Thursday, 26 May 2016
Takeovers & Consolidation in the farm industry to stir up competitive landscape in Fungicide Market
Prominent agrochemicals companies are moving towards consolidation, driven by factors such as large drop in commodity prices and the strategic benefits of collaboration between various seeds and pesticides markets
Applications of Fungicides an effective crop strategy
Fungicides are different types of pesticides used as protectants or eradicates to prevent plants against getting infested with fungi. The fungi cause mold, rot or diseases and impedes the proper development of saplings and crops. Fungicides has formed an effective crop strategy used by agriculturalists to augment the crop yield and a comprehensive solution to control disease in plants. Fungicides as pesticides are gaining traction across regions where the crop is likely to be infested by fungi, driven by need to improve the storage shelf life and to enhance the quality of agricultural produce; their applications help farmers to safeguard them against a significant produce loss that occurs after occur post-harvest, which results in huge money losses in agriculture.
Several ways of classifying fungicides exist: they are classified on the basis of chemical group, modes of action, and by the alteration of physical properties once inside the plant. Furthermore, on the basis of mode of action fungicides can be specific or general; general ones have a wide range of activity and are helpful for plant cultivators and plant growers to protect several types of pathogenic fungi, examples are sulfur, captan, and mancozeb. Apart from the preventing effects of fungicides they also exhibit curative properties; that is, they are effective against a wide range of pathogens that may have infected the plant, or is useful in those plants that tend to have a higher risk of pathogens developing resistance to common fungicides. Recent developments indicate fungicides to be potent pesticides in preventing stripe rust and other foliar fungal diseases infesting the crop wheat.
Consolidations between businesses of crop seeds and pesticides: Recent Developments
Witnessing the immense functionalities and applications of fungicides have led key market players and stakeholders in farm businesses to go for consolidations between businesses of crop seeds and makers of pesticides. Various possible and speculative acquisitions are poised to stir up the competitive landscape scenario of Fungicides Market and keep the investors and busy contemplating the effect of the acquisitions on agrochemical businesses.
A German pharmaceutical and crop chemicals major Bayer AG has offered $62 billion to buy Monsanto, a U.S. based seeds company; the development would augment the stake of German multinational chemical company to become a dominant player in the seed and pesticide business across the player. As revealed by German major, it intends to pay Bayer $122 a share in cash, representing a 37 % premium to Monsanto's closing price on May 9; however, the proposal is yet to be accepted. According to Thomson Reuter’s data, the yet-to-be accepted proposal by Monsanto will make for the largest all-cash takeover on record. The company reveals that the deal has already been through the necessary approvals by supervisory and management boards and the German major is optimistic about the impact of consolidation. The deal if consummated would help the company to expand its product offering to include antibiotics, genetically modified crops and pesticides, with an annual revenue of over than $67 billion. As claimed by Bayer, buying Monsanto would enable Bayer to tap the rapidly surging demand of food and will be helpful to farmers to boost their productivity so that an estimated 10 billion people globally can be fed by 2050.
Fungicide Market Overview & Prospects
World over, leading agrochemicals companies are moving towards consolidation, driven by factors such as large drop in commodity prices that has adversely farm incomes, and the benefits of collaboration between various seeds and pesticides markets. China National Chemical Corporation, a Chinese state-owned chemical company, announced in February the acquisition of Syngenta AG, the Swiss agribusiness that produces agrochemicals and seeds, for a sum of approximately $43 billion. In another of the major takeover, DuPont Co. and Dow Chemical Co. have planned to enter into collaboration and carve a niche space in agrochemical business. Witnessing the ample growth prospects in the industry, Allied Market Research has published a report titled “World Fungicides Market - Opportunities and Forecasts, 2013 – 2020”; the global fungicides market would reach$16.2 billion by 2020, growing at a CAGR of 5.4% from 2014 to 2020. The analysis tracks the current market dynamics, emerging trends, recent takeovers and mergers, and technological innovations that shape up the competitive landscape in fungicides market.