Although agrochemical companies witnessed declining revenues in the past, the industry has bounced back over the past couple of years by consolidating their market share through strategic M&A, increasing their R&D spend, and including digital as a major component to boost their products. The rising market demand for crop protecting chemicals to prevent crop losses and increase the yield will greatly fuel the growth of the agrochemical industry. However, some key challenges including escalating material costs, longer product development cycles, farm subsidy reduction, and rising regulatory requirements continue to persist. To overcome these challenges, top agrochemical companies have begun performing some strategic maneuvers. Experts at Infiniti Research highlights these strategies and other critical approaches for companies in the agrochemical industry.
M&A for strategic advantage
M&A has helped some of the biggest names in the agrochemical industry gain major portfolio optimization. Apart from this, a major benefit of M&A is that it allows companies in the agrochemical industry to increase the acquirer companies’ geographical presence. This is especially true for geographical regions where the company previously didn’t have a good distributor network.
Innovation and R&D
Product registrations today go through an extensive registration and screening process. While M&A can be a great platform for companies to expanding their existing product lines and enhancing their global reach, creating and scaling external partnerships for innovation and R&D to develop and commercialize new products in the agrochemicals market.
Digital technologies to bolster product offerings
Today, companies in the agrochemical industry have transformed from being mere providers of farm inputs to complex providers of integrated products by using ‘digital’ as a major component. Acquiring or getting into partnerships with companies in the agrochemical industry with superior technology backup can help increase access to advanced technologies and incorporate them into business. Digital technologies can help companies in the agrochemical industry to launch digital platforms for data collection, visualization, modeling, and weed out major inefficiencies in operations.
Experts at Infiniti Research believe that creating differentiation through innovation, expanding geographical reach through M&A efforts, and capturing additional value by deepening farmer engagement will also likely be the key strategic themes going forward in the agrochemical industry. But the question remains around how companies in the agrochemical industry can tackle future disruptions and roadblocks that can potentially impact the current revenue streams and what changes in strategic positioning this might entail.