crop protection market in iran
TRANSCRIPT
Crop Protection Market in Iran
July 2011
Disclaimer
The author, Amir H. Azadehnia, does hereby certify that, to the best of his
knowledge, the views and opinions in this research report reflect his personal
views about the companies named. He has not nor will not receive direct or
indirect compensation in return for expressing specific viewpoints in this report.
Copyright 2011, Amir H. Azadehnia. All rights reserved.
This presentation is based on information which the author believes is reliable,
but the author does not represent or warrant its accuracy. The opinions and
estimates expressed here represent the views of the author as of the date of
this report. These opinions and estimates may be subject to change without
notice. The author will not be responsible for any consequences associated
with reliance on any statement or opinion contained here.
Table of Contents
• Agriculture Sector Dashboard
• Agricultural Maps
• Agribusiness Macro Environment
• Agribusiness Micro Environment (Porter’s Diamond)
• Agribusiness Market Structure
• 2011 CP Market Size and Trends
• CP Market Size: 2010 vs. 2011
• CP Market Outlook
• CP Market Value Break Down in 2010
• Cropping Patterns and Estimated Provincial CP Market Values
• CP Competition Monitor
• Appendix A: Original Companies in Iran
Abbreviations
• Agri: Agriculture/Agricultural
• app.: approximately
• ASSC: Agricultural Support Services Company (State Owned)
• ave.: averaged
• CP: Crop Protection
• DFC: Diversified Field Crops (corn, oilseed rape, sugarbeet etc.)
• est.: estimated
• Gov’t: Government
• ha: hectare
• hp: horsepower (power measurement unit)
• IRR: Iranian Rial
• MoA: Ministry of Agriculture
• MoC: Ministry of Commerce
• PPO: Plant Protection Organization
• SC: Seed Care
• USD: US Dollar
• vs.: versus
Agriculture Sector Dashboard
Macro
GDP Growth Rate
Expected 0% in 2011
(IMF, April 2011)
1% in 2010 (IMF, April
2011)
Population
74,000,000
Unemployment
16% (2010 est.)
Inflation (2011)
Est. at 21% - 22%
(EIU, March 2011 and
IMF, April 2011)
Currency
7 July 11 ex. rates:
Official - 1 USD =
10617 IRR
Market - 1 USD=11650
IRR
Country Risk Rating
B (EIU, March 2011)
Weather Warmer with less rainfalls. In Jan – June 2011, central Iran received the lowest rainfalls in the records. Country ave rainfall has been
75% less than normal so far.
Farming
Economy
Seeds
Not a major component of the input cost, except
for vegetables
CP Spending
CP Market Size 2011: USD 110 million
App. farm CP expenditure per ha: USD 10
Fertilizer and Utilities
Reduced fertlizer subsidies in
cereals
Higher energy costs
Higher water costs
Labor
The highest input cost
Farm Produce
Prices
Cheap imports
Gov‘t controlled
Crops
Cereals
2010/11 season:
estimated drop of
harvested area to app.
3 million ha because of
drought
Resistant weeds
reported in app. 1
million ha
Vegetables
Area remains stable,
estimated at 820,000
ha + 180,000 ha for
potatoe
Tuta cases reported in
most places
Pistachio
Depleted water
resources remain an
issue in Kerman area
Weaker performance in
export markets
Apple
Normal at
160,000 ha
Citrus
Stable at
220,000 ha
Sugarbeet
/Sugarcane
Sugarbeet
reached100,000
ha driven by
higher sugar
price and import
tariffs
Regulatory/
Politics
Politics
Remains uncertain (UN/US/EU trade limitations, erratic economic/agri
policies, business and consumer low confidence, poor country credit risk)
Regulatory
Better awareness about consumer safety
Increased registration charges per target per crop
to 11,000 USD
Farmers‘
outlook
- Total arable land 12,000,000 ha
- Agri sector shrank by 10% in 2009
- Serious concerns over water availability/access and emergence of mega-farms
- Increased awareness about CP and high tech seeds
- Farmers’ cash flow tighter because of increased inflation
- Doubling of cereal farm variable costs because of removal of utilities subsidies
Agricultural Maps
Administration Ave Precipitation mm/yr
31 Provinces
Agribusiness Macro Environment 1
• Emphasis on, but partial support for,
self-sufficiency in food production
• Policies moving away from input
subsidies & focusing on farming
infrastructure development
• Farm product exports are encouraged
but not supported in practice
• Cheap agri-product imports to slow-
down inflation
• Trade restrictions
• Long CP and seed registration times
• Weak intellectual property & trademark
rights protection
• Most farm input subsides are eliminated: a
fully liberalised CP market since 2008
• Negative to small agri sector growth rate (-
10% in 2009)
• Gov’t imposed price caps for strategic farm
products, at the same time, some farm
products are now traded in commodities
market
• Slow economic growth rate and high inflation
• Country average farm expenditure: app. 10
USD/ha
• Under-developed infrastructure, mainly in
banking, distribution and retail sectors
Political / Legal Economical
Agribusiness Macro Environment 2
• Investment on improving water resources
and farm irrigation systems
• Greenhouse farming is encouraged
• Low levels of mechanisation and hp per
ha
• Hybrid seeds
• Biological plant protection techniques are
promoted
• Arable land 12 m ha - 5.3 million farm
ownerships
• Number of people working in agriculture: 10
million
• Agriculture contribution to GDP: 10%
• Semi arid/arid climate
• Water shortage
• Low farm yield – low product quality
• High rate of farmer illiteracy (70%)
• Average farmer’s age: 46 years
Technological Social / Environmental
Agribusiness Micro Environment (Porter’s Diamond)
Strategy &
Rivalry
Demand Factor
Conditions
Related
Industries
& Service
Government
• Intensification
• Demand for better farm
product yield and quality
• Increased use of high tech CP & seeds
• MRLs important for exports
• Under developed agri produce
processing and food chain
• Farm clinics & supervisors
• Universities & research institutes
• Farmers’ union and coops
• Retailers union
• Private CP and seeds market
• Companies (original and generic)
expanding their activities
• Cheap Chinese and Indian generics
• Local generic companies lobby
to limit original producer’s market reach
• Willingness to improve farming
productivity & quality
• Small farms result in weak
farm economy
• Emergence of resistant pests
& weeds
• Water shortage
• National Policy & Planning: Ministry
of Agriculture
• Education: Local Agri Offices
• Product Registration and CP Regulatory:
Plant Protection Organisation (PPO)
• Retailer Tech Supervision: PPO
• Commercial distribution and retail
supervision: Ministry of Commerce
Gov’t remained
subsidised stock will
affect market adversely
by 2011
Agribusiness Market Structure
Imports (~ 75 companies)
Local Formulators (~ 25 plants)
Local Producers ASSC/
Coops
Integrated
Distributor/Retailer
Retailers
Farm
ers
Tech/Premix
Material
CP: Import Permit
by MoC and PPO
Fertilizer: Import
Permit by Moc
Macro Fertilizers
and Sulfur
Seed Treatment
Companies
Cereal/Corn …
Seeds
Mostly Generic CP
Some Underlicense CP
Micro Fertilizers
Finished Products
CP: Import Permit by MoC and PPO
Seeds: Import Permit by MoC, MoA, PPO
and Seed Certification Institute
Micro Fertilizer: Import Permit by Moc
Ma
cro
Fe
rtil
ize
rs
> 3000 Outlets
50
70
90
110
130
150
170
190 2
00
6
20
07
20
08
20
09
20
10
20
11
20
15
20
19
USD million
Historic Market Data Forecast
2011 CP Market Size and Trends
CP Market Size: 2010 vs. 2011
137
110
0
20
40
60
80
100
120
140 M
ark
et S
ize
-
20
10
Dro
ugh
t
Wea
ker
Fa
rm
Eco
no
my
Lo
we
r G
en
eric
Price
s
Int'l
Fu
nd
T
ran
sfe
r L
imita
tio
ns
Qu
alit
y C
P
Hig
he
r F
oo
d
Price
s
Ma
rke
t S
ize
-
20
11
Ma
rke
t S
ize
, m
illio
n
US
D
CP Market Outlook
● 2011 business environment prospects: 0%
economic growth – high inflation - stricter
international trade limitations – IRR
depreciation - water shortage
● Because of structural economic changes and
ad-hoc political and economical approach,
business confidence and forecasting accuracy
are lower
● Forecasted slower CP market development in
2011-2015 with mid-term market outlook highly
uncertain and dependent on future verifications
of political, economic and agri policies
● Spread of tolerant pest varieties
● Less water resources available
● Less arable land due to high desertification rate, but
an increased area of irrigated and intensive farming
plus an increased area of orchards and
greenhouses.
● Partial shift in farming patterns from field crops to
vegetables
● Advanced farm management practices and better
yields
● Cost of production per ha increasing. So are the
local food prices
● A large local market for quality agri products
(population: ~100 million)
● Iran, a food exporter to neighbouring countries
● GDP: under 10,000 USD per capita
● Agri policies focused on food security, value chain
and water management
2011 Long-term
CP Market Value Break Down in 2010
49%
30%
12%
8% 1%
Est. CP Market Value Break Down
Herbicides
Insecticides
Fungicides
Seed Care
Other
34%
35%
11%
20%
Est. CP Market Value Break Down
Cereals
Fruits & Nuts
Vegetables
Other
By Product Line By Crop
Cereals, Veg.,
Corn, Sugarcane
CP: 13 mio USD
Cereals, Veg.,
Corn, Fruits &
Nuts
CP: 16 mio USD
Cereals, Veg.,
DFC, Fruits &
Nuts
CP: 9 mio USD
Veg., Pistachio
CP: 12 mio USD
Veg., Fruits &
Nuts
CP: 2 mio USD
Cereals, Veg.
CP: 6 mio USD
Rice, Fruits &
Nuts
CP: 13 mio USD
Cereals, Veg.,
Fruits & Nuts
CP: 4 mio USD
Cereals, Veg.,
Fruits & Nuts
CP: 10 mio USD
Cereals, Veg.,
DFC, Fruits &
Nuts
CP: 8 mio USD
Cereals, DFC
CP: 6 mio USD
Cropping Patterns and Estimated Provincial CP Market Values
CP Competition Monitor
● Absence of American original producers
● Syngenta is present through a representative
office responsible for technical support.
Syngenta products are imported and distributed
by two companies: Hezare and Raha Andish
Kavan
● Bayer CropScience is directly present in the
market and developing their portfolio and
market reach. Bayer has establish own route to
the market led by blockbuster wheat herbicide,
Atlantis OD
● Other original companies with local
representative offices: BASF, Arysta
LifeScience, Sumitomo Chemicals...
● Chinese and Indian companies mostly supply technical
material to local formulators
● There are 25 (out of 45) local formulators active in the
market with a combined MS of around 80%. The largest
one by volume is Gyah and by value is Golsam Gorgan
Chemicals
● Gyah, Golsam Gorgan, Aria Shimi, Partonar and Ghazal
Shimi are supplying large volumes of cheap generic
products to many retailers
● Most local formulators offer a wide range of products in a
variety of pack sizes
● All generic suppliers offer very attractive sales terms and
incentives to their distribution channel and influencers
● The volume and number of smuggled CP products from Chinese and Indian sources are increasing
Original Producers Generics
APPENDIX A
Original Companies in Iran
Appendix Contents
• Bayer Set-up and Activities in Iran
• BASF Set-up and Activities in Iran
• Arysta LifeScience Set-up and Activities in Iran
BAYER CROP SCIENCE IRAN
General Company Info
• Local Bayer office incorporated in 1955
• Grew to a 4000 employee company by 1979
• Since 2009 operating under Bayer Parsian AG
• Managing Director: Andreas Löchel
• Total number of staff: 120
• Departments: Health Care, Materials, Crop Science and Business Services
• Also, representing Nunhems
• Country Head of Bayer Crop Science (BCS): Andreas Löchel
• No. of BCS staff: 17 + 1 (Nunhems)
• Scope of activities: registration, importation, marketing and sales of Bayer CP products
• Address:
Bayer Parsian AG
Bayer CropScience PO Box: 11365-716
First floor, No.264, West Dr. Fatemi Ave.
Tehran 1418643914
Iran
Tel: +98 (0)21 66 94 57 26-7
Fax: +98 (0)21 66 94 57 28
email: [email protected]
Website: www.bayercropscience.ir
BCS Iran, Crops of Focus & Products
New
Products
2009/10
AI Registration
Atlantis 1.2 OD Iodosulfuron+ Mesosulfuron
Grasses and dicots in wheat
Envidor 240 SC Spirodiclofen Psylla in pistachio Mites in citrus
Proteus 110 OD Thiacloprid+Deltamethrin
Whitefly in veg
Oberon 240 SC Espiromesifen Mites and whitefly in veg
Monceren 250 WP Pencycuron Potato seed treatment
Lamardor 400 FS Tebuconazole+Prothioconazole
Wheat seed treatment
Important Crops
Wheat
Corn
Rice
Pistachio
Apple
Vegetables
Total Number of Existing Products:
28
Herbicides: Panther 550 SC, Equip 225 OD,
Sunrice Plus 315 SC, Topstar 30 EC, Betanal
Progress 274 OF, Sencor 70% WP, Basta 200 SL
Insecticides: Calypso 480 SC, Envidor 240 SC,
Confidor 350 SC, Decis 2.5 EC, Thiodan 35% EC,
Metasystox 25% EC, Sevin 85% WP
Fungicides: Flint 500 WG, Win 300 SC, Baycor
25% WP, Folicur 25 EW
SC: Gaucho 70 WS, Raxil 2 DS, Raxil 060 FS,
Rovral 50 WP
10 products under registration including Movento (veg
insecticide) and Infinito 687.5 SC (veg fungicide)
BASF IRAN
General Company Info
• Local BASF office incorporated in 1959
• Operating under BASF Iran AG
• Managing Director: Kurt-Henning Sthamer
• Total number of staff: 100
• Departments: Chemicals, Oil & Gas, Construction, and Agriculture
• Country Marketing Manager for Agriculture: Mohammad Ali Mirza
• No. of BASF Agri Dept staff: 1
• Scope of activities: registration and marketing of Ciba (Libfer and Librel
fertilizers), Compo (fertilizers) and BASF CP products
• Address:
BASF Iran AG No. 5, Kangavar Alley
Sohrevardi Shomali Ave
Tehran 15579
Iran
Tel: +98 (0)21 88 76 82 37
Fax: +98 (0)21 88 76 28 94
email: [email protected]
Website: www.basf.co.ir
BASF Iran, Products
Total Number of Offered Products: 25
Herbicides: Focus 10% EC, Pursuit 10% SL, Butisan Star 41.6% SC, Suffix 200 EC
Insecticides: Cascade 5% DC, Roxion 40% EC
Fungicides: Stroby 50% WG, Opus 12.5% SC, Collis 300 SC (cereal fungicide)
SC: -
Fertilizers: 9 (Ciba) + 12 (Compo)
5 products under registration including Bellis 38 WG (specialty fungicide), Acrobat (potato fungicide),
Pyramin 65 WG (sugarbeet herbicide) and Basagran (herbicide)
ARYSTA LIFESCIENCE IRAN
General Company Info
• Local Arysta office incorporated in 2001
• Managing Director and Chief Representative: Vachik Faridan
• Total number of staff: 2
• Scope of activities: registration and marketing of Arysta LifeScience CP
products
• Address:
Arysta LifeScience Iran Unit 7, No. 11
16th Street
Gandhi Ave.
Tehran 15179
Iran
Tel: +98 (0)21 88 66 30 47
Fax: +98 (0) 21 88 66 33 20
Arysta LifeScience Iran, Products
Total Number of Offered Products: 10
Herbicides: Select Super 12% EC, Glyphosate 41% SL, Tribenuron methyl 75% DF
Insecticides: Propal 25% WP, Imidacloprid 35% SC, Acetamiprid 20% SP, Azinophos methyl 20% EC,
Dimethoate 40% EC
Fungicides: Captan 50% WP, Thiophanate methyl 70% WP
SC: -
6 products under registration including Everest (wheat herbicide) and Dinamic (sugarcane herbicide)