1 1 The Biological Pesticide Market

The Biological Pesticide Market
Dr. Matthew Phillips, Phillips McDougall AgriService
The last few years has seen a significant level of investment from conventional agrochemical companies
in the biological pesticide sector. This investment has encompassed new product development and
expenditure on new facilities, as well as a number of significant product and company acquisitions.
Acquisitions Involving Biological Pesticides (2010-present)
Company
Year
Plant Health Care
2010
Intellectual property portfolio of Myconate from Bayer CropScience
MAI
2010
Plant growth regulator Talent, based on the active ingredient Carvone,
from Formuchem
Becker Underwood
2010
Biological Control Products (BCP), a producer of biological crop
protection products based in South Africa
Bayer
2010
Biofungicide Shemer from Israeli company AgroGreen
Bayer
2010
A Varroa mite (Varroa destructor) control product from Exosect
Tessenderlo Kerley
2011
Purfresh Inc’s crop protection sun screen business and product line
Syngenta
2012
US-based company Pasteuria Bioscience
Novozymes
2012
US-based biological pest control company Natural Industries
MGK
2012
Assets related to the biological insecticide Veratran-D
Koppert
2012
Brazilian bioproducts company Itaforte Bioproducts
CBC Group
2012
Italian biopesticide company Intrachem Bio Italia
Bayer
2012
US-based biological crop protection company AgraQuest
BASF
2012
US-based biological products company Becker Underwood
Andermatt Biocontrol 2012
24.9% stake in the Germany biopesticide company Abitep
De Sangosse
2013
Equity stake in the UK-based company Alpha Biopesticides
Bayer
2013
German biological crop protection company Prophyta
Amvac
2013
29.46% ownership position in the US-based biological insecticide
company TyraTech
Novozymes
2013
TJ Technologies
FMC
2013
Acquired CAEB, a division of the North-Carolina based company
RTI International
AGROLOOK
Acquisition
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JAN-MARCH 2014
For the purposes of this review the term
biological pesticide is taken to include biologically
based herbicides, insecticides, fungicides and other
products, including organisms, with actions that
are used in the crop protection sector. Based on this
definition there are four main types of products
considered to be in the sector:
significant product category commercially in 2012
was natural products, which accounted for $1,148
m., equivalent to 63.3% of the overall biological
market. Thereafter the most significant product
type was microbial-based biopesticides, which
accounted for a further $479 m.
Quantification of the Current Biological
Product Market by Product Type
A. Macrobials
Macrobial biological products that are used in crop
protection comprise living organisms that are either
predatory or parasitic in their action against pests,
usually insects.
Product type
Sales (US $m) % of total
Macrobials
138
7.6
Microbials
479
26.4
Products in this category include parasitic
insects such as wasps that lay their eggs within
an insect pest; predatory insects such as ladybugs,
lacewings and insect larvae that are predators of
insect pests; and nematodes that act as natural
parasites on insect larvae.
Semiochemicals
48
2.7
63.3
Grand Total
100
1813
In contrast to natural products and microbials,
biological pesticides based on macrobials and
semiochemicals are commercially less significant,
contributing a value of $ 138 m. and $ 48 m.
respectively.
B. Microbials
Microbial pesticides comprise microorganisms,
usually a bacterium, virus, fungus or protozoan,
applied directly to plants that have activity against
a particular crop pest. Commercially the most
important microbial pesticides are varieties of
Bacillus thuringiensis: these are active in the control
of several important lepidopteran larvae.
The following table outlines the sales of the
leading six biological pesticide products. Four of the
leading biological pesticide products are classified
as natural products, with the leading product being
abamectin with sales of $ 360 m. in 2012, followed
by spinosad with sales of $ 260 m. In total the six
leading products accounted for a sales total of $
1175 m., equivalent to 64.8% of the biological
pesticides market.
C. Semiochemicals
Semiochemicals used in crop protection comprise
pheromones that act by modifying insect behaviour.
These products are used to interfere with insect
mating or act as attractants for insect traps.
Sales of Leading Biological Pesticides in 2012
D. Natural products
Products within this category include fermentationbased products with activity as crop protection
agents, as well as naturally derived products that
have activity against pests and diseases.
Based on our analysis of the products,
companies and markets that make up the sector,
the overall value of the market for biological
pesticides as defined above was estimated to have
been $1813 m. in 2012. Within this value the most
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Natural Products 1148
2
Product
type
Active
Ingredient
2012 Sales
(US $m)
Natural Products
Abamectin
360
Natural Products
Spinosad
260
Natural Products
Emamectin benzoate
180
Natural Products
Spinetoram
165
Microbials
Bacillus thuringiensis
160
Microbials
Bacillus subtilis
50
JAN-MARCH 2014
Whilst the major companies have during
periods in the past made some entrances into the
biological products sector, it was not until the
expansion of abamectin for use as a nematicidal
seed treatment to great success that a major interest
in this sector started. Abamectin as a seed treatment
was soon followed by Bacillus firmis, again as a
nematicidal seed treatment, with a number of recent
acquisitions also driven by activity in this particular
sector. All of the products in the above list have
insecticidal activity, except for Bacillus subtilis
which is used for the control of bacterial and fungal
diseases on a range of crops, but particularly oilseed
rape, vine and potato.
Quantification of the Current Biological Product
market by Region
For the biological pesticide sector as a whole,
the most important crop outlet is believed to be the
conglomerate fruit and vegetable market, in part
reflecting the use of these products in relatively
enclosed environments. Thereafter the most
important individual crop sector is estimated to
have been cotton, followed by rice, with maize
gaining in importance. The biological products with
activity as nematicidal seed treatments have the
greatest impact in maize and cotton.
Although the leading regional market for
biological pesticides is estimated to have been Asia,
the leading country market is the USA, with an
estimated value of $ 438 m. in 2012, followed by
China ($ 233 m.), Japan ($ 203 m.), Brazil ($ 137
m.) and India ($ 96 m.).
% of Total
NAFTA
503
27.8
Latin America
207
11.4
Europe
252
13.9
Asia
782
43.1
Middle East
& Africa
69
3.8
Grand Total
1813
100.0
A key concern regarding biological products has
always been reproducibility of activity in open field
situations, as a result at present the major markets
are on fruit and vegetables, particularly those grown
in glasshouses in controlled environments. However,
this situation is now changing, with increasing
usage of biological seed treatments, also a controlled
environment when products are encapsulated
around the seed. This is expanding the usage of
biologicals in row crop sectors. A noticeable link
between a number of the recent mergers and
acquisitions has been product opportunities such as
seed treatments, particularly with nematicidal
activity.
Fruit and
vegetables 56.2%
Maize 3.6%
Rice 6.8%
Cotton 9.0%
Whilst the market for biological products is
improving from a relatively low base, it is unlikely
that the sector will achieve high growth rates until
reproducibility of action in the field can be proven.
Interestingly, Europe has a relatively low share of
the sector at present, although this is likely to
change in the near future, with a higher proportion
From a regional perspective the leading market
for biological pesticides is Asia, which accounted for
a total value of $782 m., equivalent to 43.1% of the
total market, followed by North America with a
27.8% share.
AGROLOOK
Sales
(US $m)
Overview and Outlook
Sales of Biological Pesticides Split by Leading
Crop Sector – 2012
Other crops 24.4%
Region
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JAN-MARCH 2014
of the products awaiting Annex 1 approval now
biologicals. Also, 1107/2009, the current EU
agrochemical product registration legislation, calls
for ‘comparative assessment of products and
replacement with safer alternatives’; a safer
alternative may well be a biological solution. Under
the most recent amendment to the common
agricultural policy, which was agreed in mid-2013,
for farmers to sustain direct subsidy payments
they are obliged to embrace integrated pest
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management, which again should provide a market
opportunity for biological products.
A key factor is likely to be greater R&D
investment in the area now that many of the major
agrochemical companies have an interest in the
sector; this coupled with the market opportunities
listed above suggests that the biologicals sector
may perform ahead of the crop protection sector as
a whole, which is expected to grow by 2.3% p.a. in
volume terms through to 2017.
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