,036 34
insecticides 48,826 55 55,725 49
fungicides 27,606 31 37,288 33
insecticides/fungicides 997 1 655 1
herbicides 11,187 13 19,368 17
Fruit
2
22,619 10 53,031 16
insecticides 11,003 49 24,676 47
fungicides 7,059 31 18,785 35
insecticides/fungicides 41 - 61 -
herbicides 4,516 20 9,509 18
Other crops 17,749 8 34,001 10
Unclassified 6,726 3 12,644 4
Total
2
230,568 100 330,932 100
Source: J CPA and Agrow
Notes: 1. Year ended 30 September 2006; 2. Totals may not add up due to rounding.
J apan does not really have a generic pesticide industry and none of the 100
companies detailed in the first report are J apanese. This is because J apan
has a number of major R&D-based companies, such as Kumiai Chemical,
Nissan Chemical and Sumitomo Chemical, which between them dominate
the domestic pesticide market. Only the major R&D-based agrochemical
companies have been able to challenge this dominance, and then only fairly
recently.
Up until 2003, registration of pesticides in J apan involved three government
ministries. The Ministry of Agriculture, Forestry and Fisheries was
responsible for evaluating the safety of pesticide products; the Ministry of
the Environment (MoE) was responsible for evaluating crop residue and
environmental fate data; and the Ministry of Health Welfare and Labour was
responsible for reviewing toxicology data and reported its findings to the
MoE to help establish directions for safe use.
Then, in 2003, the J apanese government amended J apans Pesticide Law
and brought in a new Basic Law for Food Safety. Among other measures,
these new regulations established a Committee for Food Safety, which
operates independently of the three ministries in evaluating risks to food
safety and advising the ministries on ways to minimise risk.
The amendments to J apans Pesticide Law were prompted by the discovery
in 2002 of the widespread circulation of unapproved pesticides in J apan. The
new amendments extended existing controls banning the sale of
unregistered pesticides, in order to prohibit the manufacture and import of
these products. In addition, the amended law also increased the number of
ais banned in J apan. These now include: the fungicides captafol,
hexachlorobenzene, quintozene and mercury-based products; the
insecticides/acaricides aldrin, cyhexatin, dieldrin, DDT, endrin, parathion-
ethyl and parathion-methyl; and the herbicides chlornitrofen and
pentachlorophenol.
Despite being a free-market economy, the J apanese pesticide market is still
heavily protected and the opportunities for foreign generic pesticide
companies to enter the market are minimal.
4.3.2 China
China has the fourth largest pesticide market in the world, worth $2,421
million in 2006 according to the marketing and consultancy company ARN.
The Chinese market is also growing fast, at 79% a year. This means that,
having recently overtaken the French market, it is all set to overtake the
J apanese market by 2010 to become the third largest market. Furthermore,
unlike in the major Western markets, generic pesticide products account for
the vast majority (around 75%) of the domestic pesticide market.
Around 500 million hectares are treated with pesticides in China each year,
with vegetables, rice and wheat accounting for half of all pesticide usage
(see Table 4.8).
Table 4.8: Pesticide usage in China, 2002
Crop % usage
Vegetables 23.8
Rice 18.1
Wheat 10.4
Citrus 8.2
Cotton 7.4
Apples 5.8
Soybeans 4.8
Maize 3.8
Other 17.7
Source: Agrow
Insecticides account for the largest share of the Chinese pesticide market,
with around 54%, followed by herbicides (30%) and fungicides (25%).
Although insecticide use has steadily increased over the past few years, the
specific insecticide products being used is beginning to change. This is being
driven by the Chinese Ministry of Agriculture, which is gradually phasing out
many older, toxic pesticides, especially organophosphporus insecticides, due
to environmental concerns.
From 1 J anuary 2005, methamidophos, monocrotophos, parathion-ethyl,
parathion-methyl and phosphamidon could only be used on cotton, rice,
maize and wheat, and they were then completely banned from 1 J anuary
2007. The Ministry expects that these organophosphorus insecticides will be
replaced by the less toxic pyrethroids, pyridines, pyrazoles and insect growth
regulators. To assist this process, it planned to provide Yuan 5,000 million
($600 million) in loans to help the domestic pesticide industry produce these
alternative products.
The most popular pesticide ais in China, with annual demand of over 10,000
tonnes, currently include: the insecticides bisultap, dichlorvos and phoxim,
the herbicides acetochlor and glyphosate, and the fungicide copper sulphate.
Those ais with annual demand of 8,00010,000 tonnes include the
insecticide trichlorfon and the fungicide carbendazim. Those reaching the
5,0008,000 range include: the insecticides dimethoate, monosultap and
omeathoate; the herbicide butachlor; and the fungicides mancozeb and
thiophanate-methyl.
As a communist country, Chinas pesticide market and product distribution
system is fairly centralised, although this is beginning to change as a result
of the country joining the WTO in 2001. For instance, until recently, Western
crop protection companies could only distribute their pesticide products
through a network of provincial wholesalers that form a state-owned co-
operative system known as AMPC (Agricultural Means and Production of
China). The AMPC wholesalers supply 8,00010,000 regional dealers, who
then supply 300,000400,000 individual retailers.
The main problem with this arrangement for Western companies was that
the AMPC wholesalers didnt undertake any promotional activity. This meant
that Western companies still needed to establish their own country-wide
marketing and sales networks, but without being able to use them to sell
directly to retailers.
Chinese pesticide companies, on the other hand, were allowed to sell
directly to retailers, although many of the smaller companies also distributed
their products through the AMPC. Up until 2001, the only way that Western
companies could get around this restriction was to form a joint venture with
a Chinese company, with the Western company obliged to invest over $30
million into the venture. This joint venture could then supply its products to
any level of the distribution chain.
Then, at the end of 2001, China became a member of the WTO and this
helped to open up the Chinese pesticide market to foreign companies. From
2005, any wholly-owned Chinese subsidiary of a foreign crop protection
company can distribute its products directly to retailers without any
restrictions.
China has a thriving and expanding generic pesticide industry, which
dominates the domestic market and also exports a great deal of its output.
Pesticide products manufactured by domestic companies account for over
75% of the Chinese pesticide market by sales, but account for over 90% of
all pesticides applied, because foreign products cost on average 2.8 times
more than domestic products. Chinese pesticide exports total around $450
million a year, accounting for around 15% of total pesticide production.
There are around 2,500 pesticide companies in China. Most of these
companies are formulators, with only just over 500 companies able to
manufacture technical grade ais. Nevertheless, Chinese companies formed
the largest proportion of those profiled in Volume 1 of this report, with 42
entries (see Table 4.9).
Table 4.9: List of Chinese manufacturers profiled in Volume 1
Company Company
AgroDragon J ingma Chemicals
Baocheng Chemical Kangmei Chemical
Baoling Chemical Lanxi Agrochemical
CAC Limin Chemical
CCI Group Nanjing Agrochemical
Changqing Agrochemical Nutrichem Laboratory
Changxing Zhongshan Qinfeng Agrochemical
Dacheng Pesticide Red Sun
Feixiang Chemical Sanonda
Fujian Sannong Shandong Qiaochang Chemical
Good Harvest Shandong Vicome Greenland
Green Agrosino Sinochem Ningbo
Greenchem Industries Shenghua Biok
Heben Pesticide Suzhou Worldbest
Henglong Pesticide Tide Group
Hisun Chemical Wangs
Huaxing Chemical Xinan Chemical
Iprochem Xinyi Pesticide
J iangshan Agrochemical Yancheng Limin
J iangsu Suhua Group Yongnong Chemical
J iangsu Yangnong Zibo Nab Agrochemicals

The Chinese pesticide market is dominated by Chinas largest pesticide
producers. According to the Chinese consultancy EChinaChem, the 10
largest Chinese pesticide producers have a 29% share of the Chinese
market, while the next 40 largest companies have a 25% share. This means
the remaining 2,450 generic producers in China have to make do with under
half of the market.
Furthermore, the large number of companies means that the production
capacity of the Chinese pesticide industry currently far exceeds demand,
despite the healthy growth rates of the domestic market. For example, in
2006, Chinese manufacturers produced 1.3 million tonnes of pesticide ais,
but domestic demand was only around 300,000 tonnes while exports were
around 400,000 tonnes. This means that Chinese manufacturers produced
around 600,000 tonnes of excess pesticide ais.
This overcapacity has led to claims that some Chinese manufacturers are
exporting certain pesticide ais, such as glyphosate, at prices lower than the
cost of production (so-called dumping) to Australia and certain EU countries.
While the Australian Customs Service has dismissed complaints of
glyphosate dumping, the European Commission has invoked duties on
Chinese glyphosate exports.
Red Sun is the largest Chinese pesticide company, while Syngenta is the
R&D-based agrochemical company with the largest pesticide sales in China
(see Table 4.10). The sales figures for the Chinese and foreign
manufacturers in Table 4.10 are not directly comparable, because the
Chinese manufacturers did not generate all of their sales in China.
Nevertheless, it does demonstrate that the largest Chinese manufacturers
are able on a par with the R&D-based multinationals in the Chinese market.
Table 4.10: Top five Chinese and foreign pesticide manufacturers
by sales ($ million)
Chinese manufactures Foreign manufacturers
Company
1
Annual
sales
Company Annual
sales
2

Red Sun 153 Syngenta 100
Xinan Chemical 138 Bayer CropScience 95
Sanonda 120 Dow AgroSciences 61
Huaxing Chemical 100 Monsanto 50
J iangshan Agrochemical 90 DuPont 38
Source: ARN and Agrow
Notes: 1. Top five as detailed in Agrows Complete Guide to Generic Pesticides: Volume 1 The
companies. 2. Sales figures are estimates derived from market share information for 2005.
As part of joining the WTO, the Chinese government has been overhauling
its regulations covering both pesticide registration and intellectual property
rights. In addition to phasing out older organophosphorus insecticides, the
ICAMA is reviewing 379 pesticide ais that received a provisional registration
before 23 J uly 1999, which includes a large number of generic pesticide ais.
The ICAMA has split the ais into four groups and is currently working with
pesticide manufacturers to generate the required registration data. It plans
to complete this review programme by the end of 2008. However, the
ICAMA has already started to phase out registrations for older pesticide ais
such as phorate, carbofuran, aldicarb and methomyl.
The ICAMA has also continued to amend Chinas pesticide registration
regulations it has revised them three times since 1988 in order to bring
them in line with international standards. These revisions have mainly
involved increasing data requirements in toxicology, pesticide residues,
environmental ecology and crop safety.
The Chinese registration process currently operates in three stages. Initially,
companies must apply to carry out field trials. The ICAMA's review of these
applications lasts for one month. Field trial data is then used in applications
for temporary registration. Evaluation of these applications takes up to three
months. This allows further trials to be carried out to generate detailed
registration data and also allows field demonstrations and test marketing to
be carried out within a specified area. Temporary registrations have to be
renewed every year and can last for a maximum of four years. Finally, an
application is made for full registration. The evaluation of this can take up to
one year. This allows full commercial distribution and sale.
Through its amendments, the ICAMA is trying to encourage the development
of new products and reduce the number of generic products. Registrations
are now only granted to generic products if six years have elapsed since the
first full registration or if the second registrant has permission to use the
original data. Within the six-year data protection period, data requirements
are the same as for the original product. After six years, certain efficacy,
toxicity, environmental and residue data are not required for further
registrations.
The ICAMA is also looking to harmonise its pesticide regulations with
international standards. In particular, it plans to: make evaluation
procedures more scientific, fair and transparent; establish a Good Laboratory
Practice (GLP) system; and implement the Mutual Acceptance of Data
system that was developed by the Organisation for Economic Co-operation
and Development (OECD).
In addition to its registration regulations, China is also tightening its
pesticide production regulations, in order to place more emphasis on the
environment. Under the new rules, new pesticide production facilities must
be cited away from urban areas and water sources, and must have adequate
waste treatment and disposal systems. All applications to produce pesticides
must also now be accompanied by an environmental risk assessment. It has
even been alleged that the Chinese authorities are closing pesticide factories
within a 100-mile radius of Beijing, in order to ensure that the air is clean for
the start of the Beijing Olympics in 2008.
Furthermore, the ICAMA plans to crack down on unregistered and
counterfeit pesticide products, which are estimated to account for 3040%
of all pesticides on the Chinese market. This crackdown will include
implementing a centralised registration and repackaging licence, censoring
advertising and banning outdated production processes. For example, in
March 2004 the ICAMA announced that it was tightening the manufacturing
standards for products based on paraquat by implementing the 1996 UN
Food and Agriculture Organization (FAO) specifications for the herbicide.
All these efforts to open up the Chinese pesticide market and bring its
regulations in line with international standards should act to encourage even
more pesticide companies to enter one of the only pesticide markets in the
world to still be expanding. This increased competition, together with the
withdrawal of older pesticides and the implementation of more stringent
environmental controls, should lead to consolidation within the Chinese
generic pesticide industry, as smaller producers are forced out of business or
integrated into larger chemical corporations.
This process of consolidation is also being actively driven by the Chinese
government, which is concerned that the domestic pesticide industry suffers
from too many companies, production overcapacity and outdated
technologies and products. As a result, the government fears that the
domestic industry could begin to lose out to more innovative Western
companies both at home and abroad. It has therefore launched a five-year
development plan (200610) to reduce the total number of pesticide
companies, create a few large national champions with assets of Yuan
5,00010,000 million and encourage a greater focus on developing novel
products.
This transformation of the pesticide industry forms part of a larger effort to
modernise the whole Chinese chemical sector. In May 2004, the Chinese
government formed the China National Chemical Corporation (ChemChina)
to drive this modernisation. In March 2005, ChemChina announced that over
the next five years it would build up a giant state-owned pesticide group
with annual sales of over Yuan 10,000 million (almost 10 times larger than
the annual sales of Red Sun, which is currently Chinas largest pesticide
company). As a first step, in J une 2005 it took control of Sanonda.
Then in October 2006 ChemChina took a 30% stake in the Chinese company
Shandong Dacheng Pesticides. But its most radical move came in November
2007, when, in conjunction with the US private equity firms Fox Paine
Management III and the Blackstone Group, it made a Aus$3,000 million
($2,760 million) bid for Nufarm. If successful, this would result in the first
Chinese ownership of a leading agrochemical multinational.
4.3.3 India
The generic pesticide market and industry in India has many similarities with
that in China. The market in both countries has grown dramatically over
recent years, although the Chinese market is currently much bigger than the
Indian one. Both countries have an extensive and well-developed generic
pesticide industry that supplies the domestic market and generates
substantial exports, but which suffers from substantial overcapacity.
In addition, both countries governments are actively implementing new
business and environmental regulations, partly as a result of their recent
accession to the WTO. As a result, the pesticide markets in both countries
are beginning to move away from older, toxic pesticides, such as
organophosphorus insecticides, towards newer and safer varieties, such as
pyrethroid and neonicotinoid insecticides.
The Indian pesticide market was worth around Rs 40,000 million ($880
million) in 2006, according to a study conducted by CARE Research, with
generic pesticide products accounting for the vast majority of the market
(around 70%). However, there is still plenty of scope for growth in the
Indian pesticide market: although India is the one of the worlds largest
agricultural producers, with over 180 million hectares of cultivated land, it is
not one of the top 10 largest pesticide markets. Indeed, the PMFAI has
estimated that, despite ever-present problems with erratic weather
conditions, the Indian market should achieve an annual growth rate of 10
15% between 2005 and 2010.
The Indian market is heavily skewed in terms of both products and crops.
Insecticides account for over 70% of the pesticide market, followed by
fungicides with 12% and herbicides with 11%. Cotton accounts for around
45% of total pesticide use, with insecticides accounting for 90% of the
pesticides used on cotton, followed by rice, which accounts for 22% of all
pesticide use.
Popular insecticides include monocrotophos, cypermethrin, chlorpyrifos,
endosulfan, quinalphos, acephate and phorate; popular fungicides include
copper oxychloride, metalaxyl and mancozeb; popular herbicides include
isoproturon and butachlor. All of these are well-established generic ais.
Recently, however, older ais have begun to be replaced by newer ones,
which now account for around 5560% of all the pesticides used in India.
The Indian generic pesticide industry, which consists of 80 larger
manufacturers and 500 formulators, meets much of the domestic demand.
The industrys annual sales amount to around Rs 60,000 million, of which
about half are generated by the Indian market. Indian manufacturers
accounted for the second largest proportion of the companies profiled in
Volume 1 of this report, after Chinese manufacturers, with 20 entries (see
Table 4.11).
Table 4.11: List of Indian manufacturers profiled in Volume 1
Company Company
Aimco Pesticides Hindustan
Atul India Pesticides
Bharat Group Indofil
Chemet Chemicals Meghmani Organics
Coromandel Fertilisers Nagarjuna
Dhanuka Pesticides PI Industries
Excel Crop Care Punjab Chemicals
Gharda Chemicals Rallis India
Heranba Sabero Organics
Hikal United Phosphorus

Four of the five largest Indian producers have annual sales similar to the
largest Chinese producers (see Table 4.12). The exception is United
Phosphorus, which has recently entered into a different league. Following a
string of business acquisitions over the past few years, it recorded sales of
$350 million for the year ending March 2006, making it the first ever Indian
company to be included in Agrows annual list of the top 20 global
agrochemical companies. The foreign agrochemical companies with the
largest shares of the Indian market are Syngenta, Bayer CropScience,
Monsanto, BASF and DuPont.
Table 4.12: Top five Indian pesticide producers
Company Annual sales, 200607 ($m)
United Phosphorus 350
Rallis India 133
Meghmani Organics 105
Excel Crop Care 93
Nagarjuna 80
Note: 1. Top five as detailed in Agrows Complete Guide to Generic Pesticides: Volume 1 The
companies.
As in China, the Indian generic pesticide industry suffers from substantial
production overcapacity. For the year ending March 2006, just over half of
the countrys production capacity was utilised, reflecting the pressures of
adverse weather and intense competition. Production fell by 13% on 2005 to
82,240 tonnes, whereas the annual production capacity is almost 150,000
tonnes. In line with pesticide demand, insecticides dominate production
(54,474 tonnes manufactured in 2006), with acephate, cypermethrin and
phorate the most popular, followed by fungicides (19,443 tonnes), with
maoncozeb the most popular, and herbicides (6,514 tonnes), with
isoproturon and glyphosate the most popular.
The regulation of pesticides, including their manufacture, sale and
distribution, in India is covered by the Insecticides Act. This was introduced
in 1968 and is implemented by the Ministry of Agricultures Central
Insecticides Board. The Ministry of Agriculture has made a number of
amendments to the Insecticides Act over the past few years, including
simplifying registration procedures and imposing tougher measures against
suppliers of counterfeit or adulterated pesticides. Like China, India has a
major problem with counterfeit pesticides, which account for 1015% of the
Indian market.
In addition, as part of its accession to the WTO, India introduced a new
patent law in 2005, which tightened rules on patents for manufacturing
processes and brought in product patents. This new law is unlikely to have
any immediate effect on Indian pesticide companies, because most only
produce post-patent ais. In any case, the law will not cover newer pesticide
ais that are already on the market, such as imidacloprid. Nevertheless, the
law could encourage an influx of new ais from foreign R&D-based
agrochemical companies.
The R&D-based companies are also calling for India to introduce a 510
year protection period for registration data, which would bring the country in
line with systems in other parts of the world. This period would run from the
date of the first Indian approval of an ai and would prevent other companies
from accessing the registration data, thereby allowing the first registrant to
recover the cost of generating the data.
Data requirements are much less onerous for generic product approvals in
India, and the R&D-based industry has long argued for more stringent data
requirements for generic registrations. However, the generic industry
maintains that the introduction of product patents in India already provides
the required protection.
The Ministry of Agriculture has also recently begun to review the
registrations of certain older, toxic pesticide ais, leading it to ban or place
restrictions on a number of them. In February 2006, it proposed restricting
the use of 31 pesticide ais, all of which were sold in India before the
Insecticides Act came into force, and to cancel the registrations for seven
ais, including the herbicide simazine.
At the same time, the DPPQS initiated a review of the toxicity, persistence,
safety in use and availability of alternatives for 37 ais, all of which had been
restricted in some other countries. These included: the insecticides
acephate, bifenthrin, carbosulfan, deltamethrin, dichlorvos fenthion,
monocrotophos, propargite, quinalphos and trichlorfon; the fungicides
chlorothalonil, mancozeb and thiophanate-methyl; and the herbicides
atrazine, butachlor, linuron, pendimethalin and trifluralin. The review will be
used to make recommendations for continued use, restricted use or phase-
out of the ais.
The first of these recommendations came in February 2007, when the
Ministry called on pesticide registrants to amend labels and provide certain
study data for 10 ais. These included: the insecticides dichlorvos,
monocrotophos and quinalphos; the fungicides carbendazim and mancozeb;
and the herbicides atrazine, butachlor, and pendimethalin (see individual ai
profiles in Volume 1 for details of the required amendments and study data).
Then, in August 2007, the Ministry banned all agricultural uses of the
insecticide fenthion, except locust control in desert areas and public health.
4.4 4.4 South America
The pesticide market in South America is currently worth around $6,500
million a year, but is growing rapidly and pesticide sales are expected to
reach $7,000 million by 2009. Brazil is by far the largest country market in
South America, accounting for around 60% of all pesticide sales, followed by
Argentina (15%), Mexico (7%) and Colombia (7%).
The major R&D-based agrochemical companies dominate the Latin American
market, with MAI and Nufarm the only generic manufacturers generating
substantial sales in the region. Although South American generic producers
remain fairly small, they are growing in importance. Seven companies were
profiled in Volume 1 of this report (see Table 4.13), compared to only three
in the last edition (although two of the seven are Mexican companies that
were included within North America in the last edition).
Table 4.13: List of South American manufacturers profiled in
Volume 1
Reposo Argentina Tekchem Mexico
Agripec Brazil Tecnomyl Paraguay
Fersol Brazil Inquiport Venezuela
Quimica Lucava Mexico

Recent changes to the way pesticides are regulated in many South American
countries are beginning to open the region up to generic producers. Brazil
introduced new regulations for registering generic pesticides in 2002 and,
after some initial confusion, has begun approving new generic pesticide ais
(see section 4.4.1). Meanwhile, Colombia introduced a new decree for
registering generic pesticides in 2003. Decree 501 gives generic companies
greater freedom to use data on registered ais to produce generic products
and should simplify registration procedures and shorten approval times.
This new decree was introduced as part of ongoing efforts to harmonise
pesticide registration requirements and procedures among Andean member
countries, which comprise Bolivia, Colombia, Ecuador, Peru and Venezuela.
The Mercosur countries (Argentina, Brazil, Uruguay and Paraguay) have
been looking at harmonising their pesticide registration systems for the past
10 years. Both of these efforts should eventually make it easier for generic
producers to register their products in South American countries, although a
number of hurdles still need to be overcome.
4.4.1 Brazil
Brazil has the second largest pesticide market in the world, worth $3,912
million in 2006 according to the Brazilian generic agrochemical industry
(AENDA), and there is still plenty of scope for further growth, especially for
generic pesticide producers. Herbicides currently account for the largest
share of the pesticide market (40%), followed by insecticides (30%) and
fungicides (25%).
Nevertheless, the Brazilian market has lost almost around 13% of its value
since 2004 (when it was worth $4,494 million), due to a combination of
falling prices, smaller soybean areas, lower incidences of Asian soybean rust
and increased uptake of GM herbicide-tolerant soybeans. However, the
situation does now look to be improving, with the Brazilian Institute of
Agribusiness predicting that pesticide sales will increase by 10% in 2007.
Brazil has around 63 million ha of cultivated land, although this represents
only 10% of the potential farmland that could be planted with arable crops.
Major crops grown in Brazil include cereals (64 million tonnes produced in
2004), soybeans (49 million tonnes), maize (42 million tonnes), root
vegetables and potatoes (28 million tonnes) and citrus fruit (21 million
tonnes). The most popular pesticides in Brazil are the herbicide glyphosate,
the insecticide methamidophos, and the fungicide pyraclostrobin.
Despite the size of the Brazilian pesticide market, only two Brazilian generic
pesticide companies, Agripec and Fersol, were profiled in the first report.
Indeed, generic pesticide companies do not currently enjoy a large share of
the Brazilian pesticide market, mainly because of the recent problems over
the registration of generic products in Brazil. Of the top 10 pesticide
companies in Brazil in 2006, which account for over 85% of the countrys
pesticide sales, seven are R&D-based agrochemical multinationals, with
Bayer CropScience and Syngenta generating the largest sales. However,
recent changes in Brazilian pesticide regulations are now starting to open
the market up to generic producers.
Pesticide registration in Brazil is governed by Law 7802/1989 and Decree
4074/2002. Under these rules, approval is required for the experimentation,
production, import, export, sale and use of pesticides. Registration is
handled by three key regulatory bodies: the Ministries of Agriculture, Health,
and the Environment.
Until 2002, the approval of generic pesticides required a dossier containing
partial toxicological, environmental, chemical and agronomic studies. Decree
4074 then came into force and introduced an equivalence system for
registering generic products, which quickly became a major source of
controversy in Brazil.
The equivalence system is based on the FAOs five-batch analysis criteria,
which focus on physico-chemical properties and acute toxicity. Under Decree
4074, pesticide producers were given a 90-day period to present their
products detailed composition, using the five-batch analysis. Problems arose
because Brazilian generic producers did not have five-batch test data for
their products and claimed that Brazilian laboratories were not capable of
carrying out the tests. In addition, the R&D-based agrochemical companies
were not prepared to present their five-batch analysis results until the
countrys intellectual property law was passed.
This law, 10.603, was eventually passed in December 2002 and extended
data protection periods from five to 10 years. New data submitted after the
original registration will be granted a protection period equal to the products
original period or for one year from the registration of new data, whichever
is longer. In all cases, data are only protected until they are available in
another country, with a minimum protection period of one year.
Law 10.603 also stipulated that: payment for data would be evaluated on a
case-by-case basis depending on the economic value of the information; and
if a company fails to commercialise a product within two years of its
registration, the government can release data at the request of a third party.
Even after Law 10.603 was passed, the five-batch analysis system caused
confusion as reference products and data protection periods for the analysis
test were not clear. This meant that no generic registrations were granted
for three years, producing a backlog of around 350 applications.
The Ministry of Agriculture finally approved the first generic ai under the
new regulations in September 2005, when it granted Atanor the right to
import, export and sell the herbicide glyphosate. Then it approved the first
formulated product in J une 2006, when Rotam was granted the right to
market the fungicide Rodazil (carbendazim).
Nevertheless, the system was still fairly slow and so in December 2006 the
Brazilian government passed a Decree to speed up the registration of
generic pesticide. This new Decree removed the need for certain
unnecessary tests and studies and specified that the registration process
should take a maximum of 150 days. By J une 2007, 17 pesticide ais,
including the herbicides glyphosate and paraquat and the fungicide
tebuconazole, and 20 formulated products had received generic
registrations.
Despite these efforts, the demand for generic pesticide products in Brazil is
still currently outstripping supply. In 2006, this situation led 20 agricultural
co-operatives comprising 15,000 Brazilian farmers to set up a national
consortium, the CCAB, with the aim of obtaining its own registrations for
generic pesticides. The CCAB is targeting Asia as a source of generic ais and
plans to import ais and manufacture its own products in Brazil. It is seeking
partnerships with companies that are not from among Brazils dominant
pesticide suppliers.
Chapter 5: Future Generic Pesticide Targets Generic Pesticides: Volume III Business Strategies
CHAPTER 5
FUTURE GENERI C PESTI CI DE TARGETS
As pesticides start losing their patent protection (or even well before in
those countries where patents have not been acknowledged or effectively
protected), they are targeted by generic producers. About 3040% of
commercialised pesticide ais are manufactured by generic producers after
they lose their patent protection. The proportion of herbicides targeted is
much less than that for fungicides and insecticides.
The remaining 6070% of pesticide ais are not of interest to generic
producers for a variety of reasons, including:
market size limitations;
manufacturing difficulties;
problems with access to key intermediates.
Of the herbicides, insecticides and fungicides that are targeted by generic
producers, about 4050% are made by three or more producers. There is
little difference across the three main market sectors in this respect. The
most popular generic ais in terms of numbers of manufacturers are
discussed in more detail in Chapter 3.
5.1.1 Future herbicide targets
Between 1995 and 2006, 71 new herbicide ais were reported or launched,
many of which now generate significant sales and will figure amongst the
main future targets for generic companies (see Table 4.1).
Generic companies tend to focus on herbicides that can be used in a wide
variety of crops and geographical regions, together with ais that are used on
big crop sectors such as cereals and rice. Those herbicides that are likely to
receive the most attention from generic producers over the next five years
are detailed below. These ais are taken from Agrows New Generics 2007.
Amidosulfuron (control of broadleaf weeds and cleavers in cereals).
Carfentrazone-ethyl (control of broadleaf weeds and grasses in cereals
and rice).
Cinidon-ethyl (control of broadleaf weeds in cereals).
Cyclosulfamuron (control of broadleaf weeds and sedges in cereals and
rice).
Cyhalofop-butyl (control of grasses in rice).
Flazasulfuron (broad-spectrum post-emergence herbicide).
Florasulam (cereal herbicide).
Flupyrsulfuron-methyl sodium (control of grasses in cereals).
Halosulfuron-methyl (control of broadleaf weeds and sedges in maize,
sugar cane and turf).
Imazapic (control of broadleaf weeds in pastures).
Imazosulfuron (control of broadleaf weeds and sedges in rice, barley
and wheat).
Mesotrione (pre- and post-emergence maize herbicide).
Metosulam (control of broadleaf weeds in cereals and maize).
Nicosulfuron (post-emergence maize herbicide).
Sulcotrione (controls broadleaf weeds and grasses in maize and sugar
cane).
Sulfosulfuron (control of broadleaf weeds and grasses in wheat).
Triflusulfuron-methyl (control of broadleaf weeds in sugar beet).
Table 5.1: Significant new herbicides reported and commercialised,
19952006
Active Ingredient Trade Name Year
1
Developing Company
Imazamox Bolero 1995 Cyanamid
4

Thiafluamid Axiom 1995 Bayer
Prosulfuron Exceed 1995 Ciba
4

Oxasulfuron Dynam 1995 Ciba
4

Azimsulfuron Gulliver 1995 DuPont
Sulfentrazone Boral 1995 FMC
Isoxaflutole Converge 1995 Rhone-Poulenc
2

Butroxydim Falcon 1995 Zeneca
5

Cloransulam-methyl FirstRate 1996 DowElanco
3

Prohexadione-calcium Viviful 1996 Kumiai Chemical/BASF
Pyrithiobac-sodium Staple 1996 Kumiai Chemical/DuPont
Cumyluron Gamyla 1996 Marubeni Corporation
Flurtamone Benchmark 1996 Rhone-Poulenc
2

Fluthiamid n/k 1997 Bayer
Fentrazamide Lecspro 1997 Bayer
Azafenidin Evolus 1997 DuPont
Flupyrsulfuron-methyl-sodium Balance 1997 DuPont
Carfentrazone-ethyl Aim 1997 FMC
Pentoxazone Wechser 1997 Kaken Pharmaceutical
Bispyribac-sodium Grass-short 1997 Kumiai Chemical
Pyribenzoxim Kiljabi Gold 1997 LG Chemical
6

Prosulfuron Peak 1997 Novartis
5

Cyclanilide Finish 1997 Rhone-Poulenc
2

Oxadiargyl Raft 1997 Rhone-Poulenc
2

Oxaziclomefone Homerun 1997 Rhone-Poulenc Yuka Agro
Ethoxysulfuron Sunrice 1998 AgrEvo
2

Cinidon-ethyl Bingo 1998 BASF
Clefoxidim Aura 1998 BASF
Diflufenzopyr-sodium Distinct 1998 BASF
Tepraloxydim Aramo 1998 BASF
Flufenacet Axiom 1998 Bayer
Cyhalofop-butyl Clincher 1998 Dow AgroSciences
Florasulam Primus 1998 Dow AgroSciences
Azafenidin Evolus 1998 DuPont
Pyraflufen-ethyl Ecopart 1998 Nihon Nohyaku
Oxadiargyl Topstar 1998 Rhone-Poulenc
2

Fluazolate n/k 1998 TwinAgro
Fenoxaprop-P-ethyl Puma 1999 AgrEvo
2

Iodosulfuron-methyl Husar 1999 AgrEvo
2

Amicarbazone n/k 1999 Bayer
Fluthiacet-methyl Action 1999 Kumiai Chemical/Novartis
1

Carvone Talent 1999 Luxan
Indanofan Kirifuda 1999 Mitsubishi Chemical
7

Flazasulfuron Katana 1999 Zeneca
5

Tralkoxydim Achieve 1999 Zeneca
5

Foramsulfuron Option 2000 Aventis CropScience
2

Flucarbazone-sodium Everest 2000 Bayer
Diclosulam Strongarm 2000 Dow AgroSciences
Clodinafop-propargyl Discover 2000 Novartis
5

Pethoxamid Successor 600 2000 Tokuyama/Stahler Agrochemie
Mesotrione Callisto 2000 Zeneca
5

Mesosulfuron-methyl Cossack 2001 Aventis CropScience
2

Picolinafen Sniper 2001 BASF
Propoxycarbazone-sodium Attribut 2001 Bayer
Ethametsulfuron-methyl Muster 2001 DuPont
Benzobicyclon Show-Ace 2001 SDS Biotech
Pyriftalid Apiro Ace 2001 Syngenta
Trifloxysulfuron-sodium Krismat 2001 Syngenta
Flumioxazin Valor 2001 Valent
Tritosulfuron Corto 2002 BASF
Dimethenamid-P Frontier S 2003 BASF
Metamifop n/k 2003 Dongbu Hannong Chemical
Penoxsulam Viper 2003 Dow AgroSciences
Flucetosulfuron n/k 2003 LG Life Sciences
Butafenacil Inspire 2003 Syngenta
Flufenpyr-ethyl n/k 2003 Valent
Beflubutamid Herbaflex 2003 Ube Industries/Stahler
Agrochemie
Oxadiazon Longshot 2004 Bayer CropScience
Aminopyralid Milestone 2004 Dow AgroSciences
Topramezone Clio 2005 BASF
Pinoxaden Axial 2005 Syngenta
Source: Agrow
Notes: 1. Year ai first reported, approved or launched; 2. Now part of Bayer CropScience; 3.
Now Dow AgroSciences; 4. Now part of BASF; 5. Now part of Syngenta; 6. Now LG Life
Sciences; 7. Now part of Nihon Nohyaku.
5.1.2 Future insecticide targets
Between 1995 and 2006, 37 new insecticide ais were reported or launched,
main future targets for generic companies.
The insecticides that are likely to receive the most attention from the generic
producers over the next five years are detailed below. The ais are taken
from Agrows New Generics 2007, but the list is not identical because some
of the insecticide ais identified as new generics have been profiled in Volume
1 of this report. This is because ais such as fipronil and pyridaben are
already being manufactured by more than one generic producer, even
though their patents remain in force in most major markets.
Acequinocyl (broad-spectrum acaricide for use on fruit and vegetables).
Clothianidin (insecticide for use on rice, vegetables, fruit, tea, turf and
ornamentals).
Fenpyroximate (miticide for use on a wide variety of fruit and
vegetables).
Lufenuron (control of caterpillars, mites and thrips on a wide variety of
crops, including vegetables, fruit, maize and potatoes).
Spinosad (control of caterpillars, flies and beetles on a wide variety of
crops, including vegetables, fruit, maize and potatoes).
Tebufenpyrad (broad-spectrum miticide for use on cotton, fruit and
vegetables).
Thiacloprid (insecticide for controlling sucking insects on fruit and
vegetables).
Table 5.2: Significant new insecticides reported and
commercialised, 19952006
Active Ingredient Trade Name Year
1
Developing Company
Tebupirimfos Aztec 1995 Bayer
Chlorethoxyfos Fortress 1995 DuPont
Acetamiprid Mospilan 1995 Nippon Soda
Tebufenozide Confirm 1995 Rohm and Haas
3

Pyrimidifen Miteclean 1995 Sankyo
Verbutin Censor 1996 Chinoin
Novaluron Rimon 1996 MAI
Methoxyfenozide Intrepid 1996 Rohm and Haas
3

Bifenazate Floramite 1996 Uniroyal
Chlorfenapyr Alert 1997 Cyanamid
3

Halofenozide Mach 2 1997 RohMid
Etoxazole Baroque 1998 Yashima Chemical
Acequinocyl Kanemite 1999 Agro-Kanesho
Emamectin-benzoate Proclaim 1999 Novartis
4

Pymetrozine Chess 1999 Novartis
4

Alanycarb Orion 1999 Otsuka Chemical
Fosthiazate Nemathorin 1999 Zeneca
4

Spirodiclofen Envidor 2000 Bayer
Thiacloprid Calypso 2000 Bayer
Bistrifluron n/k 2000 Dongbu Hannong Chemical
Funbacnew n/k 2000 Newstequi
Chromafenozide Matric 2000 Nippon Kayaku/Sankyo
Thiamethoxam Adage 2000 Novartis
4

Chlorfenapyr Pylon 2001 BASF
Fluacrypyrim Titaron 2001 Nippon Soda
Clothianidin Poncho 2001 Takeda Chemical
Spiromesifen Oberon 2002 Bayer
Gamma-cyhalothrin Archer Plus 2002 Cheminova/Dow AgroSciences
Tolfenpyrad Hachihachi 2002 Mistubishi Chemical
5
/Otsuka
Chemical
Tebufenpyrad Pyranica 2002 Mistubishi Chemical
5
/Platte
Chemica
Dinotefuran Starkle 2002 Mistui Chemical/Hokko Chemical
Milbemectin Milbeknock 2002 Sankyo Co
Pyridalyl Pleo 2002 Sumitomo Chemical
Ethiprole Kirapu 2004 Bayer CropScience
Flonicamid Aria 2004 ISK/FMC
Lufenuron Zyrox 2004 Syngenta
Flubendiamide n/k 2005 Bayer/Nihon Nohyaku
Source: Agrow
Notes: 1. Year ai first reported, approved or launched; 2. Now Dow AgroSciences; 3. Now part
of BASF; 4. Now part of Syngenta; 5. Now part of Nihon Nohyaku.
5.1.3 Future fungicide targets
Between 1995 and 2006, 54 new fungicide ais were reported or launched,
main future targets for generic companies (see Table 5.3).
The fungicides that are likely to receive the most attention from generic
producers over the next five years are detailed below. The ais are taken
from Agrows New Generics 2007, but the list is not identical because some
of the fungicide ais identified as new generics have been profiled in Volume
1 of this report. This is because ais such as kresoxim-methyl and
tebuconazole are already being manufactured by more than one generic
producer, even though their patents remain in force in most major markets.
Azoxystrobin (broad-spectrum fungicide for use on a wide range of
crops).
Bromuconazole (control of a wide range of foliar and stem diseases on
cereals).
Dimethomorph (control of oomycete fungi on vines, potatoes and
tomatoes).
Fenbuconazole (broad-spectrum fungicide for use on cereals, sugar
beet, fruit and vegetables).
Fluazinam (broad-spectrum fungicide and miticide for use on potatoes,
top fruit and vegetables).
Fluquinconazole (fungicidal seed treatment for small-grain cereals,
oilseed rape, fruit and vegetables).
Flutolanil (systemic fungicide for use on cereals, rice, soybeans, wheat,
sugar beet, fruit and vegetables).
Quinoxyfen (control of powdery mildews on cereals, soft fruit, vines,
vegetables and horticultural crops).
Tetraconazole (fungicide for use on cereals, sugar beet, vines, orchards
and vegetables).
Triticonazole (fungicidal seed treatment for small-grain cereals and
maize).
In the medium-term, triazole fungicides, such as fluquinconazole, and
strobilurin fungicides, such as azoxystrobin, will be a major focus for generic
pesticide producers.
Table 5.3: Significant new fungicides reported and commercialised,
19952006
Active Ingredient Trade
Name
Year
1
Developing Company
Fenbuconazole Enable 1995 Rohm and Haas
4

Kresoxim-methyl Candit 1996 BASF
Spiroxamine Impulse 1996 Bayer
Acibenzolar-S-methyl Bion 1996 Ciba
5

Quinoxyfen Fortress 1996 DowElanco
3

Famoxadone Charisma 1996 DuPont
Azoxystrobin Abound 1996 Zeneca
5

Carpropamid Arcado 1997 Bayer
Furametpyr Limber 1997 Sumitomo Chemical
Diflumetorim Pyricut 1997 Ube
Fenhexamid Elevate 1998 Bayer
Iprovalicarb Melody 1998 Bayer
Cymoxanil Curzate 1998 DuPont
Cyamidazosulfamid Docious 1998 ISK
Mepanipyrim Frupica 1998 Kumiai Chemical
Ethaboxam Guardian 1998 LG Chemical
6

Trifloxystrobin Flint 1998 Novartis
5

Fenamidone Fenomen 1998 Rhone-Poulenc
2

Triticonazole Premis B 1999 Rhone-Poulenc
2

Fluquinconazole J ockey 2000 Aventis
2

Propamocarb-hydrochloride Tattoo C 2000 Aventis
2

Pyraclostrobin Cabrio 2000 BASF
Metconazole Caramba 2000 Kureha/BASF
Simeconazole Patchikoron 2000 Sankyo Co
Diclocymet Delaus 2000 Sumitomo Chemical
Oxpoconazole-fumarate All-Shine 2000 Ube Industries/Otsuka Chemical
Picoxystrobin Acanto 2000 Zeneca
5

Fenamidone Reason 2001 Aventis CropScience
2

Fenoxanil Achieve 2001 BASF/Nihon Nohyaku
Fenhexamid Teldor 2001 Bayer
Zoxamide Zoxium 2001 Dow AgroSciences
Cyazofamid Ranman 2001 ISK
Silthiofam Latitude 2001 Monsanto
Fluazinam Omega 2001 Syngenta/ISK
Boscalid Filan 2002 BASF
Dimoxystrobin Swing Gold 2002 BASF
Metrafenone Flexity 2002 BASF
Fluoxastrobin Fandango 2002 Bayer
Prothioconazole Proline 2002 Bayer
Titriconazole Charter 2002 Bayer
Benalaxyl-M n/k 2002 Isagro
Benthiavalicarb Valbon 2002 Kumiai Chemical
Tiadinil V-Get 2003 Nihon Nohyaku
Cyflufenamid Pancho 2003 Nippon Soda
Orysastrobin n/k 2004 BASF
Fluopicolide Infinito 2004 Bayer CropScience
Pyrimethanil Scala 2004 Bayer CropScience
Proquinazid Talius 2004 DuPont
Laminarin Lodus 40 2004 Goemar
Ipconazole Vortex 2004 Kureha/Bayer/Crompton
Mandipropamid Revus 2005 Syngenta
Furfural Multiguard
Protect
2006 AgriGuard
Kiralaxyl Capri 2006 Isagro
Metconazole Work Up 2006 Kureha
Source: Agrow
Notes: 1. Year ai first reported, approved or launched; 2. Now part of Bayer CropScience; 3.
Now Dow AgroSciences; 4. Now part of BASF; 5. Now part of Syngenta; 6. Now LG Life
Sciences.
Chapter 6: Role of Industry Associations Generic Pesticides: Volume III Business Strategies
CHAPTER 6
ROLE OF I NDUSTRY ASSOCI ATI ONS
The R&D-based agrochemical industry has a well-established network of
industry associations at the country, regional and global level. These
associations are very good at lobbying on behalf of the R&D-based industry
and are usually consulted by regulatory authorities on proposals for any new
pesticide regulations.
Industry associations for generic pesticide companies are less common, but
also tend to be involved in consultations over new pesticide regulations,
especially concerning generic registrations and data protection and
compensation. The larger generic companies, such as Nufarm and
Cheminova, often see their interests as more allied with the R&D-based
companies, and therefore tend to be members of both R&D-based and
generic industry associations.
The activities of the majority of the R&D-based associations are co-ordinated
on a global basis by CropLife International (www.croplife.org). This
federation was formed in J une 2001 to replace the former Global Crop
Protection Federation (GCPF). The change in the international associations
name reflects the fact that many leading pesticide companies are now also
involved in developing seeds and genetically modified crops.
CropLife International co-ordinates the activities of six regional trade
associations:
European Crop Protection Association;
CropLife America;
CropLife Latin America;
CropLife Africa Middle East;
CropLife Asia;
J apan Crop Protection Association.
CropLife International also represents more than 70 national trade
associations, whose members comprise both R&D-based companies and
generic companies. In view of these mixed interests, there are inevitably
conflicts over issues relating to generic pesticides.
There are also an increasing number of industry associations that have
either specifically been set up for generic pesticide companies or are based
in countries, such as China, where the industry solely comprises generic
pesticide producers. The main associations are:
European Crop Care Association (ECCA);
US Chemical Producers and Distributors Association (CPDA);
Pesticide Manufacturers and Formulators Association of India (PMFAI);
China Crop Protection Industry Association (CCPIA);
Associao Brasileira dos Defensivos Genricos (AENDA; the Brazilian
generic agrochemical industry association).
They all operate fairly independently and there is little co-ordination
between their respective activities. Over some issues, such as data
protection, these generic pesticide associations can be at loggerheads with
the R&D-based associations, while on other issues, such as pesticide
harmonisation, they can be team up as part of a united industry front.
6.1.1 ECCA
European Crop Care Association
ECCA Secretary-General
Poenaardlaan 7
B-3090 Overijse
Belgium
Tel: +32 2 687 9767
E-mail: ecca.secretary@skynet.be
www.ecca-org.eu
President: Pedro Brito Correia
Secretary-General: David van Hoogstraten
ECCA was established in 1993 by eight founding companies. The association
now has 16 members, comprising generic pesticide producers, formulators,
marketing companies and traders based in Western Europe (see Table 6.1).
In addition to European companies, the European operations of three major
Indian generic producers are also members of ECCA.
Table 6.1: ECCA member companies
1

AEFISA Spain Gharda Chemicals
2
UK
Agripraza Italy Helm Germany
Agrochimica Italy Herbex
2
Portugal
Barclay Chemicals
2
Ireland Industrias Afrasa Spain
Brabant Chemie Holland LAPA SARL France
Chimac-Agriphar Belgium Limaru Belgium
Clayton Plant Protection Ireland Protex Belgium
Ets Bourgeois France UPL
2
UK
Excel Crop Care
2
Belgium
Source: Agrow Reports
Notes: 1. ECCA member companies in 2001, because the association does not advertise its
current membership; 2. Company profiled in first report.
ECCAs main role is to deal with the European Commission on behalf of the
European generic pesticide industry, specifically with regard to EU pesticide
regulations. As such, one of ECCAs main preoccupations over the past
decade has been the EUs pesticide review programme, which was instigated
as part of the EU pesticide registration directive (91/414/EEC).
For example, ECCA was concerned that there is no obligation for pesticide
producers to combine to form task forces in order to share the costs of re-
registration. This is unlike the situation in the US, where the costs of studies
required for the EPA review procedure are divided out equally amongst
interested parties.
More recently, ECCA has become concerned about the related area of data
protection. The current provisions for the protection of agrochemical
regulatory data in the EU are notoriously complex, particularly regarding the
EU review of existing ais. Companies applying to register generic versions of
ais that have been listed in Annex 1 of the EU pesticide registration directive
must prove that the generic ai is equivalent to the original ai. They must
also prove that they have access to a complete registration data package.
Companies can demonstrate equivalence by submitting a five-batch analysis,
which considers physico-chemical properties and toxicity. But proving that
they have access to a complete data package, which consists of both
unprotected and protected studies, is more problematic. This is because
it can be difficult for generic companies to establish which of the studies
used by the first applicants are protected and which are unprotected.
Furthermore, the original applicants are currently under no obligation to
share this protected data with generic applicants. This means that
companies wanting to register a generic pesticide product often have to
produce a complete data package from scratch, with the associated cost.
ECCA wants a system similar to the one that exists in the US, where data
compensation payments are made to the original applicant when a company
registers a pesticide product based on an off-patent ai. For the most part,
ECCA members are small companies that cannot afford the huge costs
involved with generating full data packages. ECCA asserts that its members
are prepared to pay reasonable costs for continued market access and
hopes that an acceptable settlement can be made through negotiations with
the ECPA.
ECCA has made progress on some of these issues. For instance: it has
gained acceptance that listing of ais is done by reference to physico-
chemical properties alone; that rapporteur member states should not
exclude notifiers that are not data holders from the review process; and that
a period of time after Annex 1 listing should be set aside to allow generic
producers an opportunity to comply with data requirements to maintain
national registrations for their pesticide products.
In addition, in May 2005, the European Commission issued a guidance
document requiring member states to draw up a list of studies that were
used to evaluate an ai and indicate which of these studies are claimed as
protected by the original applicant and which are older unprotected studies.
This guidance document formed part of the Commissions proposals for
amending Directive 91/414. These proposals also included a compulsory
data sharing and compensation system for registering generic products, in
which companies would have to agree on compensation for the use of
proprietary registration data generated by the original applicant. If
agreement could not be reached, an independent arbitrator would set the
compensation level. In later proposals, the Commission also suggested
removing any protection for new data generated for the review of existing
ais and products (see Chapter 3).
The Commission produced the final version of its proposals in J uly 2006.
This version included the requirement for member states to provide details
of protected data and the removal of protection for ai review data. But the
Commission pulled back from introducing a compulsory data sharing and
compensation system, with the proposed regulatory amendment stating
instead that companies should take all reasonable steps to reach
agreement on the sharing of any test and study reports .
At the end of October 2007, the proposed amendment was debated by the
European Parliament, which approved the data protection proposals. The
amendment will now progress to the EU Council of Ministers for
consideration and should come into force in 2008 after the current review
programme for existing ais has been completed.
ECPA and ECCA have been at loggerheads for some years over issues such
as data protection, the European pesticide directive and access to task force
membership. However, there are also areas of common interest between the
parties, such as the need to present a united industry front in the face of
attacks from environmental lobby groups and the potential imposition of
economic instruments such as pesticide taxes.
6.1.2 CPDA
Chemical Producers & Distributors Association
1730 Rhode Island Avenue, Suite 812
Washington, DC 20036
USA
Tel: +1 202 386 7404
Fax: +1 202 386 7409
E-mail: sferenc@cpda.com
www.cpda.com
President: Susan Ferenc
Director, Regulatory Affairs: Michael White
The CPDA was established in 1975 and now has 73 members, comprising
producers and distributors of agricultural pesticides, lawn and garden
products, adjuvants and inerts. The membership includes US companies and
the US operations of foreign generic producers, as well as some R&D-based
agrochemical companies. Seven of the companies profiled in Volume 1 of
this report are members of the CPDA: Albaugh, Cerexagri, Cheminova, MAI,
Nufarm, Sinon, Sipcam-Oxon and United Phosphorus.
The CPDA has two main objectives: to eliminate barriers to market entry for
generic pesticide producers; and to represent the interests of generic
pesticide companies in federal legislative and regulatory affairs. To achieve
these objectives, the CPDA has set itself four main goals.
To promote reasonable, scientifically-based federal legislative and
regulatory actions that balance risk and benefits and enhance the quality
of life.
To promote education and training that contribute to product
stewardship and industry compliance.
To establish good management practices and appropriate standards for
the industry to protect the environment.
To promote the interests of small- to medium-size pesticide producers,
formulators and distributors providing affordable generic products for
food and non-food uses.
The CPDA is engaged in a number of efforts relating to US pesticide
regulations. In 2006-07, these included supporting the early re-authorisation
of the Pesticide Registration Improvement Act, which established a system
of pesticide registration fees and specific timescales for pesticide product
approvals, and dissuading the EPA from adopting a proposal that would
have significantly increased review times for me-too product submissions.
6.1.3 PMFAI
Pesticide Manufacturers and Formulators Association of India
B-4, Anand Co-operative Hsg. Society
Sitladevi Temple Road, Mahim
Mumbai 400 016
India
Tel +91 22 437 5279
Fax: +91 22 437 6856
E-mail: info@pmfai.org
www.pmfai.org
President: Pradeep Dave
Vice-president: Deepak Shah
The PMFAI was established in 1967 as the Pesticides Formulators
Association of India, before changing its name to its current version in 1997.
It currently has around 150 members, comprising manufacturers of technical
ais and pesticide products, as well as formulators. The membership includes
Indian companies and the Indian operations of foreign pesticide companies.
Most of the Indian companies profiled in Volume 1 of this report are
members of the PMFAI, as are a number of Indian subsidiaries of overseas
companies (see Table 6.2).
Table 6.2: List of companies profiled in Volume 1 that are members
of the PMFAI
Aimco Pesticides Hikal
Atul Hindustan Insecticides
Bharat Group Indofil
Cheminova India Meghmani Organics
Coromandel Fertilisers Punjab Chemicals
Dhanuka Pesticides Rallis India
Excel Crop Care Rotam India
Gharda Chemicals Sabero Organics
Heranba United Phosphorus
Source: PMFAI
The main aim of the PMFAI is to promote the environmentally-sound use of
pesticide products in India and to foster innovation. To achieve this aim, it
has set itself a number of objectives, including: to protect and promote the
interests of generic pesticide manufacturers and formulators; to promote
research into novel pesticide formulations and methods of application; and
to promote co-operation and exchange of information between its members.
The PMFAI conducts training courses, organises conferences and represents
the generic pesticide industry in negotiations with the Indian Ministry of
Agriculture. Recently, it contributed to discussions regarding the amendment
of Indias Insecticides Act, calling for greater uniformity in the way pesticides
are regulated in different Indian states and pressing for changes to the rules
governing imports of ais. It has also argued that the current excise duty on
pesticides should be halved to 8% and lobbied against the imposition of a 5
10 year period of data protection, which has been requested by the R&D-
based agrochemical industry.
6.1.4 CCPIA
China Crop Protection Industry Association
Building 16, District Four
Anhuili
Beijing 100723
China
Tel: +86 10 8488 5145
Fax: +86 10 8488 5002
E-mail: ccpia@126.com
Founded in April 1982, the CCPIA was one of the first chemical industry
associations in China. Since its formation, CCPIA has experienced rapid
growth, with its membership increasing almost ten-fold to 445. Most of its
members are pesticide companies, research institutes and provincial
pesticide associations involved in the research, design and production of
pesticide-related products. These include technical ais, formulated pesticide
products, intermediates, packaging and pesticide application equipment. In
total, CCPIA members account for around 85% of Chinas total pesticide
production.
The CCPIAs main role is to provide a link between the Chinese agrochemical
industry and the Chinese government, in order to promote the sustainable
and healthy development of the pesticide industry. Its main responsibilities
and functions are detailed below.
Assisting the government in the management of pesticides.
Providing assistance with the governing laws and regulations, and
coordinating the development of pesticide manufacturers.
Promoting the protection of intellectual property and defending the
legal interests of its members.
Advising on exports, joint ventures and collaborations.
Providing training courses on skills, techniques, management,
relevant laws and regulations.
Publishing journals such as China Agrochemicals and the China Crop
Protection Industry Yearbook.
Organising international technical exchanges, symposiums and
exhibitions. These include AgrochemEx, which is the largest annual Chinese
agrochemical exhibition, showcasing the latest agrochemical technologies
and providing networking opportunities.
6.1.5 AENDA
Associao Brasileira dos Defensivos Genricos
Av. Dr. Vieira de Carvalho, 172 Conj. 306
Cep: 01210-010 So Paulo/SP
Brazil
Tel: +55 11 3354 0053
Fax: +55 11 3331 0285
E-mail: aenda@aenda.org.br
www.aenda.org.br
President (200709): J oao Pedro Engels
Executive Director: Tulio Oliveira
Established in 1986, AENDA represents generic pesticide companies in Brazil,
which is the worlds second largest pesticide market, comprising both
Brazilian companies and Brazilian subsidiaries of overseas generic producers.
It currently has 43 member companies, including four companies profiled in
Volume 1: Fersol, Pilarquim, Rotam and United Phosphorus.
AENDA performs a variety of functions, including lobbying the Brazilian
government on behalf of the generic pesticide industry, organising
conferences, exhibitions and training courses, and producing a members
newsletter entitled AENDA Opinion.
Over the past few years, AENDA has been heavily involved in improving the
process for registering generic pesticide products in Brazil. Until 2002, the
approval of generic pesticides required a dossier containing partial
toxicological, environmental, chemical and agronomic studies. A new Decree
(4074) then came into force and introduced an equivalence system for
registering generic products, which quickly became a major source of
controversy in Brazil.
The equivalence system is based on the FAOs five-batch analysis criteria,
which focus on physico-chemical properties and acute toxicity. But
companies claimed that Brazilian laboratories were not capable of carrying
out these tests and there was also a great deal of confusion over exactly
what data were required for generic products. This meant that no generic
registrations were granted for three years, producing a backlog of around
350 applications.
The Brazilian Ministry of Agriculture finally approved the first generic ai
under the new regulations in September 2005, when it granted Atanor the
right to import, export and sell the herbicide glyphosate. Then it approved
the first formulated product in J une 2006, when Rotam was granted the
right to market the fungicide Rodazil (carbendazim).
Nevertheless, the system was still fairly slow and so in December 2006,
following lobbying from AENDA, the Brazilian government passed a Decree
to speed up the registration of generic pesticides. This new Decree removed
the need for certain unnecessary tests and studies and specified that the
registration process should take a maximum of 150 days. By J une 2007, 17
pesticide ais, including the herbicides glyphosate and paraquat and the
fungicide tebuconazole, and 20 formulated products had received generic
registrations.
AENDA has also been actively pushing for more competition in the Brazilian
market, arguing that high pesticide registration costs effectively prevent
small and medium-sized companies from launching new products. However,
this campaign may have ended up causing problems for AENDA.
In September 2005, four companies Agripec, Agricur, Cheminova and
Milenia cancelled their memberships, with Nufarm electing to leave in
J anuary 2006. AENDA claims this was due to its efforts to increase
competition in the industry, because Agripec, Cheminova, Milenia and
Nufarm already generate substantial sales in Brazil. However, Milenia stated
that it left AENDA because it preferred being a member of the Brazilian fine
chemicals association, Abifina.
The withdrawal of these five companies threw AENDA into a financial crisis,
forcing it to cut expenses and some jobs. However, no other companies
have since left and the association is once again in a stable condition.
Quality reports from Agrow

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Agrow's Top 20: 2006 edition
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New Developments in Crop Protection Product Formulation: 2005 edition
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Agrow's Top 20: 2005 edition
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World Crop Protection Markets
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Biopesticide, Biocontrol and Semiochemical Markets
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The Future of the European Crop Protection Market
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New Developments in Fungicides: 2004
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US Crop Protection Markets
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Agrows Top 20: 2004 edition
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The Distribution of Non-Crop Pesticides in Europe
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Agrow's Top 30 CROs
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Agrow's Ag-Biotech Top 20: 2003 Edition
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GM Crops
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Adjuvants and Additives in Crop Protection
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