Field of Possibilities

Leaders in the field of pesticides are preparing for the era of biology

Field of Possibilities: Leaders in the field of pesticides are preparing for the era of biology

Originally published by: THEMARKER

Recently, farmers have increased use of bio-pesticides. Large chemical companies, having identified a new and growing field with sales of $ 2 billion per year, are investing hundreds of millions of dollars in acquiring companies that specialize in the development of such substances. Which one will eventually become top leader in this field?

Increasing demand for the use of biological pesticides in agriculture is influenced by the parallel evolution of several trends in recent years. Among others, this is due to increased demand for natural and organic food and growing awareness of health and environmental damage possibly resulting from the use of chemical pesticides.Even leaps in biological research and its commercialization greatly contribute to the development of this field.

However, the revenues of the global biological pest control market today only reach $1.5-2 billion a year – compared to the market’s chemical pest control products with $40 billion a year turnover. In fact, the main operators in the field are the major agrochemical companies that also market chemical pesticides.Therefore, the main influence of transition to biological pest control on the industry’s future depends on operating companies’ ability to adopt new products and technologies – an ability that may drastically change the balance of forces in the field.

Major pesticide manufacturers are not themselves generally involved in biological pesticides development but acquire smaller companies in the field or sign distribution agreements with generally much smaller biological pest control companies.Large companies sign distribution agreements with smaller companies, invest in or purchase them and these develop the products for them.

Biological pest control or ‘green’ products are divided into two main families: products based on plant-extract materials and extract from live organisms such as various kinds of bacteria and germs.

The biological pest control market began its career at the beginning of the 20th century, partly as the result of studies in microbiology and ecology that led to identification of microorganisms – minute organisms that can be seen only with a microscope. The studies led tothe development of products intended for agricultural pest control, but their adoption was not widespread, since the chemical pesticides developed at that time were more efficient and cheaper to produce.

However, over the years, health and environmental damage that accompanies widespread use of chemical pesticides in agriculture came to light.It became clear that such agents endanger farmers and consumers, animals, land and the environment.Following these disclosures renewed interest in the development of eco-friendlybiological pesticides was seen.

Agricultural pesticides are manufactured and marketed primarily by multinational corporations and large pest control companies.The global pesticide market today is led by the world’s six largest companies:BASF,Bayer,Dow Chemical, DuPont, Syngenta and Monsanto.All these companies in recent years are investing in the field of biological pest control.

Meanwhile, biological pesticides do not replace but integrate with chemical pesticides, according to farmers’ concrete needs.For example, according to many countries’ regulatory restrictions, it is forbidden to spray fruit and vegetable with chemical pesticides six weeks before harvesting,  to prevent  toxic material remaining  in the food when it reaches the consumer.  However, use of biological pesticides up to near harvest-time is allowed, and growers have gone through these stages.

Ziv Tirosh, CEO of Stockton Group

Ziv Tirosh, CEO of Stockton Group

Ziv Tirosh, CEO of the Stockton Group, a green pesticide manufacturer of crop protection, points to LuxResearch Company datawhereby the green pesticide market is expected to double its revenue to $ 4.5 billion by 2023.In 2007-2012, green pesticide market sales grew by 27% per year. “Stockton and similar companies are faced with a huge potential market,” said Ziv Tirosh.

The Stockton Group develops and sells worldwide a green fungicide called Timorex Gold, based on tea tree oil extract. Stockton’s revenues in 2013 are estimated at $ 50 million, with a large part of its sales coming from chemical pesticides. The company’s profits are used to finance development of the field of biological pesticides, contributing about $ 10 million to its income. Stockton has an active R&D program with the Weizmann Institute and other academic institutions.

Photo: Daniel Vatan

Small companies that manufacture biological pesticides integrated with chemical pesticides are still at the start-up stage and need to raise funds.  Some of them are estimated to be of high value.For example, AgraQuest, Inc., a small company producing green pesticides, with annual sales of about $ 40 million, was sold in 2012 to Bayer for half a billion dollars.

Field of Giants

Six large companies operate in the multinational market, each with slightly different specialization.  The first is the Bayer Group, Germany’s largest pharmaceutical manufacturer and one Europe’s largest chemical companies. The company is traded on European stock exchanges, and manufactures products for pharmaceutical, agriculture and polymers markets.The company operates in a variety of areas and their common denominator, according to it, iscontribution to a healthy lifestyle.In the field of drugs, it is known to the public as the manufacturer of aspirin and Betaferon (for the treatment of MS).

In the agricultural area, Bayer is developing a variety of vegetable and pesticides, and also operates in the field of genetic engineering.  In 2013, the company’s sales reached 40.2 billion, euros, an increase of 1% compared to 2012.Its net profit for this year totaled 3.2 billion euros – an increase of 773 million euros.  In the field of pesticides, its sales totaled 8.8 billion euros in 2013 – an increase of 5.2% compared to 2012.  TheEBITDA(earnings before interest, tax depreciation and amortization) in this area was 2.2 billion euros – an increase of 6.5%. Bayer’s acquisition ofAgraQuest, Inc. was intended to place the purchasing company in the position of global leader in the biological pesticidestechnology development.

Another giant corporation from Germany working in the field isBASF,manufacturing a wide range of industrial, agricultural and building chemicals.The company’s sales of agricultural fertilizers and pesticides in 2013 reached a level of 13% of total sales, which amounted to 74 billion euros – an increase of 3% in 2012.Its net profit amounted to 7.2 billion euros – an increase of 8% compared to 2012.

Monsanto, another giant in the field, is a multinational agricultural biotechnology corporation in agricultural biotechnology, based in the United States.Most of Monsanto’s revenues stem from the sale of seeds, particularly genetically engineered seeds.In 2013, Monsanto’s revenue reached $ 14.9 billion, an increase of 10% compared to 2012. Its net profit was $ 2.5 billion – an increase of 21% in 2012.

Dow Chemicals Company, one of the largest chemical manufacturers in the world, headquartered in the State of Michigan, USA, is one of the big players in the market.Its sales in 2013 were $57.1 billion, an increase of 1% compared to 2012. Its profit was $ 8.4 billion.

DuPont Chemicals is another company operating in this area, the world’s second largest after BASF Company. DuPont cut its 2014 profit forecast, given the expected decline in profit from agricultural chemicals to $4.0 – $4.1 per share, compared with a previous forecast of $4.2 to $4.5 per share.

Syngenta, considered the largest agrochemical company in the world and the largest manufacturer of pesticides is another giant active in this market. Syngenta revenues in 2013 totaled $ 14.7 billion, of which $ 4.5 billion from sales of seeds, and the rest from various generic products. The company’s net profit totaled $ 1.6 billion – a decrease of 11% compared to 2012.

Pests are developing resistance to chemicals

Brett Wang, a research analyst at the American investment bank, Piper Jaffray, wrote in 2013 a comprehensive report on the global pesticide market, where he said: “The green pesticide market is gaining momentum, as farmers all over the world struggle with plant and pest resistance to chemicals Overtime they develop resistance to chemicals due to overuse.In addition, strict regulatory requirements due to the environmental impact of synthetic pesticides have been applied.

We believe that these factors will establish a long-term positive trend for use of green pesticide products. Currently, the industry is experiencing a wave of mergers and strategic investments in small companies by the six largest agrochemical companies in the world. Giants of the industry show mutual enthusiasm for this category, and are willing to pay high prices for innovative technology companies currently in their early stages”.

Investment companies pinpoint some small companies that might be targeted for acquisition by large companies.One of them, Marrone Bio Innovations Inc., (Trading Code:MBII) is a developer and manufacturer of biological substances for agricultural pest control.The company was founded in 2006 and went public on NASDAQ in 2013.  Revenues in 2013 amounted to $ 14.5 million, more than double its revenue in 2012.

Piper also explains that the American chemical giantFMC,whose generic agrochemical division sales are around a billion dollars a year, is expanding its hold on the biological pest controlcategory.

“Today there are only a small number of green pesticides  that actually work well and have global impact, “said Ziv Tirosh. “These materials have a bright future. In an industry dominated by a few large multinational companies, it is necessary that the big players promote the proven value of green pesticides.

“Green pesticides cannot join the agricultural mainstream without major companies leading the dissemination. Development and commercialization of such substances require high technical capabilities and an even greater investment in product and market development and market education. A factor promoting this trend is the transition to fresh and naturally healthy food.All this together can lead to the development and rapid growth of the green pesticide industry”.

Summit Agro becomes the Exclusive Partner of STK in the USA

Summit Agro will distribute STK Botanical Biopesticides and Innovative ‘Hybrids’ in the USA April 15,  (Petach Tikvah, Israel) – STK bio-ag technologies, the innovative Israeli leader in botanical sustainable crop protection, has partnered with Summit Agro U.S.A., which will become the exclusive distributor of STK products in the United States. Effective immediately, Summit Agro USA will assume the marketing and sales responsibility for STK products in the USA.  Currently registered STK products, include TIMOREX GOLD® and Timorex ACT®.  TIMOREX GOLD® is the world’s leading botanical-based biofungicide, used in nearly 40 countries and currently approved for use throughout the USA for a wide range of uses.  Timorex ACT®, is a new OMRI – listed biofungicide for organic farming and conventional agriculture.  Pending registration is REGEV®. REGEV® is the first ‘hybrid’ pre-mixed combination of a botanical-based biopesticide with a chemical pesticide. Comprised of Tee Tree Oil (TTO) and Difenoconazole, REGEV® is already used in approximately 15 countries and has proven activity on a wide range of horticultural and row crops. EPA registration is anticipated in the first quarter of 2020.   In addition to the STK products, Summit Agro will also assume the STK non-exclusive rights to sell AVIV® biological fungicide in the US. Already successfully launched in the US, AVIV® offers broad spectrum disease control in key fruit and vegetable crops. CEO Arye Tennebaum of STK declared, “I am delighted to announce this partnership with Summit Agro. They are a world-class organization, with a great team of highly knowledgeable and dedicated professionals to help fruit and vegetable growers with STK’s cutting edge technologies for plant health and yield growth.”   The President and CEO of Summit Agro USA, Bill Lewis, also commented, stating,” Summit Agro is very excited with this opportunity.  The addition of the STK brands to the existing strong Summit Agro brand family will allow Summit Agro to offer a wide range of disease control options.   We are confident that in coordination with our exclusive distribution partners, Helena Agri Enterprises and the Tenkoz Member Companies, we will be able to effectively deliver STK’s  innovative biological and ‘hybrid’ solutions to growers all across the USA. We know these are outstanding products and we’re very proud to have been selected to represent them in the USA.” About STK Founded in 1994, STK is a bio-ag technology company committed to sustainable crop protection through the use of innovative biological products. STK’s botanical-based solutions (BBS), a synergy of cutting-edge scientific research and technology, enhance the safety, yield and quality of multiple crops. STK’s botanical and hybrid solutions are easily integrated into conventional spraying programs, helping to advance the Integrated Pest Management approach to food production. About Summit Agro Summit Agro USA, located in Durham, NC is focused on working with our partners to identify, develop, and deliver innovative solutions that meet the needs of growers across the United States.  Summit Agro has a history of bringing innovative solutions to market and can manage the full process from initial development to sales. This integrated business approach enables us to provide reliable, high-quality products to US growers.  Whether the need is for insecticides, fungicides, or herbicides, Summit Agro has a full range of product offers to meet the needs of our customers.

Exclusive Distribution Agreement Announced For STK In Colombia

March 11, 2019 (Tel Aviv, Israel) – STK bio – ag technologies, the innovative Israel-based leader in bio-ag technologies and hybrid technologies for sustainable agriculture and aquaculture, and ADAMA , a global leader in crop protection products,  are announcing an exclusive agreement for the distribution of Timorex® Gold botanical-based bio-fungicide and STK REGEV® ‘Hybrid’ fungicide throughout Colombia. Under this exclusive agreement, ADAMA will sell the products throughout Colombia under STK’s trade name, Timorex® Gold and  STK REGEV®. Timorex® Gold is currently approved for use in Colombia for the following crops: Bananas, Rice, Ornamentals, Tomatoes, Avocados, Onions, Coffee, Corn, Tobacco, Potatoes, Passion fruit and Pitahaya. Colombia has also approved STK REGEV® on rice, with expected label extension on bananas, ornamentals, coffee and tomatoes. TIMOREX GOLD® is a highly effective and popular botanical-based bio-fungicide. Based on Tea Tree Oil, TIMOREX GOLD® is used by growers in nearly 40 countries throughout the Americas, Asia, Australia/New Zealand and Israel. TIMOREX GOLD® protects fruits and vegetables from a wide variety of diseases, substantially increases crop yields and quality, leaves no chemical residues, and makes TIMOREX GOLD® treated crops more competitive and agriculture more sustainable internationally. STK REGEV® is the world’s first ‘hybrid’ fungicide. It is used successfully in many countries and several regions of the world.  A ready to use mix, STK REGEV® is used exactly as other fungicides, but with the added benefits of reduced chemical residues and much better resistance management due to its highly complex formulation of Tea Tree Oil and Difenoconazole. This easy  to use fungicide serves as a ‘bridge,’ enabling farmers who have never used any biological product to try one, without having to mix, rotate or do anything differently, thereby expanding the use of biological products for sustainable agriculture. Commenting on the Agreement, STK CEO, Arye Tenenbaum declared, “We are very pleased to be partnering with such a great company as ADAMA, whose world-class team of experts will promote the use of these exceptionally innovative and highly-effective biological products to Colombian growers." ADAMA Andeans Countries CEO, Edgardo Iglesias commented, “TIMOREX GOLD® and STK REGEV® complement ADAMA’s portfolio in Colombia. With these highly-advanced technologies, we aim to continue providing valuable services and products to enable farmers to optimize yields and help them grow." STK Colombia Country Manager, Jose A. Estevez added, “I have great expectations for this strategic agreement to accelerate the STK market penetration and sales growth in Colombia.”


STK & Sipcam announce an exclusive Distribution Agreement for Timorex® Gold botanical-based biofungicide in Spain January 23, 2019 (Petach Tikvah, Israel) - STK bio – ag technologies, the innovative Israel-based leader in bio-ag technologies for sustainable agriculture, and Sipcam , a global leader in crop protection products,  are announcing an exclusive agreement for the distribution and market development  of Timorex® Gold bio fungicide throughout Spain. Under this exclusive agreement, Sipcam Iberia will market and sell the product throughout Spain under STK’s trade name, Timorex® Gold. Timorex® Gold is currently approved for use in Spain on cucumber and zucchini, with label extensions applied for grapes, tomatoes, eggplants, pumpkins and gherkins. Timorex® Gold is a highly- effective, eco-friendly, Maximum Residue Level exempted premium biofungicide, meeting the highest standards for sustainable agriculture. Timorex® Gold’s unique mode of action protects plants by rupturing fungus cells, increasing overall plant health and yields for a wide variety of fruits and vegetables. Timorex® Gold works to protect plants from Botrytis, Powdery Mildew, Black Sigatoka and many other fungal and bacterial diseases. While Timorex® Gold is currently used by growers in over 30 countries in various regions, Spain is the first country is Western Europe to approve its use. The plan is for Timorex® Gold to enter the rest of the Western Europe over the next few years. According to STK CEO Arye Tenenbaum, “The collaboration between STK bio – ag technologies & Sipcam Iberia is a testament to both companies’ commitment to sustainable agriculture and our mutual goal of providing innovative, effective and environmentally friendly solutions to growers. “  Sipcam CEO Pablo Montañés declared, “Sipcam has a rigorous process for identifying the most innovative and effective biological products and companies for distribution partnership.  We look forward to our collaboration with STK and rolling out Timorex® Gold with great success bringing a highly-effective new tool to hundreds of Spanish growers, completing the already interesting Sipcam portfolio in bioprotection.”