CCM: Global pesticide giants perform badly in sales: Part 1 of 3, Analysis on Syngenta

Publish time: 12th December, 2016      Source: CCM
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   Global pesticide market is still in downturn and the global pesticide giants also performed badly in their sales. The five major pesticide giants in the globe, Syngenta AG (Syngenta), Bayer CropScience AG (Bayer CropScience), BASF SE (BASF), Dow AgroSciences LLC (Dow AgroSciences) and E. I. du Pont de Nemours and Company, Inc. (DuPont), all can't still pick themselves up from the bottom regarding to no matter the third quarter sales performance or that of the first three quarters.


  Source: Baidu


  However, these five pesticide giants still shone for their star products in the pesticide market in the world in 2016.

   CCM is here to share the analysis on the performance of these five giants.


  Syngenta: Pesticides sales value goes down 7.3% YoY in first three quarters


  On pesticide sales performance

   In Q3 2016, pesticides sales value went down 6.2% YoY in Syngenta, with the sales value of USD2.036 billion. If calculated with the 7.7% decline in H1 2016, the pesticides sales value decreased 7.3% YoY in Q1-Q3, with the sales value of USD7.28 billion.


  In Q3 2016, Syngenta total sales value of pesticide, seed and trait business was USD2.384 billion, down 3.9% YoY. As for that in Q1-Q3 2016, the total sales value was USD9.142 billion, down 6.6% YoY.


  The sales performance of herbicides was weaker than that of fungicides. In Q3 2016, the sales value of herbicides took up 32.5% of the total pesticide sales value, with the sales value of USD662 million, up 2.3% YoY. As for Q1-Q3 in 2016, the sales value of herbicides was USD2.903 billion, down 6.9% YoY.


  The increasing sales value of selective herbicides was mainly driven by the North America market. The sales value of quaternary mixed herbicide Acuron (bicyclopyrone + mesotrione + atrazine + S-metolachlor) almost doubled in the US market, with the sales value breaking through USD200 million.


  As for the non-selective herbicides, the sales value went down due to the fact that Syngenta decreased the sales of glyphosate single formulation in North America market on purpose.


  When it comes to fungicide, in Q3, its sales value took up 32.3% of the total pesticides sales value in Syngenta, with the sales value of USD627 million, down 12.4% YoY, which was caused by changes of selling clauses in Brazil and the dry weather.


  However, the demand for fungicide was strong in Association of Southeast Asian Nations (ASEAN), especially the increasing demand for its products Amistar (azoxystrobin as active ingredient) and Score (difenoconazole as active ingredient), which helped narrow down the decline in fungicide sales performance. In the US, Trivapro (benzovindiflupyr as active ingredient) entered the market successfully.


  As for insecticide, the sales value was USD405 million, down 15.8% YoY in Q3 2016. The sales amount went down in Brazil but increased in South Asia market.


  The sales value of seed treatment formulation was USD266 million, up 2.3% YoY in Q3 2016, which was driven by the technology promotion in China and South-east Europe.




  On sales markets


  In Q3 2016, Syngenta's pesticide sales value increased 5.1% in Europe, Africa and Middle East, with the sales value of USD395 million, which was attributed to the huge increase of fungicide sales and successful promotion of seed treatment formulations.


  However, the sales value of pesticides inQ1-Q3 2016 went down 4.6% YoY in the above areas, with the sales value of USD2.421 billion; and it increased 29% YoY in the Commonwealth of the Independent States (CIS) but decreased 6% YoY in west Europe.


  In Q3 2016, the sales value of pesticides was USD404 million in North America, up 11.3% YoY, which was a reflection of continuously successful development.


  The sales value of pesticides was USD881 million in Latin America, down 22.3% YoY. In Brazil, the sales amount was kept affecting by the high inventory of fungicide. With fewer occurrences of pests and enlarging areas of genetically modified soybean, the demand for fungicide decreased in Brazil.


  The sales value of pesticides was USD356 million in Asia Pacific, up 22.3% YoY in Q3 2016, thanks to the end of El Nino phenomenon and the good effect from monsoon climate. Asia Pacific has strong demand for pesticide, especially the demand for fungicide from ASEAN and that for insecticide from South Asia. However, the sales value of pesticides in Asia Pacific was USD1.127 billion in Q1-Q3 2016, down 3.9% YoY.




  On mergers and acquisition


  According to Syngenta, the acquisition by China National Chemical Corporation (ChemChina) is in good process and already gets the approval from both the Committee on Foreign Investment in the United States (CFIUS) and 11 anti-monopoly institutions. Erik Fyrwald, CEO of Syngenta stated that, Syngenta was acquired to supplement more documents to Europe Union and management departments in other areas. It was predicted that the approval of the acquisition would be completed in Q1 2017.


  On prospect


  Mr. Erik Fyrwald said: "In Q4 2016, I hope that the Asia Pacific market would recover and Latin America market would get improved.' Syngenta hopes that it wouldn't get further affected by the changes of selling terms in Brazil and hopes to benefit from the stable currency in Brazil in Q4 2016. Also, Syngenta is expecting to make profit from the new fungicide product – Pydiflumetofen (pyridine as active ingredient) which entered Argentina market in Nov. 2016.


  Syngenta believes that the sales value may fall a little bit in 2016 but the EBITDA would remain the same as that in last year.


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  Tags: Pesticides, Syngenta