Bayer Ag, a name known for its original brand of aspirin, is ready to take on a new kind of headache that is flaring up on crop farms: glyphosate resistance.
For years, glyphosate, the active ingredient in Roundup herbicide, has been a favorite. It is easy to use, relatively inexpensive and kills weeds. Yet, because of its widespread use, a growing number of weeds have become resistant to the chemical (see “Weeds rebound,” page 51).
Bayer CropScience, a division of chemical and pharmaceutical giant Bayer Ag, sees the gap in glyphosate as an opportunity to grab a larger share of the herbicide market. In October the company brought a group of U.S. crop consultants and journalists to its headquarters in Monheim, Germany, to show the results of its research efforts.
Third in sales
Bayer CropScience was formed in 2002 following Bayer AG's purchase of Aventis CropScience. In 2006 the group generated sales of 5.7 billion Euros, giving it a 17% share of the crop protection market. According to Chairman of the Board Friedrich Berschauer, the company ranks third in the world for herbicide sales, behind Monsanto and Syngenta.
Although the company ranks number one in the world in insecticide and seed treatment sales and second in fungicides, herbicides are the largest segment in the crop protection market. “It's no secret that herbicides account for 47% of the estimated 25,460 million Euros in crop protection sales,” Berschauer says.
Hermann Stubler, head of herbicide research at Bayer CropScience, says that 75% of the herbicide market is dominated by only six modes of action, the main one being glyphosate. “Glyphosate-resistant weeds are now a reality in all major crops, including corn, cereals and soybeans,” Stubler says. “So we have now to find new weed management tools that can manage those weed shifts with new chemistries.”
New active ingredients, safeners
Between 2000 and 2006 Bayer CropScience launched 17 new active ingredients, which is the highest innovation rate in the industry, according to the company. Bayer expects to launch a total of 26 active ingredients by 2011 with a sales potential of 2 billion Euros.
Three of these new active ingredients are scheduled for launch in 2008: tembotrione and pyrasulfotole, the active ingredients in the new Laudis and Huskie herbicides, and flubendiamide, the active ingredient in Belt insecticide.
“If we look at the competitive situation, Bayer is leading the herbicide innovation and research role,” Stubler says. “Not far from 50% of the global herbicide pipeline in recent years is coming from our company.”
He says the herbicide brands with the highest success rate have contained safeners. As a result, most of the new compounds being launched by Bayer, including Laudis and Huskie herbicides, are safener-based. These allow for the use of strong, broad-spectrum active ingredients — such as tembotrione and pyrasulfotole — without the risk of crop damage.
The company plans to use its safener technology to commercialize existing herbicides that were considered too damaging in the past. It also will continue to research new safeners that are even better at protecting crops. The company expects that about 50% of its herbicide income will come from safened products by 2015.
Three to survive
In 2006, Bayer Ag spent 614 million Euros, or 27% of the company's total research and development budget, on its crop science division. Bayer hopes that investing heavily in herbicide safener and active ingredient research will produce products to build herbicide sales.
According to Stubler, Bayer CropScience has been alone in safener research in the past five years based on the number of reported patent applications. Industry-wide the number of patent applications for herbicidal substances has declined by 80% in recent years. “In 1989, there were 250 herbicidal substance patent applications among agrochemical companies,” he says. “Today there are only 50 or 60.
“The companies with the most herbicide patent applications in the last five years are Bayer CropScience, Syngenta and BASF,” Stubler continues. “This points to an apparent dropout or retreat of some key players in research for new herbicide active ingredients, such as Monsanto, Sumitomo, DuPont and Dow.”
Because Bayer is one of the few companies still investing in basic research, its fungicides, insecticides, safeners, seed treatments and herbicides have important market potential. Stubler predicts that only three significant herbicide companies will survive: Bayer, Syngenta and BASF.
“Because we have the leading position in herbicide innovations, we estimate we will have the largest portfolio by 2012,” Stubler argues. How well this commitment to research translates into real market gains in the United States will be the central question confronting Bayer in the next few years.
STRATEGY FOR CORN
Although a major player in cotton, cereals and canola, Bayer CropScience has been seen as a minor player in the corn herbicide market. The company plans to change that by introducing four new corn herbicide brands in the next two years.
“We've had some products out there in the past, like Balance, Radius, Option and Equip,” says Jeff Springsteen, market manager for the company's corn herbicide products. “But some of those brands were ‘me-toos’ or had problems with crop injury. Now we are basically reinventing Bayer in the corn herbicide market.”
Four new brands will be added to the company's existing corn herbicide lineup. These are Laudis herbicide, which the company anticipates launching by 2008, along with three additional corn herbicides to be launched in 2009. ”Two of those products are postemerge and two are preemerge products,” Springsteen says. “So we will have a product that fits any program a farmer has, whether it is pre, total post, or pre followed by post.”
The products will be sold in addition to Radius, Balance, Option and Autumn corn herbicides. However, with the exception of Autumn and Option, these older brands will be phased out over time.
“The key thing now is that we will have a full herbicide portfolio that will be second to none,” Springsteen says. “We can compete with anyone now, including Syngenta and Monsanto. Growers will be able to use our products to fill all their herbicide needs.”