Industry Overview

Phillips McDougall AgriService

Industry Overview 2012 Market

The AgriServices Overview Section presents our most recent analysis of the performance of the global crop protection and plant biotechnology markets in 2012. Within the report we include information on the recent performance and outlook for the global market, detailed analysis of crop, product and market sectors as well as key data regarding company performance. All sales information is presented at the distributor level, with currency conversions performed using average year exchange rates.

Industry Overview

Industry Overview

Industry Overview Contents

Industry Growth in 2012 Historical Industry Growth Major Agrochemical Acquisitions and Mergers Since 2008 Crop Protection Industry Structure 2012 Key Product Acquisitions 2009 to Present Sales Growth of the Leading Companies 2012 Leading Companies Ranked on Five Year Sales Growth Leading Crop Protection and Seed & Trait Companies Product Sector Analysis GM Crop Areas 2002-2012 Crop Sector Analysis Major Crop Global Planted Areas Non Crop Agrochemical Market Regional Market Analysis NAFTA Latin America Asia Europe Middle East Africa World Market

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Industry Overview Industry Growth in 2012 The global market for conventional crop protection products (excluding sales of herbicide tolerant and insect resistant seed) is estimated to have increased by 6.4% to reach $47,360 million during 2012. This figure is based on the results of our own market analysis of the crop protection sector and takes into account the results of market research conducted in the majority of country markets. When the impact of trade-weighted inflation and currency factors are taken into account then the change in the overall market in real terms equates to an increase of 8.9% over 2011. Conventional Crop Protection Market (Distributor Level) 2007/2012
2007 World Crop Protection Market ($m.) Nominal change on previous year (%) Real change on previous year (%) 33,390 2008 40,475 2009 37,860 2010 38,315 2011 44,528 2012 47,360

+9.7

+21.2

-6.5

+1.2

+16.2

+6.4

+2.8

+10.2

-1.5

+0.2

+7.1

+8.9

The above table refers to the value of the market for chemical crop protection products, based on the sales of agrochemical products for crop use, including forestry and plantation crops. It does not, however, include agrochemical product sales in non-crop situations and markets which comprise the following sectors: turf, nursery and ornamentals, home & garden, PCO (pest control operators), rodenticides, wood preservatives, materials preservation, stored grains, public health, post-harvest protectants and industrial outlets. In 2012 the overall value of the agrochemical market for the use of products in the non-crop sector is estimated to have grown by 1.3% to $6,372 million. Agrochemical Markets in 2012 (Distributor level - $m.)
Sales ($m.) Conventional crop protection Non-crop agrochemical market Total 2011 44,528 6,290 50,818 %Change 2012/2011 +6.4 +1.3 +5.7 2012 47,360 6,372 53,732

Sales of conventional agrochemical products used in crop protection experienced growth of 6.4% to $47,360 million, whilst sales of herbicide tolerant (HT) and insect resistant (IR) seed into the crop protection sector again increased significantly in 2012. Overall the value of the agricultural biotechnology market is estimated to have grown by 17.9% in 2012 to reach $18,495 million.

Industry Overview Growth within the crop protection sector is directly linked to support for agriculture, crop commodity prices and farm incomes, however the non-crop sector is influenced more by the economic position of the major markets with consumer purchasing being a significant factor. Growth within the GM seed market is predominantly driven by the introduction of new technology with competition within the sector now intensifying as the number of available trait offerings continues to grow. Due to increases in the values of both the conventional crop protection market and the input trait sector, the value of the overall crop protection sector in 2012 is estimated to have increased by 9.4% to $65,855 million. Crop Protection Market Value 2007-2012 (Distributor level- $m.)
Sales ($m.) 2007 2008 40,475 9,150 49,625 2009 37,860 10,570 48,430 2010 38,315 12,870 51,185 2011 44,528 15,685 60,213 2012 47,360 18,495 65,855

Conventional crop protection 33,390 GM Seed Total 7,062 40,452

During the period from 1980 to 1998 the value of the agrochemical market had been gradually increasing, however the advent of GM crops resulted in the agrochemical market value declining from a peak in 1998 to a new low in 2006. Since then the agrochemical market value has increased significantly albeit in a relatively volatile manner, reflecting improved crop prices. During 2008 the agrochemical market experienced its most significant increase since the mid-1970s to reach an all-time high. This spike was followed by a number of negative factors, the most notable of which was a major reduction in the price of glyphosate contributing to a market decline in 2009. In 2010 the market recorded weak growth, followed by a much stronger situation in 2011 as the effects of greater stability in glyphosate prices, modest increases in overall agrochemical prices and volume growth driven by high crop prices were felt. Key Factors Impacting Global Crop Protection Market Performance in 2012: Crop prices initially reduced from the 2011 levels but then improved and sustained at high level Rising demand for crop commodities Biofuel demand maturing in USA Improved glyphosate prices Increased GM areas, however increased competition in trait supply Strong farm economies in the Americas, Europe and Asia

Industry Overview Key Regional Factors Affecting Crop Protection Market Performance During 2012 Latin America o Weakening Brazilian Real o Improved crop prices in Brazil o 2012/13 drought in NE Brazil affecting sugarcane production o GMO uptake throughout the region o Increased soybean area in Brazil and Argentina Europe o Sustained cereal and rape prices o Expansion of EU-15 grain area creating demand for rapeseed o Hard winter results in winter kill of crops in Russia and Ukraine, followed by dry summer o Wet summer in Northern Europe, dry in South and East NAFTA o High corn, soybean, and rice prices o Drought affecting the central corn belt o Improved water availability in Southern USA over 2011 situation o Continuing stability in glyphosate prices o End of ethanol subsidy o Adverse 2011 weather results in shortage of premium maize seed o Canada affected by spring floods in 2011, recovery in 2012 o Better rainfall in Mexico than in 2011 Asia o Strong rice price o Sustained food demand in developing economies o Increasing grain demand in China and South East Asia o Recovery from adverse weather in Australia, China, Thailand and Japan in 2011 o India held back by another variable monsoon season

Industry Overview Historical Industry Growth The following figure outlines the relative change in real terms in the value of the conventional crop protection market in the period from 1980 to 2012 Conventional Crop Protection Market Value - Constant 2012 Dollars
Demand for crop commodities Biofuel demand Latin American growth Improving glyphosate prices GM crops

$ m.
50000 48000 46000 44000 42000 40000 38000 36000 34000 32000 30000

US Payment in Kind Programme

EU CAP reform

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In the period from 1980 until 1998 the value of the global crop protection market essentially grew year on year, the main exemptions to this trend being the downturns in both 1983 and 1991-1993. These reductions arose from changes in governmental support for agriculture in one of the main markets, namely the implementation of the payment in kind scheme in the USA (1983) and the introduction of set-aside in the EU following CAP reform (1991-1993). Following the initial introduction of GM crops in 1996, the market experienced a period of decline in real terms between 1998 and 2006. This reflected the increase in uptake of GM technology, particularly in North America and Latin America where a rapid switch to crop varieties containing traits conferring glyphosate tolerance and insect resistance led to declines in selective herbicide and insecticide applications in cotton, canola, soybean and maize. In addition to the impact of GM technology, crop prices in the same period had been relatively flat, which had a depressing effect on the overall demand for agrochemical products. However in 2007 crop prices began to grow, and in 2008 spiked at a very high level, subsequently creating a major improvement in the agriculture economy. In 2009, crop prices fell back from their peak as the global economy experienced a severe down turn following the banking crisis in Europe and the Americas. This, coupled with a major reduction in glyphosate prices following increased supply from Chinese companies, resulted in the overall value of the global crop protection market declining. During 2010 glyphosate prices remained low, and with improving crop prices the agrochemical market was more or less unchanged in real terms. In the early part of 2011 commodity prices increased, led by gains in wheat following the impacts of drought on the Russian harvest and flooding in Canada during 2010. Although glyphosate prices remained stable, significantly higher crop prices resulted in a buoyant agricultural economy and a significant rise in agrochemical demand in 2011.

2012

Industry Overview This trend of improved crop prices continued into 2012 creating a situation of strong growth during the year, resulting in an 8.9% increase in real terms over the previous year. The table below outlines the real and nominal growth rates for the conventional crop protection market value by decade. Growth of the Conventional Crop Protection Market
% Per Annum Period 1970-1979 1980-1989 1990-1999 2000-2012 Real terms +6.8 +2.2 +0.1 +0.8 Nominal +14.2 +5.3 +1.9 +5.5

During the period 1990 to 1999 the global agrochemical market, in real terms, grew only slightly however in the period from 2000-2006, real growth was negative resulting in a market decline. Much of this decline can be attributed to sustained low crop prices as well as the impact of GM crops on conventional agrochemical use. Since 2006, real growth of the crop protection market, aided by significantly improved crop prices, has been more positive. Each year during this period, with the exception of 2009, has seen a rise in the value of the crop protection market in real terms. Real Growth of the Crop Protection Market 1990 to 2012
Real Growth (%)
12.0
10.2

10.0 8.0 6.0

4.3

8.9 7.1

4.7 3.7 2.8 2.1

0.1

4.0
2.2

2.0
0.2

0.0
-0.5 -0.5 -1.6 -3.0 -5.0 -5.7 -6.8
-6.5

-2.0
-4.0

-1.0

-1.6 -2.5

-1.5

-6.0 -8.0

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Industry Overview Amongst the largest key factors influencing the global agrochemical market has been increased crop commodity prices. The rise in crop prices has however taken place in a non-linear or volatile pattern reflecting the impact of weather on crop production in some years, increased import demand for grain and use of crops for biofuel, all of which have impacted grain supply and demand. This has led to grain and oilseed crop stocks remaining relatively stable against a background of higher production and increased demand. In turn this has led to spikes in the price of many crop commodities. Up until 2006, commodity prices had followed a relatively stable pattern, however during 2007 prices began to rise, with a spike in 2008 resulting in high market growth in that year. Although prices experienced declines in 2009, they remained at a level above that of the prevailing levels prior to 2007. In more recent years, between 2010 and up to the end of 2012 prices have again begun to increase, resulting in higher volume demand for agrochemicals. In addition to crop commodity price, another major contributory factor within the last three years has been the significant alteration in global glyphosate prices, beginning in 2009 when increased production and exports from China led to a global oversupply and subsequent rapid drop in value. Glyphosate price remained low throughout 2010 and 2011 and has only recently shown signs of improvement within the last year. Other contributing factors that have influenced the global agrochemical market have included the strength of the farm economy in Latin America, particularly in Brazil and to a lesser extent Argentina, as well as the increasing use of crops for biofuel. GM technology continues to have a growing influence on the market, taking value out of the high value selective market into nonselective herbicides.

Industry Overview Mergers and Acquisitions Since 2008 The following table lists the key company transactions in the industry since 2008. Major Agrochemical Acquisitions and Mergers 2008-2012
Acquirer Nufarm Sumitomo Chemical United Phosphorus Agrium Arysta Sipcam Sipcam MAI BASF Cheminova Syngenta Cheminova MAI Agriphar Arysta ChemChina MAI MAI Sumitomo Chemical Sumitomo Chemical United Phosphorus Willowood Arysta Arysta ChemChina Coromandel Gowan Idemitsu Kosan Isagro Sipcam Sumitomo Chemical Sumitomo Corporation Syngenta United Phosphorus United Phosphorus Agro Kanesho Albaugh Arysta LifeScience IQV Monsanto SDS Biotech United Phosphorus Year 2008 2008 2008 2008 2008 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2012 2012 2012 2012 2012 2012 2012 Business Purchased or Merged AH Marks and Etigra Outstanding 40% stake in Sumika-Takeda Evofarms, a Colombian company UAP Remaining 50% in Callietha Investments Advan, Maryland, USA Remaining 50% in Vischim (Italy) 90% of Rokita Agro (Poland) and Magan Yu (Serbia) Sorex Holdings (UK) 75% stake in Stahler Circle One Global Remaining shares of Cheminova-Magyarorszag Bold Formulators Geopharm (Greece) and Terranalisi (Italy) Assets of South African agribusiness Afgri Announced intention to acquire majority holding in MAI Mexican company Ingenieria Industrial (known as BravoAg) 51% holding in Korean company JK Inc. 20% stake in Nufarm Indian agrochemical company New Chemi U.S.-based rice agrochemical supplier RiceCo Indian agrochemical company Shreeji Pesticides Majority holding in Russian agrochemical distributor FES Group Majority holding in Indian company Devidayal Sales Limited 60% stake in Makhteshim Agan. Majority stake in Sabero Organics Majority share in Chile crop protection company Agro Technology 69.67% of the Japanese company SDS Biotech 100% stake in the Colombian distribution company Barpen Isagro Sipcam Internationals 75% holding in the Argentinean company AgroMax Isagro's 50% stake in the distribution company Isagro Italia 90% stake in the Romanian company Alcedo SRL Agricultural distribution company Agrosan, based in Paraguay Isagro's 50% share in Sipcam Isagro Brazil 51% stake in DVA Group's Brazilian company DVA Agro Brazil Bayers Yuki Research Centre The Canadian distribution business AgWest Group Indian company Devidayal Sales Limited (DSL) 25% stake in IQV Agro Spain held by Sumitomo Corporation Planting technology developer Precision Planting 65% stake in the Indian company Sree Ramcides The Dutch agrochemical company Agrichem

Industry Overview As a result of the various mergers and acquisitions that have taken place historically, the agrochemical sector is now relatively highly consolidated. To date the two most significant M&A events that have occurred in the modern agrochemical market was the formation of Syngenta and the acquisition of the Aventis Crop Protection business by Bayer which resulted in the formation of the two industry leaders whose market share is in excess of 15% each. The second tier of the agrochemical market, with market shares between 415%, includes the other main R&D driven multinational companies, as well as both Nufarm and MAI. Nufarm and MAI have significantly enhanced their relative position within the agrochemical industry through organic growth involving geographic expansion and new product development as well as through a relatively active acquisition program involving both companies and products. The third tier (2 - 4% market share) has included FMC and Sumitomo Chemical for a number of years, however more recently a number of companies have joined this tier, predominantly as a result of mergers and acquisitions. These companies include Arysta, formed in 2001 by the merger of Tomen and Nichimen, and also Cheminova and United Phosphorus. These latter companies have in recent years also significantly enhanced their product portfolios and distribution capability through a strategy of targeted acquisitions. Agrochemical Industry Structure 2012*
Market Share >15% Europe Bayer Syngenta 15% - 4% BASF 4% - 2.0% Cheminova 2.0% - 0.8% Sipcam Oxon <0.8% Isagro Helm Phyteurop Gowan Amvac Hokko Agro Kanesho SDS Biotech Otsuka Nippon Kayaku Kyoyu Agri Rotam Rallis Sinon Excel Wynka Red Sun Gharda

USA

Dow Monsanto DuPont

FMC

Chemtura Albaugh Ishihara Nihon Nohyaku Nippon Soda Nissan Mitsui Chemicals Kumiai

Japan

Sumitomo Arysta

Other

MAI Nufarm

Utd Phosphorus

Sinochem

* Ranked by Headquarter Location and Global Market Share

Industry Overview Consolidation has also occurred within the Japanese agrochemicals sector, with companies such as Shionogi, Takeda, Mitsubishi Chemical and Ube no longer having independent agrochemical businesses and Sankyo Agro now part of Mitsui Chemicals. Even with this consolidation there are still a significant number of domestically based companies that are active in the Japanese agrochemical industry. Several other Asian countries such as Korea, Taiwan, and India also have a locally based industry, however in value terms, companies in these countries are generally much smaller than their Japanese counterparts. There are a large number of agrochemical companies in China, although few of significant size, the largest being listed in the previous table. The ranking outlined in the table above is comprised of the main manufacturing organisations and does not include those that are primarily focussed on product distribution. However within this latter category there are several companies with significant sales revenues, notably companies such as Agrium, Helena, Growmark, Wilbur-Ellis and Winfield in the USA and the leading Japanese trading companies, Mitsui & Co., Sumitomo Corporation and Marubeni Corporation. Several of the medium sized agrochemical companies have strengthened their position in the agrochemical industry through a series of strategic initiatives. While many of these moves have involved the acquisition of agrochemical companies, often with the aim of gaining additional distribution capability or regional marketing exposure, an increasing number of M&A transactions have been targeted at strengthening the respective product portfolios of the purchasing company through the acquisition of a particular agrochemical product or product range. Although product acquisition has always been a feature of the agrochemical industry, the last ten years has seen the overall level of this type of M&A activity increasing significantly. The key reasons as to why product acquisitions are more common than they were in the past include: Consolidation amongst the industry majors has resulted in competition regulators requiring that product lines be divested in order to satisfy market share concerns. This is an increasingly important factor in what is now a relatively consolidated industry. Several companies have pursued a strategy of streamlining their product portfolio and focussing only on those products considered to offer market potential. As a result products considered non-core to the on-going business have been divested. The re-registration system operating in both the EU and the USA has led to some companies deciding that it is not viable to support a particular product during the regulatory review. This has resulted in a number of agrochemical companies deciding to divest certain products.

For several of the medium sized companies, notably Arysta, MAI, Nufarm, Cheminova and United Phosphorus, product and company acquisitions have become a key feature of their strategy to advance not only their relative position within the agrochemical industry, but also to provide the company with a proprietary product range.

Industry Overview The table below outlines the key product acquisitions within the global agrochemical market since 2009. Key Product Acquisitions in the Agrochemical Industry - 2009 to present
Acquirer FMC Tessenderlo Kerley Amvac Amvac Amvac Bayer CropScience Bayer CropScience Cheminova FMC Gowan MAI Nippon Soda Nissan Chemical Plant Health Care Year 2009 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 Product Acquired Fungicide benalaxyl from Isagro DuPont's linuron business The cotton defoliant Def (tribufos) from Bayer Ethoprophos (Mocap) and fenamiphos (Nemacur) from Bayer Global product rights to the insecticide tebupirimifos from Bayer CropScience Biofungicide Shemer from AgroGreen Varroa mite (varroa destructor) control product from Exosect Rogor (dimethoate) business from Isagro Herbicide fluthiacet-methyl Product rights for the insecticide / fungicide M-Pede and the herbicide Scythe from Dow AgroSciences Plant growth regulator Talent (Carvone) from Formuchem

Tebufenozide from Dow Thifluzamide from Dow Intellectual property rights to Myconate from Bayer CropScience

United Phosphorus Amvac FMC Insecticides India MAI Otsuka AgriTechno Sumitomo Chemical Crystal Crop Protection Indofil Otsuka AgriTechno Tessenderlo Kerley Belchim

2010 2011 2011 2011 2011 2011 2011 2012 2012 2012 2012 2013

Global non-mixture mancozeb assets from DuPont Remaining global rights to the cotton defoliant tribufos from Bayer Fungicides Rovral (iprodione) and Sportak (prochloraz) from Bayer Monocil (monocrotophos) from Nocil DuPonts global non-mixture diuron business Rice herbicide benfuresate from Bayer Ethaboxam fungicide business from LG Life Sciences Insecticide Luphos-36 (monocrotophos) from Cheminova India Dow's European Dithane (mancozeb) business Rice herbicide benzofenap from Bayer Crop protection assets of carbaryl from Bayer Rights and assets related to valifenalate from ISEM

Industry Overview Sales Growth of the Leading Agrochemical Companies - 2012 The following table details the ranking of the leading agrochemical companies based on their sales of conventional agrochemical products, excluding seed and trait revenues, together with their sales growth in 2012. Agrochemical Company Sales (excluding seed & trait revenues)
Sales ($m.) Syngenta Bayer CropScience BASF Dow AgroSciences Monsanto DuPont MAI Nufarm Sumitomo Chemical FMC Arysta UPL Cheminova ISK Kumiai Mitsui Chemical Nippon Soda Nihon Nohyaku Sipcam Nissan 2012 10,785 9,539 6,014 5,022 3,994 3,173 2,649 2,201 1,905 1,764 1,527 1,448 1,027 541 481 478 477 471 459 444 2011 10,162 8,950 5,793 4,581 3,472 2,905 2,503 2,111 1,723 1,465 1,463 1,400 999 498 458 460 448 449 455 424 % Change 2012/2011 +6.1 +6.6 +3.8 +9.6 +15.0 +9.2 +5.8 +4.3 +10.6 +20.4 +4.4 +3.4 +2.8 +8.6 +5.0 +3.9 +6.5 +4.9 +0.9 +4.7

Since 2008 Syngenta has been the leading company in the agrochemical industry, with the company maintaining this position each year to date. In terms of US dollar sales all of the above companies reported sales increases in 2012 with the highest rise in sales within this group of companies achieved by FMC, Monsanto, Sumitomo Chemical, Dow, DuPont and ISK.

Industry Overview

Leading Companies Ranked on Five Years Sales Growth

The following table ranks the leading twenty companies on the basis of their agrochemical sales growth (excluding any contribution from agricultural biotechnology) over the last five years. Leading Companies Agrochemical Sales Growth 2007/2012
Company 2012 FMC UPL Kumiai Nissan Nihon Nohyaku Sumitomo Chemical Nippon Soda Syngenta Arysta Dow AgroSciences Cheminova BASF MAI DuPont ISK Mitsui Chemical Sipcam Bayer CropScience Nufarm Monsanto 1,764 1,448 481 444 471 1,905 477 10,785 1,527 5,022 1,027 6,014 2,649 3,173 541 478 459 9,539 2,201 3,994 Sales ($m.) 2007 890 762 294 273 295 1,248 316 7,285 1,036 3,414 721 4291 1895 2,337 403 357 356 7,447 1,819 3,753 % p.a. Sales Growth 2007/2012 +14.7 +13.7 +10.3 +10.2 +9.8 +8.8 +8.6 +8.2 +8.1 +8.0 +7.3 +7.0 +6.9 +6.3 +6.1 +6.0 +5.2 +5.1 +3.9 +1.3

Within the above group of companies, the fastest growing on the basis of sales growth over the last five-year period are FMC, United Phosphorus (UPL), Kumiai, Nissan, Nihon Nohyaku, Sumitomo Chemical, Nippon Soda, Syngenta, Arysta and Dow. All of these companies have achieved a compound annual growth rate (CAGR) in excess of 8% in the last five years. Clearly not all of this sales growth has come from organic growth, particularly as a number of these companies, notably UPL, Mitsui Chemical, Nufarm, Cheminova and MAI, have been involved in a significant level of M&A activity. In addition a number of companies will have benefited from currency exchange effects.

Industry Overview

Leading Crop Protection and Seed & Trait Companies

As discussed previously, the introduction of GM crops modified to possess herbicide tolerance (HT) and insect resistance (IR) has had a significant impact on the makeup of the crop protection sector. Several agrochemical companies have established sizeable operations based on this new technology. The following table ranks the leading agrochemical companies on the basis of their overall sales in crop protection and seeds & traits. Leading Crop Protection and Seed &Trait Companies in 2012
Sales ($m.) Company Agrochemical Syngenta Monsanto Bayer CropScience DuPont Dow AgroSciences BASF MAI Nufarm Sumitomo Chemical FMC Arysta UPL Cheminova ISK Kumiai Mitsui Chemical Nippon Soda Nihon Nohyaku Sipcam Nissan 10,785 3,994 9,539 3,173 5,022 6,014 2,649 2,201 1,905 1,764 1,527 1,448 1,027 541 481 478 477 471 459 444 Seeds & Traits 3,237 10,010 1,237 7,253 1,360 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total 14,022 14,004 10,776 10,426 6,382 6,014 2,649 2,201 1,905 1,764 1,527 1,448 1,027 541 481 478 477 471 459 444 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Rank

In addition to their involvement in agrochemicals, five of the leading companies have a direct presence in the seeds and trait sector, with the most significant players being Syngenta, Monsanto and DuPont. As well as the seed and trait operations listed above, BASF has a sizeable stake in the plant biotechnology sector through BASF Plant Science, which is predominantly involved in trait development.

Industry Overview

Product Sector Analysis

During 2012, the market for conventional crop protection products was divided by sector as shown below. Conventional Crop Protection Market 2012
Others 2.8% Fungicides 26.2% Herbicides 44.2%

Insecticides 26.8%

Total = $47,360 million

In addition to the above, a further $18,495 million is attributable to the sale of seed of crops genetically manipulated to express input traits, herbicide tolerance or insect resistance, the uptake of which has a direct impact on the market for conventional agrochemical products. The result of the introduction and acceptance of these crops on the market for conventional crop protection products can clearly be seen in the graph below. Crop Protection Product Sector Performance Since 1990
$m 22000 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0

Herbicides

Insecticides GM seed
Fungicide Others

In 2012, the value of the herbicides sector rose (+6.4%) benefitting from improved glyphosate pricing and volume growth in developing markets, while sales of both insecticides and fungicides recorded improved sales, by 7.5% and 5.2% respectively, driven by new product acceptance and growth in both developed and developing markets. Sales of agrochemicals used in non-crop situations rose by 1.3% to $6,372 million aided by more stable glyphosate prices in non-crop situations and improved economies in developed markets. The GM seed market rose by 17.9% to $18,495 million, driven by value enhancement due to the increased adoption of stacked trait varieties as well as increased uptake in Latin America and Asia.

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Industry Overview Growth of the Global Crop Protection Market by Sector

Herbicides Insecticides Fungicides 2012/2011 (%) 2012/2007 (% p.a.) 2012/2002 (% p.a.) +6.4 +5.4 +5.3 +7.5 +9.6 +7.1 +5.2 +8.9 +8.6 Others +5.9 +2.7 +4.2 Total CCP +6.4 +7.2 +6.5 GM Seed +17.9 +21.2 +19.4

Note: CCP = Conventional Crop Protection

Over the last five and ten years, market growth has been led by the fungicides sector, closely followed by insecticides. Generally the key factors affecting the performance of the fungicide sector are weather related, affecting disease pressure and hence product demand. During 2012 the cereal area in Europe increased, with the fungicide sector benefitting from an early end to the winter, but subsequently held back by a wet summer in northern Europe and dryness in the South and East. Sustained disease pressure resulted in an improved soybean fungicide market in Brazil although Argentina suffered a decline. Despite improving maize prices drought, in the US central corn belt held back the market for fungicides on maize and soybeans. During 2012, the greatest market improvement was recorded by insecticide sales, which rose by 7.5% to stand at $12,670 million, equivalent to 26.8% of the global crop protection market. Growth was recorded across most major crop sectors, but particularly on maize and sugarcane. The cotton sector recorded a decline, affected by lower crop prices, falling planted areas in many markets and the further uptake of insect resistant seeds. The insecticide market also benefitted from significant growth for recent introductions, most notably chlorantraniliprole and spirotetramat, but also flubendiamide and metaflumizone. During 2012, fungicide sales rose by 5.2% to $12,420 million, with positive performances across most crops except cotton, potato, vine and pome fruit. At the product level, the sector continues to benefit from growth of the seed treatment sector, whilst resistance issues continue to benefit products offering new modes of action. In 2012 further growth for the new phenyl pyrazole succinate dehydrogenase inhibiting products drove this strong performance, with further introductions from this class likely to result in further expansion of the fungicide sector in the immediate future. In 2012 the market for herbicides continued to recover from a dip in 2009 and 2010, with sales rising by 6.4% to $20,950 million, equating to a 44.2% market share. A significant contribution to this was improvement in glyphosate markets. All major crop sectors recorded an increase in herbicide sales, led by maize, soybean, cereals and rice in dollar terms, with glyphosate resistant weeds resulting in an improvement for selective herbicides in the USA. Over the next five years it is expected that fungicides will continue to lead market growth, the products being key to delivering the crop yield and quality improvement that the market is demanding. In the herbicide sector a more stable pricing position in the glyphosate market is expected to result in a steady market improvement overall, with volume growth led by increasing usage in developing markets. Lesser growth is anticipated in the insecticide sector due to a further negative impact from GM seeds and less significant growth than for fungicides and herbicides in developing markets.

Industry Overview

GM Crops
The following table outlines the historical development of GM crops areas over the last ten years. Significantly more detail regarding the GM sector and the seeds industry as a whole, including the companies, is available in the Phillips McDougall Seed Service.

GM Crop Areas 2002 2012

Acres million Herbicide Tolerant LL Canola LL Maize LL Cotton LL Soybean RR Canola RR Cotton RR Maize RR Soybean RR Sugarbeet Other HT Crops HT Total 2.4 1.5 0.0 0.0 4.9 5.3 5.9 89.1 0.0 0.4 109.5 2.7 1.4 0.0 0.0 6.2 4.7 7.2 98.1 0.0 0.3 120.6 4.1 1.5 0.0 0.0 6.3 3.5 8.5 108.9 0.0 0.2 133.0 4.9 0.5 0.3 0.0 6.8 2.9 11.3 119.1 0.0 0.0 145.8 6.0 0.5 0.4 0.0 5.6 3.6 12.4 133.9 0.0 0.0 162.3 5.8 0.6 0.3 0.0 7.4 2.7 17.4 133.7 0.0 0.0 167.9 7.5 0.5 0.3 0.0 7.8 2.2 16.7 147.5 0.545 1.0 184.0 7.1 0.5 0.1 0.4 8.3 1.6 15.6 160.2 0.8 0.9 195.5 7.7 0.5 0.1 0.6 9.2 3.1 17 172 1.1 1.0 212.3 8.7 0.5 0.4 0.8 9.6 4.0 16.4 183.1 1.1 0.5 225.1 10.8 0.5 0.7 1.0 10.4 1.4 15.5 191.6 1.2 1.0 234.1 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Insect Resistant Crops B.t. Cotton B.t. Maize CRW Maize B.t Rice IR Total Stacked Gene Crops Stacked Cotton Stacked Maize Stacked soybean Stack Total Total 4.9 6.2 0.0 11.1 143.9 5.5 8.9 0.0 14.4 162.0 7.0 12.7 0.0 19.7 191.1 8.7 19.2 0.0 27.9 212.2 9.2 27.4 0.0 36.6 239.0 7.0 48.6 0.0 55.6 268.6 6.3 57.5 0.0 63.8 296.4 6.4 63.4 0.0 69.8 311.6 8.1 67.0 0.0 75.1 343.1 10.8 78.9 0.0 89.7 375.5 13.4 96.3 0.0 109.7 407.6 5.1 18.2 0.0 0.0 23.3 5.5 21.1 0.4 0.0 27.0 8.7 28.6 1.1 0.0 38.4 11.5 26.1 0.9 0.0 38.5 16.8 22.1 1.2 0.0 40.1 23.2 21.6 0.4 0.0 45.1 27.2 21.4 0.0 0.0 48.6 31.0 15.3 0.0 0.0 46.3 43.0 12.7 0.0 0.0 55.7 44.4 16.3 0.0 0.0 60.7 44.0 19.8 0.0 0.0 63.8

Note: LL=Liberty Link; RR= Roundup Ready; CRW=Corn rootworm resistant

In 2012 the overall planted area of herbicide tolerant and insect resistant crops increased by 8.5% to reach 407.6 million acres (164.9 million hectares). As a result of this increase in area, the overall value of the agricultural biotechnology sector, based on the sale of seed of Genetically Manipulated HT and IR crop varieties, increased by 17.9% to reach $18,495 m. in 2012. The share of the total GM cultivated area planted with stacked gene varieties of cotton and maize in 2012 was 26.9%, while herbicide tolerant trait varieties of canola, soybean, sugarbeet, maize and cotton accounted for 57.4% with the remaining 15.7% share attributable to insect resistant varieties of cotton and maize.

Industry Overview Value of GM Seed Market by Crop 2012

Canola 3.9% Others 0.4%

Cotton 9.5%

Soybeans 30.8% Maize 55.4%

Total = $18,495 million

Maize is the most important sector of the GM seed market ahead of soybean, reflecting both the value of the overall maize seed market and the continued trend towards cultivation of premium priced stacked gene varieties of maize in the USA. As a result of this market advance, the proportion of US maize planted with transgenic herbicide tolerant and insect resistant crop varieties in 2012 has reached around 92.1% of the total area. Overall, however, the highest level of market penetration by GM crop varieties has been with glyphosate tolerant soybean in Argentina where over 98% of the crop in 2012 was planted with these varieties. In Brazil, the share attributable to Roundup Ready soybeans has been steadily increasing since their first adoption in 2004/5, and during 2012 the overall proportion of soybean planted with Roundup Ready varieties reached 80.3% of the total soybean area. The following chart outlines the planted area of transgenic crop varieties (excluding non-transgenic varieties such as Clearfield) split by geographic region in 2012. Area of GM Seed by Region 2012
Rest of Latin America 3.1% Argentina 14.2% Asia 11.5% Rest 1.5%

USA 43.8%

Brazil 19.6% Canada 6.3%

Total Planted Area = 407.6 million acres

At the country level, 43.8% of the global area planted with GM HT and IR crop varieties is in the USA, with a further 36.9% in Latin America, 6.3% in Canada and 13.0% in the rest of the world, led by cotton in India and China. Over the last few years the relative share of the global GM crop planted area attributable to the USA has been slowly declining from an estimated 59.3% in 2005 to last years figure of 43.8%, mainly as a result increased adoption of GM crop technology outside the USA. In addition the range of crops utilising GM technology has increased recently from maize, soybean, canola and cotton to include sugarbeet and alfalfa with further GM crop species scheduled be commercialised over the next ten years.

Industry Overview GM Seed Market by Trait 2012

Herbicide Tolerant 41.3%

Stacked Gene 47.3%

Insect Resistant 11.4%

Total = $18,495 million

Over the next few years, the GM crop sector is also expected to continue to move increasingly toward multiple trait stacked gene varieties, with reduced refuge and refuge in the bag (RIB) products becoming dominant in the maize sector. Further multiple trait crop varieties are also expected to be developed over the next few years incorporating not only newly developed input traits but also output traits such as drought tolerance. In addition to stacked trait crops, new herbicide tolerant traits varieties, including 2,4-D and dicamba tolerance, are likely to be commercialised in the next few years. Roundup Ready alfalfa and sugarbeet has also been introduced and there is the prospect of the introduction of B.t rice in India and China within the next five-year period.

Market Forecast for Crop Protection Market to 2017 ($m)

Herbicides 2012 2017 Growth % pa 20,950 23,473 +2.3 Insecticides Fungicides 12,670 13,804 +1.7 12,420 14,378 +3.0 Others 1,320 1,441 +1.8 Conventional Market 47,360 53,096 +2.3 GM Seed 18,495 21,550 +3.1 TOTAL 65,855 74,646 +2.5

Conventional Market 2017F

Fungicides 27.1% Others 2.7% Herbicides 44.2%

GM Seed Market 2017F

Rape 3.7% Cotton 8.6% Others 1.3% Maize 58.5%

Insecticides 26.0%

Soybean 27.9%

Key Points

Total = $53,096 million

Total = $21,550 million

GM sector focussed on maize, soybean, cotton and canola RR sugarbeet and alfalfa recently introduced Market led by the Americas, but geographic exposure increasing Introduction of insect resistant soybean in Latin America Introduction of 2,4-D and dicamba tolerant traits in next few years Adoption of RIB and reduced refuge technology Stacked gene varieties driving grower acceptance and value increase

Industry Overview

Crop Sector Analysis

During 2012, the market for conventional crop protection products was divided by crop sector as shown below. Conventional Crop Protection Market Divided by Crop 2012
Fruit and Vegetables 24.2% Cereals 17.7%

Maize 11.9%
Sunflower 1.2% Sugarbeet 1.7% Sugarcane 2.9% Rape 3.7% Cotton 5.2% Others 8.7%

Soybean 12.6%

Rice 10.2%

Total = $47,360 million

The table below shows the crop sectors that recorded the greatest growth in 2012 against the previous year, as well as those that recorded the weakest performances. The table is led by growth in the value of cotton fungicides, sugarcane insecticides, followed by soybean and oilseed rape insecticides. Crop Sectors by Growth Performance 2012
Rank Crop Sector Sales 2011 ($m) Sales 2012 ($m) Growth 2012/2011 (%) +41.5 +29.2 +23.2 +22.6 +21.2 +20.6 +20.0 +18.9 +18.2 +17.8 -1.1 -2.8 -3.5 -3.7 -3.9 -4.0 -4.3 -4.7 -7.4 -9.1

Strongest Market Sectors 1 Rape 2 Sunflower 3 Rape 4 Rape 5 Maize 6 Soybean 7 Sunflower 8 Cereals 9 Maize 10 Pome fruit Weakest Market Sectors 1 Pome fruit 2 Potato 3 Potato 4 Cotton 5 Vine 6 Vine 7 Cotton 8 Pome fruit 9 Vine 10 Cotton

Insecticides Fungicides Fungicides GM Seed GM Seed Insecticides Insecticides Others Insecticides Others Insecticides Herbicides Fungicides Insecticides Herbicides Fungicides Others Fungicides Insecticides Fungicides

246 24 388 587 8,455 1,461 35 259 959 45 453 324 773 1,443 258 1,072 323 549 271 110

348 31 478 719 10,251 1,762 42 308 1,134 53 448 315 746 1,390 248 1,029 309 523 251 100

Industry Overview Major Crop Global Planted Areas

Wheat Planted Area 2012 (ha. m.) Growth 2012/2011 (%) Growth 2012/2007 (% p.a.) 215.9 -2.4 -0.2 Maize 174.4 +2.8 +1.8 Rice 158.2 -0.7 +0.4 Soybeans 108.5 +5.6 +3.6 Cotton 34.3 -3.9 +0.8 Rape 35.0 +4.7 +4.5

During 2012 crop planting benefitted from sustained crop commodity prices, aided by increased global demand for grain and oilseed crops. In the EU, the cereal planted area rose led by gains in wheat and barley but the overall area of oilseed crops declined. Grain production in the EU was however impacted by a wet summer in Northern Europe. In Latin America in the 2011/12 season the maize and soybean planted areas in Brazil increased aided by high commodity prices and while the maize area in Argentina was also up, the soybean panted area in the country fell back slightly. Crop production in the region was negatively impacted by very dry weather and drought in Brazil and Argentina. In the NAFTA region, the maize and to a lesser extent the soybean sector benefitted from higher planted areas and while panting progressed relatively smoothly, crop development was adversely affected by very dry and hot weather later in the season in the main corn belt. Against a background of lower prices, the cotton planted area in the USA declined. In Canada there was recovery after the flood affected previous year with a significant increase in the planted area of canola and wheat. In Asia improved weather conditions aided the Australian and Thailand markets, however a variable monsoon in India affected weed and pest pressure. Russian wheat sector was affected by a cold winter followed by a dry summer while China benefitted form more normal water availability. Forecast Value Growth by Crop Sector 2012 to 2017 (% p.a.)
Herbicides Insecticides Fungicides Cereals Maize Rice Soybean Rape Sunflower Cotton Sugarbeet Sugarcane Fruit and Veg. Other crops Total +1.2 +1.1 +2.7 +1.7 +3.4 +5.4 +0.7 +4.3 +5.6 +3.3 +3.0 +2.3 +2.9 +1.8 +1.6 -0.7 +2.0 +7.0 +0.6 +3.3 +4.9 +2.0 +3.2 +1.7 +2.2 +3.9 +3.0 +2.5 +2.0 +8.2 +3.4 +4.4 +11.4 +3.1 +5.1 +3.0 Others +1.5 +3.1 +2.3 +9.9 +1.8 +14.9 +0.1 0.0 +2.7 +2.6 +2.6 +1.8 Conventional Market +1.7 +1.5 +2.4 +1.3 +2.8 +5.7 +0.7 +4.2 +5.3 +2.7 +3.5 +2.3 GM Seed +4.2 +1.1 +1.8 +1.1 +0.5 Total +1.7 +3.3 +3.1 +1.2 +2.5 +5.7 +0.9 +3.8 +5.3 +2.7 +3.5 +2.5

+3.1

The main factors behind the forecasts for market performance are stronger crop prices driven by increasing demand in developing markets. The key factors taken into account are the impact of GM crop adoption, growth in developing markets due to economic and population growth as well as dietary change, expected movements in crop prices and legislation affecting agriculture.

Industry Overview

Non Crop Agrochemical Market

In addition to a market of $47,360 million for crop protection products, a further $6,372 million in sales of agrochemicals is made in non-crop markets. These market sectors are estimated to have recorded growth of 1.3% in 2012 in comparison with the previous year. The non-crop market is not subject to the same factors that affect agriculture and has grown at a rate of 3.5% p.a. over the last five years. The non-crop sector is driven more by economic development, product price and volume, with technical advance having less impact than in crop sectors, although newer chemistry has made inroads into the termiticides and turf sectors. During 2012 the non-crop market gained from a favorable economic environment in developing markets notably in Latin America and Asia. In addition to this, prices, particularly for glyphosate, were more stable. Turnover in Japan was enhanced on currency translation, whilst growth was driven by the advanced developing countries, Brazil, India, China and Russia. Non-Crop Agrochemical Market 2012 by Region
Middle East / Africa 5.2% Europe 14.9% NAFTA 33.1%

Asia 39.2%

Latin America 7.6%

Total = $6,372 million

Non-Crop Agrochemical Market 2012 by Sector

Others 1.9% Fungicides 26.6%

Herbicides 34.2%

Insecticides 37.3%

Total = $6,372 million

Industry Overview

Regional Market Analysis

The market for conventional crop protection products in 2012 was divided by region as shown below.
Middle East / Africa 3.7% NAFTA 19.5%

Europe 26.2% Latin America 24.2% Asia 26.4% Total = $47,360 million

In 2012 market conditions were again better than in the previous year as crop prices were sustained and better weather conditions in some regions that were affected in 2011, although other areas suffered adverse weather in 2012. Growth of the crop protection market was led by Latin America (+12.6%) with strong gains in Brazil, Uruguay and Argentina followed by NAFTA (+ 7.9%) with Canada recovering from 2011 flooding, and Mexico and Southern USA benefitting from better water availability, although the US Central corn-belt suffered severe drought. The Asian market rose by 4.8%, led by China, India, Indonesia and South East Asian countries. The Japanese market rose by almost 2%, continuing the recent trend of recovery. The 2011/12 Latin America market benefitted from significantly higher crop prices, although dry weather and economic factors in Argentina and Brazil held back overall growth. In Europe (+1.9%), the market gained from an early start to the season however growth was held back by a wet summer in Northern Europe, but dryness in the East and South. In Eastern Europe economic conditions were far more positive however a long cold winter followed by a hot dry summer held back crop production and agrochemical market development. Growth in Asia was led by India and China, although the market in India was affected by another variable monsoon season. Thailand was affected by product de-stocking prior to re-registration, whilst improved glyphosate prices benefitted the plantation crop sector. Good growth was also evident in the more developing markets in Indonesia and Vietnam. Regional Market Performance Since 1990
$m
14000 12000

Europe
NAFTA

10000
8000 6000 4000 2000 Latin America Asia

Africa / Middle East

0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Industry Overview Conventional Agrochemical Market Performance 2007 2012 2017F

Rank Country Sales 2007 ($m) 4141 6077 2712 1656 2659 1673 1063 801 827 952 836 789 729 371 158 367 375 593 467 380 33,390 Sales 2011 ($m) 7002 6700 3996 2306 2664 1927 1340 1262 1281 1193 1154 878 650 758 467 520 558 547 548 439 44,528 Sales 2012 ($m) 7956 7035 4067 2717 2651 1928 1623 1450 1350 1213 1129 838 783 782 614 580 564 546 519 440 47,360 Growth 2012/11 (%) 13.6 5.0 1.8 17.8 -0.5 0.1 21.1 14.9 5.4 1.7 -2.2 -4.6 20.5 3.2 31.5 11.5 1.1 -0.2 -5.3 0.2 6.4 Growth Forecast Growth 2012/07 2017 2017/12 (% p.a.) (2012 $m) (% p.a.) 14.0 3.0 8.4 10.4 -0.1 2.9 8.8 12.6 10.3 5.0 6.2 1.2 1.4 16.1 31.2 9.6 8.5 -1.6 2.1 3.0 7.2 8885 7400 4266 3420 2740 2022 1712 1640 1387 1290 1376 870 808 1125 800 650 695 568 629 553 53,096 2.2 1.0 1.0 4.7 0.7 1.0 1.1 2.5 0.5 1.2 4.0 0.8 0.6 7.5 5.4 2.3 4.3 0.8 3.9 4.7 2.3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brazil USA Japan China France Germany Canada Argentina Australia Italy India Spain UK Russia Ukraine Mexico Indonesia Korea Poland Thailand WORLD

During 2012, all of the top twenty crop protection country markets recorded growth in local currency terms. The most significant gains were in Ukraine, Argentina, Canada, the UK, Mexico, China, Brazil, India and Italy. Generally weaker performances were recorded by the more mature markets, notably Japan and Korea. In dollar terms results were less positive, with 5 of the top 20 countries recording crop protection market declines following currency translation. Global Market by Region and Product Sector 2012 ($m)
Herbicides Insecticides Fungicides Others Total CCP GM Seed NAFTA Latin America Europe Asia MEA Total 5107 4251 5801 5013 778 20950 2045 3820 1678 4450 677 12670 1748 3139 4529 2734 270 12420 338 257 418 281 26 1320 9238 11467 12426 12478 1751 47360 13051 4140 10 1054 240 18495 TOTAL 22289 15607 12436 13532 1991 65855

Industry Overview

NAFTA
Crop Protection 2012 ($m) Growth 2012/2011 (%) Forecast 2017 ($m) Forecast 2017/2012 (% p.a.) 9,238 +7.9 9,762 +1.1 Non-Crop 2,108 +0.3 2,280 +1.6 GM Seed 13,051 +12.6 14,585 +2.2

Crop Protection
$m 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Fungicides 18.9%

Others 3.7%

Insecticides 22.1%

Herbicides 55.3%

Canada $1623 m.

Key Crops

Market Share

Maize
Fruit & Vegetables

25.5%
20.5% 15.4% 12.6% 5.7%

USA $7035 m.

Cereals Soybean Cotton

Mexico $580 m.

Key Points

US maize and soybean areas rose; the cotton area declined. Canada recovered from the flooding that affected 2011 US maize production affected by drought in the Central corn belt GM share of key crop areas very high and reaching maturity Maize usage for ethanol decreased Crop commodity prices sustained at a high level Improvement in glyphosate prices Southern USA and Mexico benefit from better water availability

Industry Overview

Latin America
Crop Protection 2012 ($m) Growth 2012/2011 (%) Forecast 2017 ($m) Forecast 2017/2012 (% p.a.) 11,467 +12.6 13,003 +2.5 Non-Crop 487 -2.8 664 +6.4 GM Seed 4,140 +39.1 5,283 +5.0

Crop Protection
Others 2.2% Herbicides 37.1%

$m
12000 10000 8000

Fungicides 27.4%

6000 4000
2000 0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Insecticides 33.3%

Key Crops Colombia $377 m. Brazil $7956 m. Paraguay $250 m. Soybean Fruit & Vegetables Maize Sugarcane Cotton Cereals

Market Share 38.3% 15.4% 10.4% 9.7% 7.4% 4.6% 3.3%

Chile $210 m.

Rice Argentina $1450 m.

Key Points

High commodity prices prevailing during season. Brazilian Real weakened against US $. Dry weather affects crop production, notably sugarcane. Glyphosate prices low but improving. GM maize and soybean areas increased especially in Brazil. Maize and soybean area in Brazil and Argentina increased. High interest rates in Brazil and inflation in Argentina

Industry Overview

Asia
Crop Protection 2012 ($m) Growth 2012/2011 (%) Forecast 2017 ($m) Forecast 2017/2012 (% p.a.) 12,478 +4.8 14,228 +2.7 Non-Crop 2,498 +5.0 2,762 +2.0 GM Seed 1,054 +15.4 1,374 +5.4

Crop Protection
$m
14000

12000
10000

Fungicides 21.9%

Others 2.3%

Herbicides 40.2%

8000
6000 4000 2000 0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Insecticides 35.7%

South Korea $546 m. China $2717 m. Key Crops Rice Fruit & Vegetables Cereals Cotton Market Share 32.9% 30.0% 13.6% 5.0%

Japan $4067 m.
Thailand $440 m. India $1129 m. Australia $1350 m.

Key Points

Improved weather conditions in Australia. Increase in Chinese grain imports. Competitive agrochemical pricing affects China. Improved internal crop prices allow India farmers to use more advanced products. Variable monsoon season holds back market growth in India. Steady growth in the Japanese market. High palm oil price and improving glyphosate prices benefit the plantation crop sector

Industry Overview

Europe
Crop Protection 2012 ($m) Growth 2012/2011 (%) Forecast 2017 ($m) Forecast 2017/2012 (% p.a.) 12,426 +1.9 14,019 +2.4 Non-Crop 951 -5.0 1,064 +2.3 GM Seed 10 +11.1 10 0.0

Crop Protection

$m
14000

12000
10000

Fungicides 36.4%

Others 3.4%

Herbicides 46.7%

8000
6000 4000 2000 0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Insecticides 13.5%

Germany $1928 m.

Poland $519 m.

Key Crops Market Share Cereals 35.6% 11.9% 8.7% 8.5% 5.1% 4.7% 4.5%

UK $783 m. France $2651 m. Spain $838 m. Italy $1213 m. Ukraine $614 m.

Maize Vine Oilseed Rape Sugarbeet Potato Pome fruit Russia $782 m.

Key Points

Increase in cereal area, but decline for oilseed rape. High commodity prices during year. Cold winter and a dry summer affect Eastern Europe. Early start to spring in the EU, but: Wet summer and autumn in the north Dry summer in the south Improving economic environment in Eastern Europe. 2012 autumn planting held back in Northern Europe due to wet fields.

Industry Overview

Middle East & Africa

Crop Protection 2012 ($m) Growth 2012/2011 (%) Forecast 2017 ($m) Forecast 2017/2012 (% p.a.) 1,751 +4.2 2,084 +3.5 Non-Crop 328 +6.1 382 +3.3 GM Seed 240 +23.7 298 +4.4

Crop Protection
$m 2000 1800 1600 1400 1200 1000 800 600 400 200 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Fungicides 15.4%

Others 1.5%

Herbicides 44.4%

Insecticides 38.7%

Morocco $165 m.

Turkey $258 m.

Kazakhstan $143 m.

Key Crops
Fruit & Vegetables Cotton Cereals Maize

Market Share
27.1% 23.4% 17.9% 9.8%

Rice

6.0%

South Africa $204m.

Key Points

Political upheaval disrupts trade in North Africa. Growth driven by year round specialty crop production in North Africa. Growth in Namibia and Zambia driven by crop exports to Southern Africa. Strong increase in crop planting in South Africa Drought affects areas of both East and West Africa. Farmers from Zimbabwe and South Africa relocating in Zambia.

Industry Overview

WORLD
Crop Protection 2012 ($m) Growth 2012/2011 (%) Forecast 2017 ($m) Forecast 2017/2012 (% p.a.) 47,360 +6.4 53,096 +2.3 Non-Crop 6,372 +1.3 7,155 +2.3 GM Seed 18,495 +17.9 21,550 +3.1

Crop Protection
$m 50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Fungicides 26.2%

Others 2.8%

Herbicides 44.2%

Insecticides 26.8%

NAFTA: 19.5%

Europe: 26.2%

Asia: 26.4%

Latin America: 24.2%

Africa / Middle East: 3.7%

Key Crops Fruit & Vegetables Cereals Maize Soybean Rice Cotton

Market Share 24.4% 17.7% 11.3% 12.1% 10.5% 5.7%