BASF’s strategy in agriculture aims for innovation-driven growth in specific markets

Oct. 1, 2019 | 5 Min read
- Compelling offer connects seeds, traits, crop protection and digital solutions to support farmer success worldwide - Aiming for profitable growth of one percentage point above global agricultural market and a 50% increase in sales by 2030 - Launch of over 30 new products by 2028 with peak sales potential of more than €6 billion - Increase sales of products that make a substantial contribution to sustainability

BASF Agricultural Solutions 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 Group’s target of €22 billion in sales by 2025 with Accelerator products that make a substantial sustainability contribution in the value chain. EBITDA before special items of BASF Agricultural Solutions is targeted to grow by on average 5% per year.
 
“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 of Executive Directors, at the Capital Markets Day at BASF’s Agricultural Innovation Center in Ghent, Belgium today.
 
BASF’s strategy in agriculture is based on innovations that enable farmers to feed a growing population and face challenges such as limited arable land, disease pressure and climate change. An increase in R&D budget to approximately €900 million in 2019 is supporting BASF’s innovation pipeline for agriculture. By 2028, BASF 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 towards 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.
 
Strengthening customer experience
 
“With our strategy, we are opening a new chapter that puts the farmer’s business at the center of everything we do,” said Vincent Gros, President of BASF’s Agricultural Solutions division. “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, where we have a winning offer. 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.”
 
Following the successful structural integration of the businesses and assets acquired from Bayer in less than one year, BASF can now serve farmers with a connected portfolio of agricultural solutions from 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 (oilseed rape) and sunflowers in North America and Europe; rice in Asia; fruit and vegetables globally. In total, these crops represent approximately 70% of the global market.
 
BASF will create new revenue streams from digital solutions in agriculture. Based on its pioneering digital expertise in agriculture as well as a strong commitment to partnerships, the company will provide digital solutions that add value to the way farmers use BASF products, the way they manage their farms, as well as the way they access and buy products or services. In addition, BASF will apply precision technologies and digitalization to seize future innovation opportunities in agriculture. This includes new, outcome-based business models.
 
Considerably increased sales and EBIT before special items in H1 2019
 
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. EBIT 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.

Categories Agribusiness

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