September 20, 2012

 

Bayer CropScience to invest EUR 7 billion in R&D, facilities
 

 

Bayer CropScience plans to invest a total of EUR 7 billion (US$9.08 billion) between 2011 and 2016 in Research and Development (R&D) and an expansion of production capacities and seed processing facilities.

 

As part of this programme, Bayer CropScience is committing funds of EUR 5 billion (US$6.49 billion) for its R&D operations to develop new solutions for the farmer in seeds, novel chemical and biological crop protection. These funds are intended to fortify Bayer CropScience's pipeline of integrated agricultural solutions; the company anticipates that products launched during this period will have a combined peak sales potential of at least EUR 4 billion (US$5.19 billion).

 

Over the period 2011-2016, the company has earmarked EUR 2 billion to build up further facilities for the production of crop protection products as well as seed breeding, production and processing facilities. These plans will see the company invest in advanced process technology; substantially increase its global asset footprint, while at the same time enhancing its global supply flexibility.


CEO Sandra Peterson emphasised that the company is well-positioned to propel farming's future by leveraging the opportunities ahead. "Bayer CropScience aims to lead the way in sustainable crop solutions, and we are heavily investing in R&D, as well as production capacities, to respond to global demand for differentiated crop solutions," Peterson said.


In August, Bayer CropScience completed its close to US$500 million acquisition of US biological pest control company AgraQuest, securing its foothold in the biologics market, which is expected to triple to almost US$4 billion by 2020.


Peterson noted the strong progress the company had made since it launched its new four pillar strategy. The four pillar strategy is based on: 1) Rejuvenating its core Crop Protection business; 2) Reinventing customer-centricity along the entire value chain; 3) Refocusing innovation, and 4) Extending the company's Seeds business.


"With our strong expertise in seeds, chemistry and biological solutions Bayer CropScience is uniquely positioned in the agricultural industry," said Dr C. David Nicholson, Bayer CropScience's Head of Research & Development. "Our goal is to develop integrated crop solutions that provide farmers with a full package of products and services for the entire growing cycle - from planting the seeds to helping their harvest arrive fresh and in perfect shape on the retail shelves."


To achieve this, Bayer CropScience has integrated its R&D operations across all its three divisions and disciplines. This enables the company to better leverage its full research and development capabilities - spanning weed, pest and disease management to stress-tolerance and yield enhancement - to focus on key crops.

 

"The seed and crop protection solutions we develop are geared towards helping growers address some of the most critical issues they face. We believe the products that are in our pipeline of new seed, small molecules and biological crop solutions hold significant promise in the market, and expect the peak sales potential for our products being launched from 2011 to 2016 to be at least EUR 4 billion (US$5.19 billion)," Peterson revealed.


Peterson also emphasised that the company's Seeds business - formerly referred to as BioScience - is set to continue its rapid pace of growth. "We expect Seeds to double to around 20% its contribution to the company's overall sales by 2016," she revealed. The unit recorded a 21% leap in sales in the first half of this year on the back of significant growth in broad acre crops.

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