AgroPages-Syngenta Interview: John Atkin -Agricultural news

Global market changes bring growth opportunities Marie-Louise du Bois talks to Dr John Atkin, Chief Operating Officer - Syngenta Crop Science

Dr Atkins approach to dealing with the global agrochemical market displays a similarity to the way a farmer might plan his sowing both have sensibilities fine-tuned to discern seasonal vagaries and the fickleness of market trends, to arrive at optimum solutions that lead to a good harvest. "There are trends around the world right now that are positive," observes Dr Atkin when commenting on the industry that he works in. He explains that grain prices are at record highs and that Syngenta consequently sees the market for agriculture, and for its products, to be "very affected". "Estimates are that we are going to need 50% more food by 2030 thats a lot," he comments. Where others might see this as a problem, Dr Atkin sees the scenario as opening up new growth opportunities.

"I dont know if the agrochemical market will be as strong as 2007, but we [Syngenta] think that it will continue to grow," says Dr Atkin about the ensuing business possibilities. He has years of experience in the crop protection business to base his predictions on. Dr Atkin handled various responsibilities at Novartis before taking over as its CEO. After Novartis merged its agrochemical business with Zeneca to form Syngenta, Dr Atkin took over as the chief operating officer of the new corporate giant.

Demand for food, feed and biofuels, contrasted with limited land and adverse climatic factors are behind a "worldwide productivity drive" that Syngenta sees as central to its growth. Recently, the company pointed to a supply and demand imbalance in the agricultural market, due to stocks remaining low and crop prices reaching record levels, and it plans to capitalise on this trend.

Geographic strategies
The company has indicated a strong awareness of "rapid emerging market growth". Dr Atkin cites predicted Syngenta growth areas as South America, particularly Brazil and Argentina; Asia (India and China); central Europe (Hungary and the Czech Republic) and eastern Europe (Russia and Ukraine).

He describes the growth opportunities for Syngenta in Russia and Ukraine as "remarkable". In these two countries, only 12% of the agricultural land is intensively farmed, while farmers have historically used basic agronomic inputs. "If you use good products, apply them at the right time, and do the things we do in the west, you can double the yield in one year," Dr Atkin claims. "We think that with the high grain prices, the potential for expansion in eastern Europe, particularly Russia and the Ukraine, is very strong", he concludes. He expects about 70 new product launches in eastern Europe annually.

Asia, as a growth area, brings different challenges with a similar focus on increasing yield. Dr Atkin cites a large population, growing food consumption, and concerns over rising food costs as critical factors that drive the Asian market. He says that farms are very small in China, unlike in Russia which has extensive enterprises. "But the Chinese have a huge need to increase their productivity," he says. "Thats the main thing essential to their thought," and also to Syngentas plans to expand in the area. The same applies to the Indian market, "so we see growth potential there", he says. "The whole south-eastern Asian region - can be and will be a growing opportunity," Dr Atkin concludes.

South America continues to be one of Syngentas main markets. Brazil, which is the companys second largest selling market worldwide, showed sales growth of 40% in 2007, Dr Atkin points out. "Brazilian farmers, more than any others, are responding to the demand for more agricultural produce and food, and thats such an important point for achieving growth in the region," he says,. "They [Brazilian farmers] are continuing to invest in soybeans, maize and sugar cane, particularly for biofuels, and we are very much part of that," Dr Atkin adds.

He dismisses the possibility that Syngenta might scale back Brazilian operations, following a difficult year for the company in the country. Protestors seized Syngenta facilities and two people died in the clash, while a federal judge ruled Syngentas field trials on genetically modified crops to be illegal. However, despite the obstacles, Dr Atkin rates Brazil as "very, very important for us".

In the North American market, the demand trends of biofuels and rising agricultural output and consumption also drive Syngentas growth strategy. The company identifies "dynamic market shifts" as key for growth: farmers move from soybeans to maize plantings as well as to triple-stack trait GM maize lines. In response to these trends, the company has said that it will "redesign" its US maize product range, following the launch of the first corn rootworm-resistant Agrisure RW maize lines last year. The company plans "accelerated trait delivery" for its triple-stack GM maize. It is aiming to make triple-stack hybrids account for 85% of its portfolio by 2011.

challenges
While Dr Atkin is confident about the growth of Syngentas business and product expansion in different regions of the world, he concedes that the prospect faces certain challenges. "What am I concerned about? Regulations, counterfeit products, and about how the weather is going to be," Dr Atkin says.

The regulatory system in some established markets is a cause for concern to the company. "I think that we are, and have been, concerned about the direction of the regulatory system, particularly in Europe," Dr Atkin adds. The company has had few new registrations in western Europe in the past year, with a few exceptions,. The company recently introduced its seed treatment insecticide, Cruiser (thiamethoxam), in France, amid protest from bee farmers. It also launched two cereal herbicides, Axial (pinoxaden + cloquintocet-mexyl safener) and Traxos (pinoxaden + clodinafop-propargyl + cloquintocet-mexyl), in Italy last month. "We are in the middle of a portfolio transition in western Europe," he says, adding that the company is anxious about the review of the EU agrochemical registration Directive (91/414). "We are concerned that policy makers may lose sight of the importance of having all powerful technology available."

Illegal products, especially in emerging markets where Syngenta seeks to grow, are another problem. "Counterfeit products are something that concerns us, they really do," says Dr Atkin. He says that Syngenta has its "own initiatives", as well as a collaboration with the European Crop Protection Association, to "eliminate" the problem of counterfeits. Dr Atkin points out that the sale or use of fake products harms all stakeholders, including companies and farmers. He cites an estimated 5-10% loss of the market to counterfeit products, with it being "much more" of a problem in eastern Europe. He affirms that the industry and authorities are taking action against the growing problem, noting Ukraines recent success in seizing illegal products. "The next question will be what they [the authorities] do with the stuff when theyve got it."

Despite these concerns, Dr Atkin maintains a positive approach to arising difficulties in the market that Syngenta serves, as his approach to growing resistance demonstrates. "Resistance is actually quite healthy for our market, because we have to innovate," Dr Atkin argues. He says that the company spends 10% of its sales, totalling $7,285 million in 2007, on research and development. Managing resistance, or other challenges, can create new markets for Syngenta, he argues. "It is something that is a problem for the farmer, whereas that [solving such problems] is our raison detre. Were here to help him deal with it."

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