BAYER

Business Group Crop Protection Landwirtschaftszentrum Monheim D-51368 Leverkusen-Bayerwerk GERMANY
Tel: +49 217 338 3188 Fax: +49 217 338 3156
Head of Crop Protection: Dr Jochen C Wuff

COMPANY INFORMATION:
Bayer's agrochemical business began in 1892. Since 1996, the Bayer Corporation has operated within five business sectors, including the agriculture sector, which includes the crop protection and animal health businesses. The crop protection business group formed a new garden and professional care business unit during 1997. In 1998, it entered the US garden pesticide market through its joint venture with Pursell Industries (see below). Herbicides are the business groups smallest segment.

Bayer's main agrochemical research centres are situated in: Monheim (Germany), which also contains an Institute of Biotechnology; Yuki (Japan); and Kansas City (US). Its main production sites are at Dormagen and Kansas City (US). Other production sites are located in Brazil, India, Japan and Turkey. Bayer began constructing a new formulation plant for flufenacet and metribuzin in Kansas City in 1998. The plant is expected to come onstream in late 1999. In the mid-term, Bayer aims to move two or three new ais from the research stage into development each year and further to register two new active ingredients each year.

In early 2000 Bayer began the integration of the home and garden company, AA Huis & Tuin, which it acquired from AgrEvo Benelux at the end of 1999. Further expansion of Bayer's home and garden activities occurred in the UK in 2000, this was part of continuing general expansion in the European market. Bayer's UK marketing subsidiary, Pbi Home & Garden (acquired in 1999) took over the pesticide and fertiliser marketing activities and brand names of the UK company, Phostrogen (Corwan, Wales).

Bayer has bought the remaining shares (50.1%) in the South Korean joint venture, Misung (Pyongtaek), from its partner Aventis CropScience. Bayer acquired its original 49.9% stake in what was then the AgrEvo subsidiary, Misung Agrochemical in 1997. Misung formulates and markets agrochemicals and had sales of $67 million in 1999.

The company is to continue its "cautious approach" towards biotechnology in view of the risks and acceptance problems associated with it. Despite major research into this area, Bayer's objectives are not to create GMOs, but to apply the research in this area for the development of chemical pesticides.

Bayer's new $30 million herbicide formulation plant at its facilities in Kansas City, Missouri, US came on stream in mid-2000. The plant will formulate the dry flowable maize and soybean insecticides, Axiom (flufenacet 54.4% + metribuzin 13.6%), Domain (flufenacet 24% + metribuzin 36%), Epic (flufenacet 48% + Aventis's isoxaflutole 10%) and Sencor (metribuzin 75%).

Bayer is to spend $9,822 million on investment in maintenance of its facilities and research in Germany over the next three years, including $4,308 million on its agrochemical and pharmaceutical research centres in the state of North Rhine-Westphalia. Part of this programme is the construction of Bayer's new corporate headquarters in Leverkusen, Germany. Completion is expected by the end of 2001.

GENERAL BUSINESS NEWS:

• Annual sales for 1999 came to $2,316 million, up 6.5% compared with the previous year. Bayer claims to have increased its share of the global crop protection market by 10% from around 7.6% to 8.4%. Bayer's global agrochemical sales increased by 6.5% to $2,316 million [AGROW, 349, p5].
• Europe remained the main market for Bayer, although sales did increase in NAFTA markets by 3%. Latin American sales fell by 4% compared with 1998. In Japan, Bayers crop protection sales rose by 1% in 1999. Bayer's Japanese subsidiary, Bayer Ltd, expanded its shareholding in Nihon Bayer Agrochem to 99.5% at the end of 1999 [AGROW, 351, p6].
• Insecticide and fungicide sales remained stable, while sales in the garden/professional care sector rose by 2% compared with 1998. Herbicide sales fell by 3%. The herbicide flufenacet gained ground in the market and was launched in Hungary and Poland in 1999.
• The sales generated by new products in 1999 was $17 million, this is expected to rise to $666 million by 2005, with 25-30% of this figure coming from products not yet introduced [AGROW, 348, p25].
• In the first quarter of 2000, Bayer's agrochemical sales increased by 17% when compared to the same period in the previous year. This amounts to agrochemical sales of $788 million. The primary boost to agrochemical sales was the insecticide Confidor (imidacloprid) and the acquisition of Pbi Home & Garden. Operating profits amounted to $287 million, an increase of 9%, and return on sales was 26% [AGROW, 352, p5].
• Globally, Bayer currently has 17 ais in development, seven herbicides, five fungicides and five insecticides [AGROW, 348, p25].
• A range of new products are being developed for the UK market, seed treatments are a major component of this new group. This reflects the one-third share of Bayer's agrochemical turnover in the UK Forthcoming products include: a cereal seed treatment, an autumn cereal herbicide, an oilseed rape seed treatment, a fruit and vegetable fungicide, a sugar beet seed treatment, a fruit and vegetable insecticide, a new generation strobilurin fungicide, a new generation azole fungicide and a new generation potato blight fungicide [AGROW, 348, p25].

JOINT VENTURES:

• Burrill Agbio Capital Fund
  a venture capital fund established by the US merchant bank, Burrill & Co, with AgrEvo, Bayer and the financial services company, Transamerica Business Credit to provide capital for start-up biotechnology companies;
• Monsanto
  a joint venture called Twin Agro, to develop, manufacture and market a herbicide (JV 485, see W0065) discovered by Monsanto;
• Pursell Industries (US)
  Bayer holds a majority stake in the joint venture formed with this fertiliser company in 1998. The joint venture will first market Bayer's products during the 2000 season.

AGREEMENTS:

• ArQule
  three-year agrochemical and pharmaceutical screening agreement with US combinatorial chemistry company, ArQule, who will provide numerous compounds designed to Bayer's specifications;
• Paradigm Genetics Inc (US)
  Bayer will use Paradigm's high throughput Genomics implants to create the AGDB-BAYER database for the validation of new targets for crop protection research.

PRODUCTS IN WEEDPROJECTS:

FUTURE WEEDPROJECTS:
Bayer report that seven herbicides are in development including an autumn applied cereal product.