FY2023: Global top 20 agrochemical companies saw fall of revenues, PI Industries achieving growth against adverse market conditions

A few days ago, AgroPages released the FY2023 top 20 list of global agrochemical companies. In the circumstances of the Russia-Ukraine war, exchange rate fluctuation and the fight against climate change, most companies could not survive from the declination of sales, although many companies had taken proactive measures. Despite the adverse situation, the agrochemical industry as a whole appeared resilient and remarkably adaptive.

In the fiscal year 2023, the total pesticide sales of the global top 20 companies amounted to US$73.847 billion, a 13.89% decrease compared to the US$85.762 billion in the fiscal year 2022. It is worthy of note that the sales of the first-tier agrochemical giants – Syngenta, Bayer CropScience, BASF and Corteva, accounted for 59.50% of the total sales of the top 20 companies,  an increase of 4.5% compared to the fiscal year 2022.

In the fiscal year 2022, almost all companies on the top 20 list, except Nanjing Red Sun ranking 20th, each achieved revenues of more than US$1 billion. However, in the fiscal year 2023, the number of companies with revenues of less than US$1 billion increased from one to six. A total of 12 Chinese companies were included on the list, with total sales of US$30.724 billion accounting for 41.6% of the total sales of the companies on the list, a decrease of US$6.345 billion compared to 2022.

12 companies have been on the list for many years, which undoubtedly demonstrate their strong market competitiveness and corporate strength. Guangxin Agrochemical and PI Industries, as newly ranked on the top 20, ranked respectively 17th and 20th with revenues of US$822 million and US$761 million respectively. Surprisingly,  PI Industries is the only company on the list achieving revenue growth in the fiscal year 2023, with a revenue growth of 19.84%.

Although the fiscal year 2023 was full of challenges to the global agrochemical industry, the performances of the top 20 reflected the resilience and adaptability of the agrochemical industry. Companies have been constantly making innovation and adaption of business strategies so as to maintain the competitiveness in such a complex and volatile market environment. Looking ahead, with the gradual recovery of the global economy and the continuous advancement of industry technology, there is a reason for us to believe that global agrochemical enterprises are able to overcome the current difficulties and meet a brighter future.

Syngenta AG

Since 2020, Syngenta has ranked first on the top 20 list of global agrochemical companies for four consecutive years. Compared to 2022, there was a slight decrease of revenue by 4.36%. Among the product lines, sales of selective herbicides decreased by 6%, mainly due to lower demand for the GESAPRIM^® products from the market of Brazil and the market of the United States; for non-selective herbicides, which include GRAMOXONE^®, REGLONE^® and TOUCHDOWN^®, there was a sharp decrease by 56%, mainly attributable to the unusual high demand in the Latin American market in 2022, resulting in a decline in both the price and sales of TOUCHDOWN^®. Meanwhile, the sales of GRAMOXONE^® decreased in the United States and northern Latin America. Noticeably, the sales of fungicides saw a 7% growth, due to the satisfactory performance of the ADEPIDYNTM technology. The sales of insecticides decreased by 2%, though the Latin American market appeared positive to the new PLINAZOLIN^® technology which led to increased sales, yet the increased sales were offset by decreased sales of conventional products. The sales of seed coating agents increased by 2%, attributable to the positive performance of the Chinese market and the Asian market.

Bayer CropScience

Since 2020, Bayer CropScience has ranked second on the top 20 list of global agrochemical companies for four consecutive years. In 2023, the overall sales of Bayer CropScience decreased by 16.81%, as affected by the declined price of glyphosate. Fungicide sales increased in all regions, mainly due to the rising prices and the increased sale volume in Latin America and North America, despite the lower sale volume in Europe, the Middle East, Africa and Asia-Pacific for the weather reason. The increase of sales of insecticides was primarily attributed to the price rise in Europe, Middle East and Africa, whilst the lower sale volume in Asia Pacific and North America was offset by the growth in Latin America.

BASF

In 2023, the sale of products of BASF Ag Solutions to third parties decreased by 3.32% compared to the previous year. Although product prices increased in almost all regions, the increase was unbale to fully cover the lower sale volume and the unfavorable currency impact. In Europe, in particular, the sharp price rise led to increased sales, but was impacted by decreased sales in Asia, South America, Africa and the Middle East, for the reasons of  currency depreciation and lower sale volume.

Corteva

In 2023, Corteva’s sales decreased by 8.52% compared to 2022. The declined sales was attributable to the strategic product exit, excessive inventory reduction, farmer’s purchase put off, reduced corn acreage in EMEA, reduced summer maize acreage in Brazil, the expected reduction of maize acreage and the exit from the Russia market, which were partially offset by the increased maize acreage in North America. The adverse currency impact was mainly from the Turkey lira, the Canada dollar and the Chinese yuan. The price increase was driven by the company’s continued implementation of its value pricing strategy, the strong demand for new technologies and the full response to the cost inflation. This part of increase was partially offset by the challenging market dynamics in Latin America and North America.

UPL

UPL ranked 5th on the top 20 list in the fiscal year 2020, holding the position for four consecutive years. However, on the 2023 list, its sales fell by about 22.57%. In the fiscal year 2024, as a result of the rapid decline in the prices of off-patent products and the sharp increase in the active ingredient production capacity in China, UPL was confronted by fierce price competition and high inventory challenges, which led to suspension of procurement activities. This is especially evident when the industry operation is slowing down, thereby new brands such as Feroce, Evolution and Shenzi witnessed sales growth of more than 70%, driving the increased sales of this product portfolio by 8% in the fiscal year 2024 reaching 35%.

ADAMA

ADAMA moved forward to the 6th place from the 7th in 2022, but sales fell by 11.04%. In 2023, sales declined in several regions of the world for various reasons. In Europe, Africa & the Middle East, sale volume and pricing were both under pressure due to the high inventories, extreme weather and the intensified market competition, despite higher sales in the United Kingdom. The North American market was affected by inflation and high interest rate, leading to weak demand, but specialized solutions showed signs of recovery. In Latin America, especially in Brazil, sales declined due to drought and inventory reduction, but the company could improve the quality of business operations through supply of differentiated products, leading to recovery of sales in other Latin American markets. In Asia Pacific, the Chinese market was faced with inventory reduction and pricing pressures, but the brand operation and active ingredient sales were recovered, whilst the Pacific and India markets were also affected by inventory and pricing pressures, although differentiated products performed well.

FMC

FMC dropped to the 7th place from the 6th in 2022. In 2023, North America was impacted by the inventory reduction which took place at growers and distributors, but the new product releases and positive adjustment in pricing strategies partly alleviated the impact of the decreased sales. The declined annual revenue in Latin America was attributable to the reduction of inventory, pressure on sales due to drought in Brazil, whilst the positive change in currency exchange and the launch of the Premio^® Star insecticide in Brazil in the 4th quarter contributed to the increased sales of brand products. Revenue in the EMEA decreased by 14% year on year, as impacted by the inventory reduction and adverse weather conditions, which were partially offset by the positive pricing action. Revenue declined in Asia, mainly due to the inventory reduction and the currency exchange fluctuation.

Sumitomo Chemical

Sumitomo Chemical stayed on the 8th place in 2023, with a decrease of  sales by 14.29% compared to the fiscal year 2022. In 2022 and thereafter, Sumitomo Chemical could gradually demonstrate the outcome of the acquisition in South America, despite the pressure due to the declined methionine market. In Brazil, the world’s largest soybean producing country, Sumitomo Chemical’s soybean fungicide EXCALIAMAXTM (containing novel active ingredient INDIFLINTM) has been granted registration and put on full sale on the market. In respect of the biological business, in addition to expanding the research center and the U.S. plant, Sumitomo Chemical established a new organization in the United States to begin sales on its own, thus strengthening the company’s capacity of manufacturing, marketing, research and development.

Nufarm

Nufarm maintained its 9th place on the 2023 ranking list, with a decrease of 5.97% compared to 2022. In Asia Pacific, revenue decreased by 7%, down to US$970 million, primarily due to the price fall of the basic active ingredients. Nevertheless, the adverse impact was partly offset by the satisfactory business performance in Indonesia. In North America, revenue decreased by 7%, down to US$1.3 billion, due to the change of customer’s buying habit, which was changed to ″buy in real time″ leading to decreased demand for basic products. In Europe, the revenue was US$857 million, down 4% year on year. In South Europe, despite the impact of drought and the phase-out of specific products, sales in key crop sectors remained robust.

Rainbow 

Rainbow progressed significantly  in the 2023 rank, ranking 10th, up one position over the previous year. However, despite the higher ranking, Rainbow’s revenues decreased by 20.57%, which might be related to the company’s high dependence on herbicide products, which accounted for 73.33% of its total revenue. Unfortunately, the herbicide market is facing the challenge of continued price fall, especially in the second half of the year, when the selling price decreased by 10.41% compared to the first half of the year, which further squeezed Rainbow’s operating revenue.

Yangnong Chemical

Yangnong Chemical ranked 11th on the 2023 chart, but the company’s revenue unfortunately experienced a sharp decrease by 27.45% compared to the fiscal year 2022. The decrease was mainly due to the price fall, which resulted in the lower operating revenue. Since the 4th quarter of 2022, the global pesticide market has been confronted by the high inventory risk leading to sharp drop of demand. Hence, the industry stepped into a stage of reduction of inventories. Coming into 2023, the prices of pesticide products continued the downward trend since the end of 2022. As such, the prices of most pesticide products continued to decline, which had a negative impact on Yangnong Chemical’s revenue.

Sino-Agri

Sino-Agri  sustained its 12th place on the 2023 list, same as the fiscal year 2022. However, the company’s revenue decreased by 10.94%, mainly due to the sharp price fall of pesticides. Although the continuous decline in the prices of active ingredients had certain impact on the operations of the company and the sales of pesticidal active ingredients declined, the sales of formulation products increased by 11.49% year on year. In addition, despite the decrease in overseas sales, the domestic business increased by 4.10%, demonstrating the company’s continuous  growth potential in the domestic market.

Lier Chemical

Lier Chemical was rising steadily on the 2023 chart, ranking 14th, up one place over the last year. However, despite the steady global demand for pesticides, the company’s revenue suffered a significant decline of 23%, attributable to the high-price inventory of upstream manufacturers and distributors as well as the serious problem of overcapacity at the supply side, which altogether led to a sharp price fall and the continuous postponement of procurement. Moreover, the obvious decline in the prices of pesticide products affected the overall development of the entire industry, resulting in a more intensified market competition.

Wynca

Wynca ranked 16th on the 2023 chart, dropping 2 places compared to 2022 while revenue fell sharply by 38.42%. The declined performance was mainly due to the impact of macroeconomic fluctuation and the changes in market supply and demand, which led to decline in both the price and the sale volume of glyphosate, which is the company’s main product. In 2023, the glyphosate market in the domestic market was in general moderately easy. In the first half of the year, due to the high inventory in overseas markets and the declined demand, which created an imbalance between supply and demand in the market, therefore the price in the domestic market continued to fall, leading to a wait-and-see attitude in the downstream market. However, in the second half of the year, as the overseas inventories were gradually decreasing, demand gradually picked up towards recovery.  Accordingly, the price started to fluctuate. 

Guangxin Agrochemical

Guangxin Agrochemical became listed for the first time on the 2023 top 20 list, though its revenue of  the year fell sharply by 35.8% compared to 2022. This decline was mainly due to the price fall of the company’s major products. During this reporting period, the global economic recovery fell short of expectations, extreme weather occurred frequently, geopolitical tension and great power competition continued, all of which led to insufficient market demand, overcapacity in the pesticide industry and the increased volatility in product prices. Specifically, downstream customers become more sensitive to prices while the seasonal characteristics of the pesticide industry become more evident. 

Nutrichem 

Nutrichem dropped down to 18th place on the 2023 chart, down 1 place compared to 2022, but with a significant drop of revenue by 28.35%. During the reporting period, the company’s revenue and cost of agrochemical products for trading as well as the overseas sales decreased significantly compared to the last year. The decrease was due to the excessive procurement at distribution channels in the early stage and the existence of high level of inventories, which resulted in downstream customer’s current digestion of the inventories built up in the early stage. So, new procurement decreased sharply, which led to continued depression of market. 

PI Industries

As newly listed on the 2023 top 20, PI Industries’ revenue in 2023 increased by 19.8% compared to 2022. The main reason lies on PI’s achievement of 19% annual growth of export of agrochemicals, thanks to the expansion of the existing product capacity and the launch of six new products, where new products commercialized in the last three years contributed 70% to the growth. Also, the newly acquired Pharma business generated around 6% growth to the increase of export. In addition, PI’s revenue in the biologics increased by approximately 35% year on year while the horticultural brand Jivagro strengthened the market position of the company. 

As the advancement and innovation in the global agrochemical industry are continuing, we believe that these companies can overcome the current difficulties to embrace a bright tomorrow. In the ever-changing global market, through technological innovation, collaboration, market expansion and sustainable development strategies, the prime companies are able to make continuous improvement of the competitive edge to make an important contribution to the sustainable development of the global agriculture. Looking ahead, global agrochemical companies are expected to continue innovation and collaboration to shape a greener, more efficient and sustainable agroecosystem. Going forward, we are anticipating that agrochemical companies are capable of making more breakthroughs and achievements to contribute to the global food security and environmental conservation. 

This article was originally published in AgroPages magazine 2024 Market Insight. Download to read more.