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Crop Protection Market in Iran


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Crop Protection Market in Iran

  1. 1. Crop Protection Market in IranJuly 2011
  2. 2. DisclaimerThe author, Amir H. Azadehnia, does hereby certify that, to the best of hisknowledge, the views and opinions in this research report reflect his personalviews about the companies named. He has not nor will not receive direct orindirect 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 andestimates expressed here represent the views of the author as of the date ofthis report. These opinions and estimates may be subject to change withoutnotice. The author will not be responsible for any consequences associatedwith reliance on any statement or opinion contained here.
  3. 3. 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 MarketValues• CP Competition Monitor• Appendix A: Original Companies in Iran
  4. 4. 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
  5. 5. Agriculture Sector DashboardMacroGDP Growth RateExpected 0% in 2011(IMF, April 2011)1% in 2010 (IMF, April2011)Population74,000,000Unemployment16% (2010 est.)Inflation (2011)Est. at 21% - 22%(EIU, March 2011 andIMF, April 2011)Currency7 July 11 ex. rates:Official - 1 USD =10617 IRRMarket - 1 USD=11650IRRCountry Risk RatingB (EIU, March 2011)WeatherWarmer with less rainfalls. In Jan – June 2011, central Iran received the lowest rainfalls in the records. Country ave rainfall has been75% less than normal so far.FarmingEconomySeedsNot a major component of the input cost, exceptfor vegetablesCP SpendingCP Market Size 2011: USD 110 millionApp. farm CP expenditure per ha: USD 10Fertilizer and UtilitiesReduced fertlizer subsidies incerealsHigher energy costsHigher water costsLaborThe highest input costFarm ProducePricesCheap importsGov‘t controlledCropsCereals2010/11 season:estimated drop ofharvested area to app.3 million ha because ofdroughtResistant weedsreported in app. 1million haVegetablesArea remains stable,estimated at 820,000ha + 180,000 ha forpotatoeTuta cases reported inmost placesPistachioDepleted waterresources remain anissue in Kerman areaWeaker performance inexport marketsAppleNormal at160,000 haCitrusStable at220,000 haSugarbeet/SugarcaneSugarbeetreached100,000ha driven byhigher sugarprice and importtariffsRegulatory/PoliticsPoliticsRemains uncertain (UN/US/EU trade limitations, erratic economic/agripolicies, business and consumer low confidence, poor country credit risk)RegulatoryBetter awareness about consumer safetyIncreased registration charges per target per cropto 11,000 USDFarmers‘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
  6. 6. Agricultural MapsAdministration Ave Precipitation mm/yr31 Provinces
  7. 7. Agribusiness Macro Environment 1• Emphasis on, but partial support for,self-sufficiency in food production• Policies moving away from inputsubsidies & focusing on farminginfrastructure development• Farm product exports are encouragedbut not supported in practice• Cheap agri-product imports to slow-down inflation• Trade restrictions• Long CP and seed registration times• Weak intellectual property & trademarkrights protection• Most farm input subsides are eliminated: afully liberalised CP market since 2008• Negative to small agri sector growth rate (-10% in 2009)• Gov’t imposed price caps for strategic farmproducts, at the same time, some farmproducts are now traded in commoditiesmarket• Slow economic growth rate and high inflation• Country average farm expenditure: app. 10USD/ha• Under-developed infrastructure, mainly inbanking, distribution and retail sectorsPolitical / Legal Economical
  8. 8. Agribusiness Macro Environment 2• Investment on improving water resourcesand farm irrigation systems• Greenhouse farming is encouraged• Low levels of mechanisation and hp perha• Hybrid seeds• Biological plant protection techniques arepromoted• Arable land 12 m ha - 5.3 million farmownerships• Number of people working in agriculture: 10million• 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 yearsTechnological Social / Environmental
  9. 9. Agribusiness Micro Environment (Porter’s Diamond)Strategy &RivalryDemandFactorConditionsRelatedIndustries& ServiceGovernment• Intensification• Demand for better farmproduct yield and quality• Increased use of high tech CP & seeds• MRLs important for exports• Under developed agri produceprocessing 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 lobbyto limit original producer’s market reach• Willingness to improve farmingproductivity & quality• Small farms result in weakfarm economy• Emergence of resistant pests& weeds• Water shortage • National Policy & Planning: Ministryof Agriculture• Education: Local Agri Offices• Product Registration and CP Regulatory:Plant Protection Organisation (PPO)• Retailer Tech Supervision: PPO• Commercial distribution and retailsupervision: Ministry of CommerceGov’t remainedsubsidised stock willaffect market adverselyby 2011
  10. 10. Agribusiness Market StructureImports(~ 75 companies)Local Formulators(~ 25 plants)Local ProducersASSC/CoopsIntegratedDistributor/RetailerRetailersFarmersTech/PremixMaterialCP: Import Permitby MoC and PPOFertilizer: ImportPermit by MocMacro Fertilizersand SulfurSeed TreatmentCompaniesCereal/Corn …SeedsMostly Generic CPSome Underlicense CPMicro FertilizersFinished ProductsCP: Import Permit by MoC and PPOSeeds: Import Permit by MoC, MoA, PPOand Seed Certification InstituteMicro Fertilizer: Import Permit by MocMacroFertilizers> 3000 Outlets
  11. 11. 507090110130150170190 20062007200820092010201120152019USD millionHistoric Market Data Forecast2011 CP Market Size and Trends
  12. 12. CP Market Size: 2010 vs. 2011137110020406080100120140MarketSize-2010DroughtWeakerFarmEconomyLowerGenericPricesIntlFundTransferLimitationsQualityCPHigherFoodPricesMarketSize-2011MarketSize,millionUSD
  13. 13. CP Market Outlook● 2011 business environment prospects: 0%economic growth – high inflation - stricterinternational trade limitations – IRRdepreciation - water shortage● Because of structural economic changes andad-hoc political and economical approach,business confidence and forecasting accuracyare lower● Forecasted slower CP market development in2011-2015 with mid-term market outlook highlyuncertain and dependent on future verificationsof political, economic and agri policies● Spread of tolerant pest varieties● Less water resources available● Less arable land due to high desertification rate, butan increased area of irrigated and intensive farmingplus an increased area of orchards andgreenhouses.● Partial shift in farming patterns from field crops tovegetables● Advanced farm management practices and betteryields● Cost of production per ha increasing. So are thelocal 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 chainand water management2011 Long-term
  14. 14. CP Market Value Break Down in 201049%30%12%8% 1%Est. CP Market Value Break DownHerbicidesInsecticidesFungicidesSeed CareOther34%35%11%20%Est. CP Market Value Break DownCerealsFruits & NutsVegetablesOtherBy Product Line By Crop
  15. 15. Cereals, Veg.,Corn, SugarcaneCP: 13 mio USDCereals, Veg.,Corn, Fruits &NutsCP: 16 mio USDCereals, Veg.,DFC, Fruits &NutsCP: 9 mio USDVeg., PistachioCP: 12 mio USDVeg., Fruits &NutsCP: 2 mio USDCereals, Veg.CP: 6 mio USDRice, Fruits &NutsCP: 13 mio USDCereals, Veg.,Fruits & NutsCP: 4 mio USDCereals, Veg.,Fruits & NutsCP: 10 mio USDCereals, Veg.,DFC, Fruits &NutsCP: 8 mio USDCereals, DFCCP: 6 mio USDCropping Patterns and Estimated Provincial CP Market Values
  16. 16. CP Competition Monitor● Absence of American original producers● Syngenta is present through a representativeoffice responsible for technical support.Syngenta products are imported and distributedby two companies: Hezare and Raha AndishKavan● Bayer CropScience is directly present in themarket and developing their portfolio andmarket reach. Bayer has establish own route tothe market led by blockbuster wheat herbicide,Atlantis OD● Other original companies with localrepresentative offices: BASF, ArystaLifeScience, Sumitomo Chemicals...● Chinese and Indian companies mostly supply technicalmaterial to local formulators● There are 25 (out of 45) local formulators active in themarket with a combined MS of around 80%. The largestone by volume is Gyah and by value is Golsam GorganChemicals● Gyah, Golsam Gorgan, Aria Shimi, Partonar and GhazalShimi are supplying large volumes of cheap genericproducts to many retailers● Most local formulators offer a wide range of products in avariety of pack sizes● All generic suppliers offer very attractive sales terms andincentives to their distribution channel and influencers● The volume and number of smuggled CP products fromChinese and Indian sources are increasingOriginal Producers Generics
  17. 17. APPENDIX AOriginal Companies in Iran
  18. 18. Appendix Contents• Bayer Set-up and Activities in Iran• BASF Set-up and Activities in Iran• Arysta LifeScience Set-up and Activities in Iran
  20. 20. 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 AGBayer CropSciencePO Box: 11365-716First floor, No.264, West Dr. Fatemi Ave.Tehran 1418643914IranTel: +98 (0)21 66 94 57 26-7Fax: +98 (0)21 66 94 57 28email: info@bayercropscience.irWebsite:
  21. 21. BCS Iran, Crops of Focus & ProductsNewProducts2009/10AI RegistrationAtlantis 1.2 OD Iodosulfuron+MesosulfuronGrasses and dicotsin wheatEnvidor 240 SC Spirodiclofen Psylla in pistachioMites in citrusProteus 110 OD Thiacloprid+DeltamethrinWhitefly in vegOberon 240 SC Espiromesifen Mites and whiteflyin vegMonceren 250 WP Pencycuron Potato seedtreatmentLamardor 400 FS Tebuconazole+ProthioconazoleWheat seedtreatmentImportant CropsWheatCornRicePistachioAppleVegetablesTotal Number of Existing Products:28Herbicides: Panther 550 SC, Equip 225 OD,Sunrice Plus 315 SC, Topstar 30 EC, BetanalProgress 274 OF, Sencor 70% WP, Basta 200 SLInsecticides: Calypso 480 SC, Envidor 240 SC,Confidor 350 SC, Decis 2.5 EC, Thiodan 35% EC,Metasystox 25% EC, Sevin 85% WPFungicides: Flint 500 WG, Win 300 SC, Baycor25% WP, Folicur 25 EWSC: Gaucho 70 WS, Raxil 2 DS, Raxil 060 FS,Rovral 50 WP10 products under registration including Movento (veginsecticide) and Infinito 687.5 SC (veg fungicide)
  22. 22. BASF IRAN
  23. 23. 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 Librelfertilizers), Compo (fertilizers) and BASF CP products• Address:BASF Iran AGNo. 5, Kangavar AlleySohrevardi Shomali AveTehran 15579IranTel: +98 (0)21 88 76 82 37Fax: +98 (0)21 88 76 28 94email: basf.iran@west-asia.basf.orgWebsite:
  24. 24. BASF Iran, ProductsTotal Number of Offered Products: 25Herbicides: Focus 10% EC, Pursuit 10% SL, Butisan Star 41.6% SC, Suffix 200 ECInsecticides: Cascade 5% DC, Roxion 40% ECFungicides: 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)
  26. 26. 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 CPproducts• Address:Arysta LifeScience IranUnit 7, No. 1116th StreetGandhi Ave.Tehran 15179IranTel: +98 (0)21 88 66 30 47Fax: +98 (0) 21 88 66 33 20
  27. 27. Arysta LifeScience Iran, ProductsTotal Number of Offered Products: 10Herbicides: Select Super 12% EC, Glyphosate 41% SL, Tribenuron methyl 75% DFInsecticides: Propal 25% WP, Imidacloprid 35% SC, Acetamiprid 20% SP, Azinophos methyl 20% EC,Dimethoate 40% ECFungicides: Captan 50% WP, Thiophanate methyl 70% WPSC: -6 products under registration including Everest (wheat herbicide) and Dinamic (sugarcane herbicide)