BASF agricultural solutions, the agricultural chemicals unit of BASF, today provided details of the main strategic direction for the business for the next 10 years. The company unveiled the plans at the Capital Markets Day at BASF’s agricultural innovation center at Ghent, Belgium. BASF is targeting increased market share and growth of one percentage point above the agricultural market.
By 2030, the division aims for a 50% increase in sales. It will contribute significantly to BASF's target of €22 billion ($24.0 billion) in sales by 2025 with accelerated products that make a substantial sustainability contribution in the value chain, the company says. EBITDA before special items of BASF agricultural solutions is targeted to grow on average by 5% per year.
An increase in R&D budget to approximately €900 million in 2019 is supporting BASF’s innovation pipeline. The company announced earlier this year that by 2028, it will launch over 30 new products with peak sales potential of more than €6 billion. This includes eight active ingredients, as well as unique traits and high-performing seeds in hybrid wheat, soybean, canola, cotton, and vegetables. BASF is actively steering its offer for farmers and the agricultural industry toward sustainable solutions by integrating sustainability into all business and portfolio decisions. “Sustainability criteria are firmly embedded in our entire R&D process to identify and further develop those compounds that benefit both farmers and the environment,” said Peter Eckes, president/bioscience research at BASF.
“There is an increasing demand from farmers, regulators and consumers worldwide for BASF to contribute value to society—financially, socially and environmentally. With our innovation-driven strategy in agriculture, we are stepping up to this challenge by focusing on our customers’ and societal needs. We believe in finding the right balance for success—for farmers, for agriculture and for future generations,” said Saori Dubourg, member of the board at the Capital Markets Day.
“Farmers grow a combination of different crops with different growing cycles and cultivation requirements. That is why we are focusing on selected crop combinations, known as crop systems…In this way, we can best support our customers in maximizing yields, mitigating weather-related risks and disease pressure, as well as helping them to fulfill societal requirements,” said Vincent Gros, president of BASF’s agricultural solutions division.
Following the successful integration of the businesses and assets acquired from Bayer in less than one year, BASF can now serve farmers with a portfolio of agricultural solutions spanning seeds, traits, and crop protection to digital solutions. As one of the world’s leading agricultural solutions companies, BASF focuses its activities on four major strategic customer segments and their crop systems: soy, corn, and cotton in the Americas; wheat, canola, and sunflowers in North America and Europe; rice in Asia; and fruit and vegetables globally. In total, these crops represent approximately 70% of the global market, BASF says.
In the first half of 2019, the agricultural solutions division increased sales compared with the prior-year period by 38% to €4.4 billion. This was mainly driven by portfolio effects from the acquisition of businesses and assets from Bayer in August 2018. Earnings before interest and tax before special items of agricultural solutions rose by 23% to €861 million in the first half of 2019, mainly due to the contribution of the acquired businesses.