BASF expanding Brazilian fungicides

23 November 1999 16:47  [Source: ICIS news]

SÃO PAULO (CNI)--BASF will spend $4m (Euro3.8m) to expand its Brazilian fungicide operations for production of epoxiconazole to meet rising demand for use on coffee crops in South America, company sources told CNI Tuesday.

Headquartered in Germany, BASF ranks third in the Brazilian fungicide market with 8% behind Bayer and Novartis but hopes to double this share over the next three years.

At present, BASF imports all epoxiconazole, marketed as Opus and Duett in South America, from Germany.

"From March 2000, the Brazilian operation will be the only one outside Germany that produces fungicides for coffee crops," revealed Eduardo Leduc, marketing manager for BASF's local agribusiness arm.

Epoxiconazole, which BASF created three years ago, will be formulated and produced at the company's herbicide and insecticide plant in Guaratingueta of São Paulo state.

Leduc revealed that the output would initially feed the domestic and Mercosur markets, but added that the plant would have the capacity to meet global demand.

"Within three years, the intention is to dedicate 60% of production to the Brazilian market and the rest for export," Ledoc explained.

BASF's decision to go ahead with the project is based on the rapid expansion of the market for coffee fungicide and its potential for growth. The company estimates that this market grew 20% this year to $100m and believes Brazilian farmers will continue to buy as pressure to increase land productivity rises.

The devaluation of the Brazilian Real, and the resultant jump in import prices, was not a factor in BASF's decision to set up production in Brazil, according to Leduc. He pointed out that the project was already under way when the Real fell in January.

"Logistics was the fundamental motivation behind the project, not import substitution. With a local plant, we will be able to attend our clients quicker and more efficiently," explained Leduc.

By: Alastair Stewart
+1 713 525 2653

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