Future looking bright for BASF

By Andy Doyle

The future in tillage looks good from an agrochemical company's perspective, according to BASF representatives at a recent press briefing. The company's president of Agricultural Products division, Michael Heinz, and the President of BASF Agricultural Products Regional Business Unit Europe, Klaus Welsch, told a gathering of journalists from various parts of the globe that BASF's strong pipeline of products in development, plus its innovative ideas division, seems set to deliver continuing strong growth over its competitors.

The positive future for farming is also positive for suppliers of raw materials to the sector.

Farm incomes will be boosted by the improved prices that are likely to be ongoing. Potential for improved incomes will see increased areas in production and a bigger spend to protect potential yields and margins. And the demand side will continue to be boosted by increasing population, increasing demand for meat and increasing demand for renewable energy products.

The half year

BASF sold €930 million worth of agricultural products into its key European market in the first half of this financial year (up 4% on the same period last year). The increase was mainly a result of higher than normal disease pressure. Sales performance was more variable in other regions, but average performance was more or less on par with last year, despite having sold off one of its US companies.

Mr Heinz told us that herbicide tolerant GM technology is hitting the sales of herbicides in many crops. However, natural evolution is now introducing new problems into some of these markets that now need separate attention. And they see this as a significant opportunity going forward.

Fungicides have become the most important sales group in this half-year, narrowly beating herbicides. This is largely a seasonal/ climatic effect however, but reflects the increased usage of fungicides for the control of soyabean rust.

The market for crop inputs will unquestionably be helped by higher product prices and the higher value of marginal output.

High prices will also drive monoculture production, with associated increased chemical usage, plus the increasing need to manage resistance or tolerant species. BASF's new herbicide, BAS 800H, will offer a new mode of action coupled with pre or post emergence application options in both corn and soyabeans.

Population impact

The world's population is increasing and so is consumption. People need more food, more energy and a better standard of diet.

Just over 45 years ago, there was an estimated three billion people to feed on earth. This has increased considerably since then ( see Table 1) resulting in significantly reduced land available to feed each person.

Alongside this, there is also an ever-increasing demand for energy. In 2005, it is estimated that the world used 30 billion barrels of oil and this looks set to increase to 41 billion by 2030.

To replace only 10% of this from crops, using current technology, would require 450 million hectares - about 30% of the world's cropland. For these reasons, biofuels will continue to impact on farming into the future irrespective of new technologies being introduced.

The current consumption of meat in China is estimated at 45kg/head/year. This is 70-80kg per head in the US and Northern Europe. China and parts of Asia are now expected to increase meat consumption by one kilo per person per year as a result of rising incomes. This equates to a huge amount of animal protein and an even greater amount of grain.

Oilseeds

Oilseed crops are seen as an important market for BASF for a number of reasons. Crop inputs are the most obvious benefit here but the company is also involved in other innovations such as herbicide tolerance in sunflowers.

In 2003, BASF introduced herbicide tolerance in sunflowers in Turkey. This was a conventionally bred herbicide tolerance that allowed for the control of extremely troublesome weeds. Its CLEARFIELD technology has since been introduced into the Ukraine, Bulgaria, Romania, Hungary and Moldavia, with plans to introduce it into Russia and France in the near future.

With such an interest in oilseeds, it is not surprising to see BASF involved in the production of biodiesel and other areas relating to these technologies. The company has long been involved in the production of additives etc. for the diesel market and is also a major supplier of products and ingredients for the production of biodiesel, such as various additives and catalysts.

With innovation being a key objective for BASF, it is not surprising to see the company sponsor the development of a BioConcept-Car. This means a lot of renewable materials with biodiesel-fuelled racing car performance from a Ford Mustang.

Table 1 World population trends and its consequence for the amount of land available to feed each person.

	1960	2005	2030
World population (billion)	3.0	6.5	8.3
Arable land/person (ha)	0.43	0.22	0.18