Tough times ahead for Aventis CropScience

Ananth Iyer
10 March 2000

We may soon witness another spate of mergers in the agrochemical business, says Jan Stranges, member of the executive committee, crop protection business line, Aventis CropScience. "Almost all top agrochemical companies are talking to each other and we could very soon see consolidation in the agrochemical business."

Consider this. Monsanto has announced that it expects to complete the sale of agrochemicals division months ahead of the schedule to focus on biotechnology and pharmaceutical sectors. The agrochemical division has reportedly attracted a lot of interest from big players such as BASF, Bayer, Dow Chemical, and DuPont.

There are other problems too. In the lucrative US crop protection market, Aventis CropScience is ranked fourth. "This is a concern for us and we plan to address this by introducing corn herbicide products", says Mr Stranges.

Similarly, in Europe, the company is lacking in the fungicide business, while it has a low profitability/high risk coverage in Africa and The Middle East.

Though the company has offered cost savings worth $350 million of which $200 million will be saved this year, shareholders are not comfortable with the idea of a pharmaceutical company managing the agro business.

Aventis CropScience plans to tackle this by adapting a strategy combining short-term and long-term business prospects.