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7th Beyond-Agriculture Seminar, CAC Shanghai, March 2016
How to enter the World Biocide market
如何布局全球非农用消杀市场
Rob Fryatt
Xenex Associates
Expand new areas, Seize new opportunities
ROB FRYATT
Pest Management Mosquito Abatement
Turf & Ornamentals Consumer Pest Control
•Qualified Agronomist with over 20 years international Crop Agrochemical Experience
•Commercial Director of Sorex, a leading and dedicated formulating and distribution company in a defined Beyond-Agriculture sector: Pest Management
•Director of Xenex Associates the leading International Commercial Business consultants to Beyond-Agriculture markets.
•A Client base of Western and Chinese companies that includes many companies
seeking to access The World Biocide Market – the Market called Beyond-Agriculture
BEYOND-AGRICULTURE IN CHINA
PRESENTATION STRUCTURE
Compare and contrast Market Structure in
Agriculture and Beyond-Agriculture
How to understand the differences to assist
building a presence in the World Biocide market:
Products
Channel to Market
Establishing the Partnerships
Personal Views on the opportunities for Chinese
companies
Use Europe as an example where
regulatory challenges are probably the greatest.
COMPARE & CONTRAST THE MARKETS
Size
Structure
Channel
Formulations
Regulatory
Agricultu
re
EUROPE CROP CHEMICAL MARKET
US$ 17.3 Billion (End User level)
Agricultu
re
25% of the global market
11 countries account for 80%
The top 4 account for 50%
The Top 6 are > $US 1.0 billion !
The next 4 are all >US $ 0.5 billion
Source: GfK
EUROPE - BEYOND-AGRICULTURE
MARKET
Total market = $US3.9 Billion at end-user level
Forestry
2%
Industrial
3%
Ornamentals
17% Urban Pest
Control
10%
Public
Health
3%
Consumer
49%
Timber
Treatment
11%
Turf
5%
Source: GfK
B
EUROPE MARKET SIZE
US$ 17.3 Bn
Global Market = 25%
Top 5 Countries= 58%
Territory Size =
1.2 - 3.1 Bn.
Agricultu
re
US$ 3.9 Bn
Global Market = 16%
Top 5 Countries= 67%
Territory Size =
0.3 - 0.9 Bn.
MARKET STRUCTURE
CROP BASED
SAME CHANNEL
MARKETS ARE NATIONAL
CROP PURCHASE
RURAL MARKET
Agricultu
re
SEGMENT BASED
DISTINCT CHANNELS
MANY MARKETS ARE
INTERNATIONAL
SERVICE PURCHASE
URBAN MARKET
MARKET CHANNEL
MANUFACTURER
DISTRIBUTOR
FARMER
Agricultu
re
MANUFACTURER
[FORMULATOR]
DISTRIBUTOR
SERVICE
COMPANY
RETAILER
CONSUMER
FORMULATIONS
DELIVERING A PRESSURIZED
LIQUID APPLIED THROUGH A
SPRAYER
SOME GRANULE
APPLICATION
INCREASING SEED
TREATMENT
Agricultu
re
DIFFERENTIATED
FORMULATIONS
TARGETTED TO
SPECIFIC USE &
PEST HABITAT
FORMULATIONS
Agricultu
re
REGULATORY
PLANT PROTECTION
DIRECTIVE
EC Directorates
Agriculture
Environment
Agricultu
re
BIOCIDAL PRODUCTS
REGULATION
EC Directorates
Sanco (Heath)
Environment
DEVELOPING A PATHWAY
Understanding
the Segments
Identifying the
Opportunities
Establishing the
Partnerships
EUROPE - BEYOND-AGRICULTURE
MARKET
Total market = $US3.9 Billion at end-user level
Forestry
2%
Industrial
3%
Ornamentals
17% Urban Pest
Control
10%
Public
Health
3%
Consumer
49%
Timber
Treatment
11%
Turf
5%
Source: GfK
B
UNDERSTANDING THE SEGMENTS
•Unlike Agriculture each market segment can have a different
Channel to market (distributors, end users)
Product use pattern (annual treatment, regular treatment)
Different value added (Service & Consumer markets)
Formulation and Brand (turf & pest control)
•There is a need to understand the available segments
Pest Management - significant and diverse
Turf Management – small but high value
Consumer – large, but “downstream value”
Ornamentals – Significant, but only in a few countries
UNDERSTANDING THE SEGMENTS
•There is a need to match active ingredients to segment
Insecticide driven -Consumer and Pest Management
Fungicides - Turf, Ornamentals and Timber
Limited Herbicide markets
Significant Rodenticide market in Pest Management
•Segment Dynamic is important
Consumer and Timber Static – Environmental Influence
Pest Management Growth – Heath & Hygiene
Turf, Ornamentals Growth – Lifestyle
Public Heath Static – but significant potential Growth
UNDERSTANDING THE SEGMENTS
•There can be overlap between channels to market
Between Pest Management and Public Health
Between Turf and Ornamentals
Pest Management Formulators often toll for Consumer
•Each Segment has specialist suppliers and users
Active ingredients may be the same
Formulations may be different
Brands will be different
Example: Pest Management……….
PRODUCTS
Active Ingredients
Formulations
Brands
• Fipronil
• Imadacloprid
• Permethrin
• Diflubenzuron
• Hexaflumuron
• Bromadialone
• Emulsion Concentrate
• Suspension concentrate
• Microcapsule
• Gel
• Pasta Bait
• Granular Bait
• Gaucho
• Regent
• Karate
• Premise/Maxforce
• Termidor/Goliath
• Demand
CHANNEL TO MARKET
Manufacturers
Formulators
Distributors
Service Companies
• Syngenta
• Bayer
• BASF
• Liphatech
• Ensystex
• Babolna Bio
• Bayer
• BASF
• Syngenta
• Pelgar International
• I.N.D.I.A.
• Frowein
• Edialux
• Sanitrade
• Killgerm
• Techmo Hygiene
• Anticimex
• Rentokil-Initial
IDENTIFYING THE OPPORTUNITIES
•Match your active ingredient portfolio to the market segments
•Understand the segment dynamics and the value of the
opportunity
•Understand the regulatory position or potential regulatory
opportunity for those active ingredients
•Establish the regulatory costs for both active and formulation
•Understand the competing product ranges of the formulators
and distributors
•Decide if your strategy is single product or a product range
•Identify the potential partners……..,.
ESTABLISHING THE PARTNERSHIPS
•Independent Advice is both available and invaluable
•Building partnerships across cultures requires many skills
European companies need to better understand what
long term partnership means
Asian companies need to look for partners willing to
understand the differences that working with the Asian
culture brings
ESTABLISHING THE PARTNERSHIPS
•European companies can contribute the following skills:
Market understanding
An established customer base
The ability to operate in the national culture (Europe is diverse!)
•Asian companies contribute access to products that may be
in demand but not easily accessible
•Innovation and the promise of innovation is always welcomed
OPPORTUNITIES FOR
CHINESE COMPANIES
• Consumers and Professionals always seek out new products
and key active ingredients have been lost to the market.
• The global R&D companies have captured only 5-10% of the
added value through their brands
• There is significant value added market from formulation,
packaging & brands
• Potential cost advantage for Chinese companies
• Realizing market potential comes from Downstream
Investment in Distribution, Partnerships or Ownership
LONG TERM Consumers and Professionals increasingly value products and
services in these markets as margins and return on investment
continue to grow in real terms
7th Beyond-Agriculture Seminar, CAC Shanghai, March 2016
How to enter the World Biocide market
如何布局全球非农用消杀市场
Rob Fryatt
Xenex Associates
Expand new areas, Seize new opportunities
THANK YOU THANK YOU