New products have fueled Bayer CropScience to the No. 1 position in worldwide ag chemical sales three years after the merger that created the firm, says its chairman of the board.

The firm expects at least seven projects in 2005, with two new active ingredients and five new products, and a promising pipeline of products beyond 2011.

Other promising aspects include additional cotton traits and long-term projects with pharmaceuticals derived from plants, officials said.

At its Monheim, Germany, headquarters Bayer CropScience’s chairman and board of management briefed international reporters on the company’s progress and prospects at its annual press conference.

Based on sales from products launched since 2000, Bayer CropScience became the world’s largest ag chemical company in 2004, according to Friedrich Berschauer, Bayer CropScience chairman of the board. Syngenta is No. 2 and Monsanto is No. 3.

Bayer CropScience had sales of more than 5.9 million euros in 2004, on the strength of the Latin America market. EBIT climbed 43.9 percent and EBITDA margin from 19 percent to 21 percent. Bayer CropScience has a EBITDA margin goal of 25 percent by 2006.

Despite a slow start in Europe and Latin America during the first quarter of 2005, the company has posted increased sales in North America, based on its fungicide products and the discovery of Asian Soybean Rust in the United States, Berschauer says.

Fungicide sales related to Asian soybean rust are expected to impact the company’s second quarter earnings. The company has plans to deliver fungicides to areas affected with Asian Soybean Rust, Berschauer says.

New products since 2000 and something Berschauer calls “an integrated approach,” have helped Bayer CropScience attain a 20 percent global market share. The strategy involves finding new uses for already-successful products. Tebuconazole, the active ingredient in Folicur, and the insecticide active ingredient imdacloprid.

The emergence of Asian Soybean Rust has “significantly expanded the scope of applications” for tebuconazole, which was introduced in 1990, even though the patent for Folicur has expired.

Imidacloprid is another example. One of three CNIs in the Bayer stable, imidacloprid is scheduled to go off patent between 2006 and 2008. Bayer, however, is making use of the compound in agricultural and non-agricultural arenas, “leveraging the augmented value.

“A good lifecycle management clearly can help to bring out the best of our products,” Berschauer says.

While older chemistry plays a role, Berschasuer points out that newer products will make up more than 20 percent of sales at Bayer CropScience by mid-term 2005.

“We have set ourselves the objective to achieve more than 1 billion euros in sales for our new active ingredients by the end of next year, including trifloxystrobin, Berschauser says.

In addition to five major products this year, two new active ingredients, spiromesifen and ethiprole will be introduced in seven products in 2005.

Spiromesifen is the second of the ketoenole compounds. Envidor is in this class of chemistry. Bayer also plans to market a range of mixtures and formulations. Nativo, which is based on trifloxystrin and tebuconazole, is an example. It was introduced in Brazil.

Sekator ODESI, a new liquid formulation of idosulfuron and amidosulfuron herbicide will also be released this year.

Seed treatment releases, Poncho Beta and Redigo are also planned this year. “Seeds are almost as valuable as gold,” says Bernward Garthoff, a member of Bayer CropScience’s board of management. The company recently acquired 100 percent of Gustafson. “We see value increasing in seed treatment.

Describing the chemistry triazole as a “rising star,” Garthoff said prothioconazole “adds a new dimension in disease control.” The product was released as Proline in Europe in 2004.

Berschauer and Garthoff say that many of the products being introduced have applications in the vegetable marekt. “We have globally used compounds of key importance in the vegetable market. This is a market that will become more and more important,” Berschauer says. The company has new releases planned for the vegetable market.

“For our company, specialty crops have always been at the forefront.”

Berschauer says the BioScience division is relatively new but holds promise. Bayer CropScience is investing 90 million euros per year into this developing business, which focuses on vegetable seeds, cotton, canola and rice.

The company has matched its InVigor hybrid seed business with conventional crop protection. “The same is true for our very successful FiberMax cotton business and our fast-growing rice operations,” Berschauser says.

Lykele van der Broek, who heads the BioScience division, says the company has plans to introduce more traits into its FiberMax cottonseed lines. “We’ve grown our cottonseed business based on performance of products,” he says, “and we will take the appropriate funding to introduce additional traits into cotton.” FiberMax cottonseed currently has more than 20 percent of the market in the U.S.

Bayer CropScience is also working to modify carbohydrates to create new starches. The company also is developing plants with high tolerance to severe temperatures and has discovered genes to improve the nutritional properties of canola oil.

Bayer CropScience and Cargill recently formed an alliance to produce specialty canola oil. The company expects the alliance to “accelerate canola varieties that produce high stability oil with improved nutritional composition.”

The company is also working with hybrid rice varieties to increase yield. This area is an “emerging” market.

On the plant made pharmaceutical front, Bayer CropScience is working to develop therapeutic proteins in plant systems. Van der Broek said the company is looking at “crops that are not part of the food chain.” He said the work is more than five years away from coming to fruition.

Garthoff says, in the long-term, biotech acceptance will become more important and its acceptance “will increase in the EU.”

“We are globally represented, so we have good reason to continue with this research,” Garthoff says. “Although we’re not optimistic for the markets in Europe right now … we are confident that consumers will see the value of it (biotech).”

Garthoff calls it a “temporary situation” with the EU and biotech and believes change in opinion about biotech in Europe could come in two or three years.

Already, Bayer CropScience has sponsored science forums to “intensify the dialogue,” says Garthoff, a member of the Europa Bio Board.