Breaking News: Bayer Looks to the Future

The newest, biggest pesticide supplier in the world is a reality, and that means Bayer Environmental Science is a name lawn care operators will get to know.
When Bayer finalized its acquisition of Aventis Crop Science in early June, some of the most exciting products available to lawn care professionals were combined under one name. But executives of the new organization are also focused on the new products they’ll be able to bring to the market in the future.

“The fact that a company gets bigger has no effect on the end user because size isn’t a benefit by itself,” commented Dan Carrothers, head – Green Industry Business USA. “But if the company can use that size to do more research and development, develop better technology and use that technology to develop solutions for specific problems that a lawn care professional has, then the end user is better off.”

Josh Weeks, head of the North America Professional Products Business Unit, echoed those sentiments. “Think about R&D this way: if a company is committed to spending a certain percent of its sales on R&D and it’s selling $100 worth of product,” he explained. “If that company is suddenly selling $300 worth of product, there’s going to be that much more money that can be focused on a particular development target.”

Weeks went on to explain that companies are rarely focused on exactly the same new product developments, so Bayer Environmental Science must now evaluate all of the research projects already underway in both organizations and decide which ones hold the most promise for the future. Those efforts that make the cut will then benefit from increased resources, and Carrothers is confident that new solutions will be steadily coming to market. “As we look out from 2003 to 2007, we’re bringing out a variety of new herbicides, insecticides and fungicides almost every year,”he noted. “That means the customer will have more options and more potential solutions for a broader variety of insects, weeds and diseases than ever before.”

In the meantime, Bayer Environmental Science and the former Aventis business will operate “in parallel,” which Weeks termed “business as usual.” That means all of the programs offered by both Bayer and Aventis will remain in place through 2002 while the companies complete their integration efforts.

LOOK TO THE FUTURE. Consolidating pesticide suppliers isn’t a new trend by any means, but there’s some question how much more consolidation the industry will see as the number of manufacturers dwindles. “There is a law of diminishing returns that applies here in terms of how much more of this can transpire with the oversight of the Federal Trade Commission,” noted Weeks, referring to the governing body that must approve mergers and acquisitions to ensure that consumers benefit from sufficient competition.

To complete this deal, Bayer Environmental Science  must sell fipronil, a new insecticide Aventis introduced last year to control fire ants and chinch bugs. However, Bayer will have the opportunity to license back fipronil for use in the turf and ornamental and pest control markets. Numerous suitors have been rumored to be interested in purchasing the chemistry, including BASF and Dow AgroSciences.

Another benefit of these continued mergers and acquisitions is that specialty markets, such as turf and ornamental, continue getting more attention. “The crop markets have been flat or soft where the turf and ornamental market has been very solid, and people have begun to take note of that,” explained Weeks. “The reality is that we will always be a fraction of the crop market, but companies like Bayer Environmental Science are focused on the speciality markets.

“If you look at the way we are structured, Bayer Environmental Science is a separate and distinct business group within Bayer Crop Science. That means we have the ability to direct our research efforts in the areas we think hold the most promise. We’re not just a crop company dabbling in turf and ornamental or hoping to get lucky with a crop product that also controls weeds. We are a company focused on creating solutions for the turf and ornamental industry.”
Larger companies are also well positioned to deal with the increased regulations being enacted. “Clearly, there’s going to be more scrutiny on what is developed, and that’s why our job is to deliver effective solutions with minimal environmental impact,” asserted Carrothers. – Bob West

The author is Editor of Lawn & Landscape magazine and can be reached at bwest@lawnandlandscape.com.