The mergers and collaborations of international pesticide companies began in the 1990s. In 1992, Imperial Chemical Industries (ICI) of the UK, due to market weakness in traditional products such as gunpowder, fertilizers, paints, and dyes, faced an unfavorable stock situation. However, seeing the profitability in pharmaceuticals and pesticides, ICI established Zeneca to raise more funds. In 1994, the pesticide divisions of Hoechst AG of Germany, Schering AG, and Rhône-Poulenc merged to form Aventis CropScience, becoming the fourth-largest pesticide company. In 1995, Ciba-Geigy and Sandoz, ranked first and ninth in the world at that time, merged to form Novartis. In December 1998, Aventis CropScience announced a merger with Rhône-Poulenc Agro to form Sanofi-Aventis, surpassing Novartis in sales. Meanwhile, Dow Chemical's research department merged with Eli Lilly to form Dow AgroSciences, and Monsanto acquired 51% of the shares of Australia's Weedbug herbicide company. Additionally, Monsanto acquired Cargill's international seed business and Unilever's Cambridge Breeding Company.
First, among the three major types of pesticides, the fungicide market is growing rapidly, insecticide demand is decreasing, and herbicides remain a focus for development.
In fungicides, due to adjustments in global crop planting structures and expansions in economic crop varieties and areas, there is an increased demand for fungicides. Moreover, pathogens causing crop diseases easily develop resistance, necessitating new fungicide products.
In insecticides, because their development and promotion started early, the market has become saturated. Insecticides also cause significant ecological damage, leading to bans on some products, reducing demand. Furthermore, the successful development of genetically modified pest-resistant crops has affected insecticide demand.
Second, biopesticides are gradually becoming the direction for pesticide development. Chemical pesticides not only pollute the environment but also easily cause pest resistance and kill beneficial natural enemies, severely disrupting ecological balance. Biopesticides, which are safe, non-toxic, and environmentally friendly, have gained attention. Their use can reduce environmental pollution and achieve both symptomatic and root cause treatment in pest control. They have received high regard from domestic and international pesticide industries, with increasing exports to Japan, indicating a bright future for China's pesticide market.
Third, R&D costs are rising rapidly. Due to the difficulty and long duration of developing new pesticide products, costs naturally increase. According to reports by China Investment Consulting, foreign companies spend about 10% of their annual sales revenue on R&D. For instance, Syngenta had a sales revenue of $6.6 billion in 2003 and spent $700 million on R&D, accounting for 10.61%. Bayer and DuPont also invest over 10% of their sales in R&D. Currently, developing a new pesticide compound takes 7-10 years and requires investments exceeding $80 million-$100 million, a 4-5 times increase compared to the 1970s.
Fourth, the difficulty of developing new products is increasing. Since the late 1990s, due to heightened environmental awareness, newly developed products must comply with biological rationality and environmental compatibility principles. Additionally, they must offer better cost-performance than mature commercialized products. With increasingly stringent environmental and registration requirements, the development of effective and safe new pesticide products becomes more challenging. According to China Investment Consulting, since the 1950s, the success rate of new pesticide development has sharply declined. For example, in the 1950s it was 1/1800, in the 1960s 1/13000, in the 1970s 1/12000, in the 1980s 1/20000, entering the 1990s 1/30000, and by 1996 it dropped to 1/80000.
In herbicides, although demand growth is moderate, herbicides remain the focus of new pesticide research and development by large pesticide companies. According to China Investment Consulting, out of 49 new pesticide varieties developed by 21 main pesticide companies in recent years, 25 were herbicides, 2 were herbicide safeners, together accounting for 55.1% of all new varieties.
Fifth, mergers and collaborations among pesticide companies are intensifying, gradually forming monopolistic situations. In recent years, due to intensified market competition and declining industry profits, combined with high R&D costs and risks, small and medium-sized companies have largely abandoned new product development. Large companies, aiming to expand market share and reduce sales costs, have begun mergers or collaborations. As corporate conglomerates merge faster, post-merger companies gain stronger competitive capabilities, with increasing exports to Japan, indicating a bright future for China's pesticide market. Over many years, a few comprehensive multinational corporations have formed a monopolistic situation internationally.
With the impact of pesticide residues and soil environmental pollution caused by the extensive use of chemical pesticides, people are increasingly focusing on environmental protection in pest control, putting greater environmental pressure on the pesticide industry. Chang Yi Zhi, a researcher in the chemical industry at China Investment Consulting, pointed out that under these influences, the international pesticide product market mainly presents the following features.