Our Business Context
We focus on crop protection and fertilizer
Growth in global population, limited expandability of arable land, lower levels of current crop production due to efficacy and resistance issues, increasing biophysical effects of climate change induced events on yields, losses occurred post-harvest along storage and distribution, changing dietary patterns of consumers are just some of the macro & micro demand drivers for crop protecting solutions around the globe.
As such the current (FY2016) annual global plant protection product (PPP) market is estimated to be around US$ 64 billion in size and rapidly growing, in terms of volume and price. CAGR is approximately 5.4% over the next 6 years thereby reaching around US$ 88billion by 2022. EBITDA margin of roughly 90% of the industry is at +20%.
And despite size, growth and profitability of the industry there is massive global industry consolidation. This is mainly due to an increasingly tightening regulatory environment (e.g. introduction of hazard based cut-off criteria through EC 1107/2009) for registration and re-registration of technologies and the tremendous pressure it exerts on existing technology portfolios and pipelines of globally established market players.
Therefore, new technologies with promising bioactivity and regulatory profiles have a risk premium and an upside potential commensurate to that.
PPP market comprises segments such as bactericides, fungicides, insecticides and herbicides.
Value chain
In the discovery phase, we, either through natural sources or chemical synthesis, generate a set of candidate molecules. The first chemical and biological screens on new candidate molecules or structures, to understand biological activity for example, are conducted in GLP laboratories. This is followed by preliminary toxicological and environmental tests.
Once it’s established that our leads have suitable crop protecting properties under laboratory conditions we move to the development phase to investigate these properties further against a variety of targeted diseases on a number of crops under various environmental situations. For this we apply small and large scale greenhouse tests and field trials.
These studies forms basis not only for formulation evaluation but inter alia are also part of larger toxicological and environmental test programmes to meet statutory product registration requirements.
