crop protection chemicals market in argentina– what are the major challenges?

Crop Protection Chemicals Market in Argentina –What are the Major Challenges?

Isolina Lopez Rivarola, Industry Analyst

Chemicals, Materials and FoodChemicals, Materials and Food

March 29th, 2011

Today’s Presenters

Isolina Lopez Rivarola

Industry Analyst

2

Chemicals, Materials and Food

Focus Points

Market Segmentation

Objectives

Top 10 Trends in the Global Chemicals Industry

Market Growth and Overview

Hot Topics

3

Growth Strategies in Latin America

Key Drivers and Restrains

Conclusions

Major Challenges

Market Forecast

Key Findings

Objectives

� Provide a market overview of the Crop Protection Chemicals Market in

Argentina;

� Evaluate opportunities;

� Review the major drivers, restraints and challenges the market will

face in the short, medium and long run;

4

face in the short, medium and long run;

� Analyze the current strategies that market participants are

implementing;

� Identify what market participants can do so as to succeed in the

market.

Top 10 Trends in the Global Chemicals Industry

5

Source: Frost & Sullivan

Market Growth

1000

1200

1400

1600

1800

Crop Protection Chemicals Market: Demand (Argentina), 2008-2010

• 2009 was a year of depressed

demand levels.

• Due to the agricultural

conflicts taking place in

Argentina, as well as one of the

worst droughts experienced in

decades, consumption

6

0

200

400

600

800

1000

2008 2009 2010

Market Revenues -Billion US Dollars

decades, consumption

decreased.

•During 2010 humidity levels

rose and yield and income

prospects were positive,

encouraging higher product

applications.

Market Overview – Argentina

Crop Protection Chemicals Market Age (Argentina), 2010

GrowthIntroduction Mature Decline

• The crop protection chemicals industry is in a stage approaching maturity.

7

Crop

Protection

Chemicals

Source: Frost & Sullivan

Market Segmentation

Crop Protection

Chemicals Market:

Market Segmentation

(Argentina), 2010

Crop Protection Crop Protection ChemicalsChemicals

Crop Protection Crop Protection ChemicalsChemicals

Crop Protection Chemicals Market: Percent of Revenues by Product Type (Argentina), 2010

Others

3.0%Fungicides

12.0% Herbicides

8

FungicidesFungicidesFungicidesFungicides

HerbicidesHerbicidesHerbicidesHerbicides

InseticidesInseticidesInseticidesInseticides

Others, moslty

acaricides

Others, moslty

acaricides

12.0%

Insecticides

18.0%

Herbicides

67.0%

Note: Others includes other less

employed products.

Market Segmentation (Contd.)

Crop Protection Chemicals Market: Percent of Glyphosate in the Total Market (Argentina), 2010

Glyphosate

43.0%

Other Crop

Protection

9

Protection

Products

57.0%

Currently, Glyphosate accounts for most of the herbicides market. Itrepresents 43.0 percent of the total crop protection chemicals market inArgentina.

Hot Topics (from the current & beyond current year)

Logistical

capabilities

Environmental impact of

Development of Biotechnology

10

crop protection

chemicals

Changes in Land

Ownership

System

Major Challenges

Institutional framework and the agricultural sector’s relationship with the government

Increasing technical

capabilities within the

agricultural sector

Maturity level of

the market

11

Source: Frost & Sullivan.

Growth of agricultural

production

agricultural sector

Dependency on imports

Challenges

Key Drivers Summary

Provision of logistical services

Increased knowledge of

specific plagues

12

Openness to new

technologiesFavourable

climate conditions

International market prices of grains and

crops

plagues

Source: Frost & Sullivan.

Inflation levels and increase in operational

Agricultural market

uncertainties

Price variation that depends on

Chinese imports

Growth of Chinese imports

Key Restraints Summary

13

operational costs

Source: Frost & Sullivan.

Market Forecast

• The Crop Protection Chemicals Market was valued at 1.53 billion US Dollars in 2010.

3.00

4.00

Re

ve

nu

es

($

Billio

n)

4%8%12%16%20%24%28%32%36%40%

Re

ve

nu

e G

row

th R

ate

• Revenues in the crop

protection chemicals market

in Argentina are expected to

grow from $1.53 billion in

2010 to $ 2.32 billion in

14

0.00

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2.00

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Year

Re

ve

nu

es

($

Billio

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-40%-36%-32%-28%-24%-20%-16%-12%-8%-4%0%4%

Re

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Revenues ($ Billion) Revenue Growth Rate (%)

2010 to $ 2.32 billion in

2017.

• Technological progress,

anyhow, has the power to

alter growth rates and

redefine utilized products.

Summary of Major Findings (Contd…)

Technical Support

Major Growth Strategies in the Argentinean Crop Protection Chemicals Market:

Distribution

Networking

15

Logistics

Investments

Distribution

Techniques

Complete Product

Portfolios

Courses and

Training Events

Pricing

Strategies

Source: Frost & Sullivan

Mergers &

AcquisitionsProduct

Improvement

Distribution Techniques

Major Growth Strategies in the Latin American Biofuels Market:

Courses and Training Events

Growth Strategies in the Crop P in Latin America

16

Product Improvement

Source: Frost & Sullivan

Complete Product Portfolios

Conclusions

The total market

currently shows growth

signalling recovery from

the crisis, and moderate

growth is expected in the

future.

Uncertainty due :

Cost considerations come first and

Key client-specific services can

make a difference

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1.00

2.00

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Year

Re

ve

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($

Billio

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-40%-36%-32%-28%-24%-20%-16%-12%-8%-4%0%4%8%12%16%20%24%28%32%36%40%

Re

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Revenues ($ Billion) Revenue Growth Rate (%)

17

Uncertainty due :

• climate changes, • the agricultural sector's relation with the government, • the dependency on the Chinese Market, and,• the changes new technologies might bring about.

Increase in international

cereal and grain prices

Thank you for your attention!

18

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For Additional Information

Isolina Lopez Rivarola

Industry Analyst

Chemicals, Materials & Food

(54 11) 4771-8006

Isolina.Lopez@frost.com

Fernando Serra

Sales Director

Latin America

(54 11) 4777-1550

fserra@frost.com

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Alessandra Lancellotti

CBU Leader

Chemicals, Materials & Food

(55 11) 3065-8447

alessandra.lancellotti@frost.com

Tatiana Brull

Marketing Communications Executive

Corporate Communications LA

(55 11) 3065-8445

Tatiana.brull@frost.com